Transcript Chapter Four

Chapter
Eleven
Place
Chapter Eleven
Learning Objectives
• To classify online distribution activities and
learn how they are influenced by the Internet
environment
• To identify online place issues that concern
Internet marketers
• To characterize successful online consumer
channel strategies and understand reasons
for their success
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11–2
Place Fundamentals
Figure 11-1: Marketing Channels
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11–3
Place Fundamentals (cont’d)
• Supply channels
• Deliver upstream value
– Provide direct and indirect products
• Traditional ways of doing business have
worked against emarketplaces
– Private emarkets are more widely accepted
– Horizontal and vertical exchanges
• Supply channels often led by powerful
manufacturers or retailers
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11–4
Place Fundamentals (cont’d)
• Eprocurement is saving money
• Large corporations dragging their suppliers
online
• Web-based supply systems also important
• More internet business expansions planned
• Online automated supply and resupply
systems expanding
• For more businesses, online supply channels
squeeze out costs
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11–5
Place Fundamentals (cont’d)
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Distribution channels
Deliver downstream value to end users
Digital direct distribution
Multichannel distribution
Channel agreements, structure
Types of intermediaries
Logistics/physical distribution
Storage, handling, delivery
Collaboration between producers, sellers,
carriers
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11–6
Place Issues
• Internet is changing many place traditions
• Some are traditional marketing in a new
channel environment
• Disintermediation
– Collapsing channels
– Goal: cost savings
– Some industries more threatened than others,
particularly travel agents
– Infomediaries
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11–7
Place Issues (cont’d)
• Some cyberbrands reintermediating
• Threat of cyber channel cannibalization
• Metamediaries - or are they portals?
– Unique communities
– With or without commercial involvement
– Affinity, instruction, time/event, aspirational
• Automatic replenishment - rebuys
• Multilevel marketing
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11–8
Consumer Channel Strategies
• Many online channel strategies are
evolutionary, not revolutionary
• What consumers want from online
storefronts
– Convenience, information, speed, privacy and
security, service, simplicity, convergence
• Etailing - the third significant
transformation of the retail industry
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11–9
Consumer Channel Strategies
(cont’d)
• Etailer decisions
– Service level
– Returns
– Products and
assortment
– Trust
– Inventory turns
– Aftermarket service
– Facilitation
– Prices
• Shopping basket abandonment
• Content sites, P2P and auctions
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11–10
Consumer Channel Strategies
• Focus: Digital Products
• Music Distribution
• Old Model Artist > Label > Retail > Product
Bundle
• New Model ?
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11–11