Channel Roles in a Dynamic Marketplace
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Transcript Channel Roles in a Dynamic Marketplace
CHANNEL ROLES IN A
DYNAMIC MARKETPLACE
Teacher – Shahed Rahman
Subject – Marketing Channel
Week – 2
GAUSE’S PRINICIPLE
Gause’s Priniciple of
Interspecific competition
relates to channel roles
Two Protozoa
Need eight resources to survive
Both struggle to survive
If resources are limited – both
can survive
Not enough resources – one
have to die
CHANNEL RELATIONSHIP MODEL (CRM)
It’s a complex environments where channel
members operate
Channel members must fight to achieve the
competitive advantage
Competitive Superiority
Restrictive Ranges
Character Displacement
COMPETITIVE SUPERIORITY
A Channel member may emerge
as a competitive superior
It can force rivals to take the exit
‘Survival of the fittest’
RESTRICTIVE RANGES
Channel member may differ across distinctive
environmental conditions
Some prosper in one place while others flourish
in different domains
Each member recognize its limitation in
environments and choose to compete in a
different environment
Eg. Sears take of themsleves from financial market
and focused on retail business
CHARACTER DISPLACEMENT
Channel members rapidly
evolve in diverse ways
Taking on different properties
to minimize direct competition
Each corporate must
continuously adapt to dynamic
channel environments
CHANNEL BEHAVIORS IN COMPETITIVE
ENVIRONMENTS
Consider Sears, Kmart, Wal-Mart
and Radio Shack.
There stores overlap in the
merchandise they sell, the
customers they serve, and the
areas where they operate. But to
survive, each of there retailers has
had to differentiate itself in
important ways
INTERSPECIFIC COMPETITION IN
MARKETING CHANNELS
How different business
can exist in the same
economic community by
occupying different niches
Each business must set
itself apart in some
meaningful way to prosper
in competitive markets
eg. Some follow everyday
low pricing
Some follow a
unique product line
CHANGING ENVIRONMENTS: A SHARED
CONCERN
React while environments are
changing to achieve its current
position
In this process channel member
attempt to differentiate itself
from other member operating at
the same level
Eg: Made in USA – Focusing on
quality rather than the price by
saying its better than the
imported goods.
CHANNEL ROLES IN EXCHANGE SYSTEM
Supplier Relationship
Customer Relationship
Lateral Relationship
SUPPLIER RELATIONSHIP
Involve three principal channel roles:
Source
Producers
Sources firms supply raw material
Generate components parts, process materials, or finished
goods
Wholesalers
Market products for resale or institutional use
It was based on branded products
Wholesalers are also performing sales and
marketing functions that has been assigned to
producers
Take physical possession of the goods they market but
they not assume ownership
WHOLESALERS CLASSIFICATION
Wholesaler
Classification
Take
Physical
Possession
Take
Negotiation
Title to Function
Goods Performed
Promotional
Function
Performed
Merchant
Wholesaler
Yes
Yes
Yes
Yes
Manufacturer’s
Sales
Organization
No
Yes
Yes
Yes
Agents /Brokers
No
No
Yes
Yes
Commission
Merchants
Yes
No
Yes
Yes
CUSTOMER RELATIONSHIP
Retailers ( Store and Nonstore)
Consumers (Individual and Organizational)
Department Stores
Specialty Stores
Convenience Stores
Discount Stores
Variety Stores
Supermarket
FOR A BETTER CUSTOMER RELATIONSHIP
Increase in the use of
electronic shopping
Increase in the use of mail
order catalog/direct mail
More manufacturer’s outlet –
it’s a fashion in US economy
Hypermarket – one stop mall –
self service
LATERAL RELATIONSHIP
Involve partnership between firms
operating at the same channel level
Based on cooperation and trust
Shared goals and work together to
improve design, quality, delivery,
promotional or manufacturing
Eg- Star Alliance
KEY CHANNEL RELATIONSHIPS AND
CHANNEL ROLES
Channel Relationships
Channel Roles Performed
withing the Relationship
Supplier Relationships
Source
Producers
Wholesalers
Customer Relationships
Retailers ( Store and nonstore)
Consumers (Organizational and
Individual )
Lateral Relationship
Source
↔ Source
Manufacture ↔ Manufacture
Wholesaler ↔ Wholesaler
Retailer
↔ Retailer
ESTABLISHING CHANNEL ROLE
IDENTITIES
Services
Innovation
Flexibility
Timing
DISCUSSION QUESTION
Gause’s Principle of Interspecific Competition
Compare the role of Wholesalers and Retailers
Role Expectation