HC marketing blok 2 week 6
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Transcript HC marketing blok 2 week 6
Distribute or die: Offline and online
distribution strategy
Hoorcollege marketing blok 2 week 7
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Learning goals
By the end of the reading and colleges you should
understand:
How place fits into the overall marketing mix
The types of distribution channels available
What is channel conflict and some solutions for this issue
How distribution relates to interactive media products
Some of the main trends in distribution
Some ways of choosing distribution channels
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Agenda
Introduction: what is place?
Types of distribution channels
Channel conflict
Trends in distribution
Interactive media and distribution
10 tips for choosing and managing distribution
channels
Summary
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What is place?
Place in the 4Ps of marketing refers to all aspects of getting
the product/service/idea from the producer to the end
consumer
It is also called distribution or distribution channels
It is an important, but often neglected element of the marketing
mix
When done well it can help ensure success
When things go wrong it can lead to big problems
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Why is place part of the marketing
mix?
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Place: the golden rule
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What sort of things can go wrong?
Choosing the wrong place
A place where the customer isn’t
A place that is not consistent with positioning / marketing mix
Fighting between places
Not enough product in the right place
Imagine this happening during a promotional activity
Too much product in the right or wrong place
Not developing distribution channels to keep up with
customers
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Types of distribution channels
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Distribution channels
These are the routes that companies use to get their
product to the customer
Channels are normally split by:
Customer type
Business to consumer channels (B2C)
Business to business channels (B2B)
Distribution type
Direct channels
Indirect channels
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Indirect channels cost money
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Why do organizations do indirect
business?
Because distributors do a lot of work including:
Distribution
Financing
Risk taking
Esp. inventories
Providing information
Marketing intelligence to producer
Promotion
Customer management
Acquisition
Matching needs to products
Negotiation of contracts / prices
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Examples of direct channels
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Examples of indirect channels
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Channel conflict
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What is channel conflict?
Most distribution channels are made up of separate
companies
Often these companies are competitors
One of the main problems is that they often conflict
This uses time
And can drive the going price down
Two sorts of channel conflict:
Horizontal conflict
Vertical conflict
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Horizontal conflict
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Vertical conflict
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Managing channel conflict
The key is to manage your channels
Options include
Avoid large pricing differences between channels
Maintain regular contact
Develop channel specific line-ups
Channel specific support
Logistics
Promotions
Service
Financing
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Interactive media and distribution
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Interactive media is a distribution
channel
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Tangible products
The web has opened up
many new distribution
channels for tangible
products
Both direct and indirect
channels
Consumers are moving to
these channels
Increased risk of channel
conflict
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Services
Interactive media has
opened new channels for
services and is especially
popular with financial
services
ATMs (pinautomaats) online
& mobile banking are
revolutionizing banks
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Software
Online distribution of
software is an obvious step
A number of different
models
Direct sales
Shareware
Free software
The “free” model has been
very successful for Adobe
Risk of channel conflict very
high in some areas
Music / film
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Interactive media products
Interactive media also
provides a channel for
interactive media products
E.g. Google search (site
search, desktop, mobile),
adwords
This is a new trend, but it
seems to have potential
Part of Google’s success is
its innovative approach to
“distribution” of its products
The phenomenon of
“widgets” and “embedding”
make this a more interesting
option in future
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Trends in distribution
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Shopping as a lifestyle and
experience
Shopping is a leisure activity
84% of UK adults enjoy
shopping
Shopping is social
Shopping is used by some
as therapy
Shopping can be an
enjoyable experience
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Many retailers and shopping
centres are trying to tie into
this trend
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Move online
More people shopping
online (672m worldwide)*
Europeans purchase more
frequently online than North
Americans
Security issues being
resolved
Familiarity helps
* Source: AC Nielson
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Growth in retailer strength
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Large retailers have more
power than ever before
This leads to better prices
for consumers
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But killing smaller
specialists
May reduce choice longterm
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10 tips for choosing and managing
distribution channels
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10 tips for choosing and managing
distribution channels
1. Be where the customer is
Ready to buy
Open to influence
2. Ensure the channel fits
positioning
3. Visibility is everything
Ensure you have shelf-space
4. Treat your distribution as
partners
Look after them and they will
look after you
6. Follow the customer
7. Develop new channels
8. Different channels require /
expect different profit margins
These might not fit your business
model
9. No distribution channel “has to
have you”
10. Never underestimate how
difficult it is to enter new
channels
5. Minimize channel conflict
through strong management
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Summary
Distribution is important though sometimes
neglected
The “place” should reflect positioning (and support
the rest of the marketing mix)
Distribution needs to be strongly managed to avoid
channel conflict
Place includes interactive media, in the case of
interactive media products there are many new
opportunities to distribute products
Trends in online and offline distribution are leading
to many opportunities and threats of channel conflict
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