CONTENTS

SUBMISSION

1.SUMMARY 2.MARKETING CHANNELS & VAL E NETWORK 3.THE IMPORTANCE OF CHANNELS

4.CHANNEL DEVELOPMENT 5.UNDERSTANDING CUSTOMER NEEDS 6.VALUE NETWORKSHOME

Most producers do not sell their goods directly to final users. Between producers and final users stands one or more marketing channels, a host of marketing intermediaries performing a variety of functions. Important functions: Information, Promotion, Ordering, Financing, risk taking, physical possession, payment and title.

Conflict in Marketing Channels results from: Goal incompatibility Poorly defined roles Perceptual differences Interdependent relationships

How do Companies Manage Conflict in Marketing Channels??? Strive for Super ordinate Goals Exchanging people among two or more channel levels Opting for Leader s support from different parts of the channel Encouraging Joint Membership in and between trade associations Employing Diplomacy Mediation or arbitration Pursuing legal recourse HOME

Meaning:Most producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of functions. A marketing channels includes one or more marketing intermediaries performing variety of functions: 1. Provides Value 2. Performs a function and 3. Expects an economic return

These intermediaries constitute a marketing channel (also called a trade channel or distribution channel). Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. Channel Marketing most often relates to the sale of products. However it is not limited to the distribution of physical goods. For example: oBank and Credit unions depend on a network of ATMs to offer their services. oFinancial Management and insurance organizations disseminate information through systems provided by other vendors.

There are basically three types of Intermediaries: Merchants: These type of intermediaries buy, take title to and resell the merchandise. Agents: These type of intermediaries search for customers and may negotiate on the producers behalf but they do not take title to the goods. Facilitators: These type of intermediaries only assist in the distribution process but neither takes title to the goods nor negotiates, purchase or sales.

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What is a Marketing Channel?Set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

The Importance of Channels Fill the gaps between the production and

consumption process. Reduces the amount of time and expenditure of the manufacturer. Promote the product through efficient display etc. Apprising manufacturers of customer requirements time to time. Add value to a company s product.

Why are Marketing Intermediaries Used?y The use of intermediaries results from their greater

efficiency in making goods available to target markets. y Offers the firm more than it can achieve on its own through the intermediaries:y Contacts, y Experience, y Specialization, y Scale of operation.

y Purpose: match supply from producers to demand

from consumers.

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Marketing channel strategies

PUSH STRATEGY

PU STRATEGY

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PUSH STRATEGY Manufacturer uses its sales force and trade

promotion money to induce intermediaries to carry,promote,and sell the product to the end users. It is appropriate where there is low brand loyalty in a category,brand choice is made in the store,product is the impulse item,and poduct benefits are well unserstood.

PULL STRATEGY Manufacturer using advertising and promotion to

persuade consumer to ask intermediaries for the product,thus inducing intermediaries to order it. It is appropriate where there is brand loyalty and when people perceive defferences between brands and when people choose the brand before they go to the store.

How a channels Reduces the time and expenditure of manufacturer

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Channel Development A new firm typically starts as a local operation selling in a limited market, using existing intermediaries. If the firm is successful, it might branch into new markets and use different channels in different markets. International markets pose distinct challenges. Customers shopping habits can vary by countries. International marketing involves coordinating the firms marketing activities in more than one nation. The international marketing strategy is effectively realized by choosing the suitable international marketing channel . The channel is the medium through which the firms global marketing strategy is among the customers scattered all around the globe.

Example: Tata Nano will be imported to Malaysia by Tata Industries in parts. It will be assembled in its two factories i.e in Shah Alam, Selangor and Pasir Gudang, Johor Bahru. There are four distribution centres in Peninsular Malaysia i.e. in Kuala Lumpur, Penang, Johor Bahru and Kuantan. All Tata Nano cars will be distributed through these distribution centres only. Order can be made vide these distribution centres or its web site

(B) The channel system evolves as a function of local opportunities and conditions. Lets look into how Agriculture Marketing channel works: Farmers producing agricultural produce are scattered in remote villages while consumers are in semi-urban and urban areas. This produce has to reach consumers for its final use and consumption. There are different agencies and functionaries through which this produce passes and reaches the consumer. Factors affecting channels: There are several channels of distribution depending upon type of produce or commodity. Each commodity group has slightly different channel. The factors are : Perishable nature of produce .e.g. fruits, vegetables, flowers, milk, meat, etc. Bulk and weightcotton, fodders are bulky but light in weight. Storage facilities. Weak or strong marketing agency. Distance between producer and consumer. Whether local market or distant market.

.Types of Market Channels: Some of the typical marketing channels for different product groups are given below: Channels of rice: Producermiller->consumer (village sale) Producermiller->retailerconsumer (local sale) Producerwholesaler->millerretailerconsumer Producermillercum-wholesaler-retailer-consumer Producervillage merchantmillerretailerconsumer Producergovt. procurementmillerretailerconsumer

Hybrid Channels Meaning: hybrid marketing channel network, a single firm may set up two or more marketing channels in order to reach multiple marketing segments. Todays successful companies are also multiplying the number of go-tomarket or hybrid channels in any one-market area . Companies that manage hybrid channels must make sure these channels work well together and match each target customers preferred ways of doing business. Customers expect channel integration, characterized by the following features: A)The ability to order a product online and pick it up at a convenient retail location B)The ability to return an online ordered product to a nearby store of the retailer. The right to receive discounts based on total online and off-line purchases

Lets consider banking Industry: For different customer from high to low in the level of value added and customization should be changed. In different range of products inclucding superannuation, telephone banking and internet trading. Superannuation is a special kind of services that required a lot of communication and information between bank's officer and customer Telephone banking it requires little interactions; hence little value is added form the channel, In internet banking where investors can easily seek for consultation from their stock broker a distance away. In changing environment customer becoming more informed about the product and technology has made an innovation in automatic field.HOME

y According to NUNES and CESPEDES:-

Habitual shoppers. High -value deal seekers Variety-loving shoppers High involvement shoppers

Habitual Customers

High value deal seekers

Variety loving shoppers

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y A Value network is the system of partnerships and

alliances that a firm creates to source, augment, and deliver its offerings. y A supply chain view of a firm sees markets as destination points and amounts to a linear view of the flow. The company should first think of the target market, and then design the supply chain backward from that point.

y This view has been called demand chain planning. y A value network includes a firm s suppliers, its suppliers suppliers, its immediate customers, and their end customers. y A company needs to orchestrate these parties to enable it to deliver superior value to the target market.

y Demand chain planning yields several insights: y The company can estimate whether more money is made upstream or downstream. y The company is more aware of disturbances anywhere in the supply chain that might cause costs, prices, or supplies to change suddenly

Companies can go online with their business partners to

carry on faster and more accurate communications, transactions, and payments to reduce costs, speed up information, and increase accuracy. Marketers have traditionally focused on the side of the value network that looks toward the customer. In the future, they will increasingly participate in, influence their companies upstream activities, and become network managers

y Managing this value network has required companies

to make increasing investments in information technology (IT) and software

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