Transcript Distribution Channel

Marketing Mix
on Internet
Rimantas Gatautis
Kaunas University of Technology
Internet marketing
Process
 IT
 Relations
 Exchange
 Both parties satisfaction

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Marketing mix
Combination of all the elements
that make up marketing
 Product
 Price
 Distribution
 Promotion
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Rayport, Jaworski 2001
Product
 Price
 Distribution
 Communication
 Community
 Branding

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Daniel, McDonald 2001
•Integration
•Interactivity
•Independence of location
•Individualization
•Intelligence
•Industry restructurization
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4S
scope
 site
 synergy
 system

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Product
A product is a bundle of benefits that
satisfies needs of organizations or
consumers.
– Includes tangible goods, services, ideas,
people and places.
– Products such as search engines are
unique to the Internet while others simply
use the Internet as a new distribution
channel.
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Product - value
 Process
 Expectations
 Customer
opinion
 Price level
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Creating cutomer value - “Value"
strategies
 Information

Subscription/personalization
 Trade
 Mix
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Price
Price is the sum of all values that
buyers exchange for the benefits
of a good or service.
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Price – price strategies
 Tangible
 Intangible
 Mixed
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Pricing strategies
Static strategies:

Penetration pricing

Market skiming pricing

Price leadership

Promotional pricing (HighLow)
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Pricing strategies
The Internet is taking us back to
an era of dynamic pricing—
varying prices for individual
customers.
 Auctions
 Group buying
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Distribution

A distribution channel is a group of
interdependent firms that transfer
product and information from the
supplier to the consumer.
– Producers
– Intermediaries
– Buyers

Each channel member performs
some of the marketing functions.
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Distribution
The are three perspectives
through which to view
distribution channels:
· by types of intermediaries,
· by the functions that are
performed in the channel,
· by flow of product, information
and finance along the channel.
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Distribution
Traditional intermediaries:
 Wholesalers buy products from
the manufacturer and resell
them to retailers.
 Brokers facilitate transactions
between buyers and sellers.
 Agents may represent either the
buyer or seller
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New intermediaries
Infomediaries
 E-Malls
 Virtual communities
 Virtual value chain integrators

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Functions of a distribution channel
The Internet greatly facilitates
market deconstruction –
removing distribution channel
function from players that
normally perform them, and
reconstruction – reallocating
those functions to other
intermediaries in novel way.
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Functions of a distribution channel
Transactional functions refer to making contact with
buyers and using marketing communication
strategies to make them aware of product.
 Marketing communication
 Matching products to buyer’s needs
 Negotiating Price
 Process Transaction
Logistical functions include physical distribution.
 Physical distribution
 Aggregating Products
 Third –Party Logistic
Facilitating functions:
 Market research
 Financing of purchases
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Supply – Demand
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Systems perspective
Farmer 1
Food
supplier
Supply Chain
Farmer 2
Steel
supplier
Manufacturer or
Parts
supplier
Service Provider
Parts
supplier
Fabric
supplier
Distribution
Channel
Wholesaler
Retailer 1
Retailer 2
Wholesaler
Manufacturer or
Service Provider
Agent
Retailer 3
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Promotion
Internet advertising:

Web sites

Banners

E-mail

Search engines

Links

Discussion forums
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1) Off-line advertising
2) On-line advertising
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Banners pricing

CPM (cost per thousand)
CPC (cost per click)
 CPUC (cost per unique click)


CPA (cost per action)
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Promotion
 E-coupons
 Sampling
(shareware, demo
versions, trial versions)
 Contests
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Public relations
 Content
sponsorship
 Community building
 Online events
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