Quiz

• Distribution management is the process used by businesses to oversee the movement of goods
• The process goes from supplier to manufacturer, then onto the wholesaler or retailer, and finally to the end user
• To meet business-to-consumer (B2C) and business-to-business (B2B) expectations, a variety of different channels, often both land based and Internet-based, is needed
• The pursuit of an effective multi-channel strategy raises four key challenges:

  • Finding the optimal multi-channel mix
  • Creating multi-channel synergies
  • Avoiding multi-channel conflicts
  • Gaining a sustainable competitive advantage via multi-channel strategy
• Internet-based online channels have become mainstream channels in the channel mixes of both B2C and B2B organizations
• Multi-channel marketing mixes many distribution and promotional channels into a single, unified strategy to attract customers
• Channels include, but are not limited to, email, direct mail, websites, social media, and/or retail storefront
• Using online channels to obtain information about a product before purchasing it in conventional “brick and mortar” channels is a common example of multi-channel synergy
• Multi-channel synergies can also emerge when different channels in the mix “help each other out,” resulting in better customer service
• The ability to mitigate multi-channel conflict requires knowledge of economic and behavioral factors underlying marketing channels as well as astute channel strategy
• Companies struggle to find a sustainable competitive advantage that cannot be easily or quickly copied by competitors
• In recent years, channel strategy and particularly multi-channel strategy have attracted increased attention as a means for gaining a sustainable competitive advantage
• The marketing channel is viewed and defined as: “the external contactual organization that management operates to achieve its distribution objectives”
• Contactual organization refers to firms or parties involved in negotiatory functions such as buying, selling, or transferring title from one firm to another
• The marketing mix model portrays the marketing management process as a “strategic blending” of the four controllable marketing variables (product, price, promotion, and place) to meet customer demands
• External uncontrollable elements include the economy, sociocultural patterns of buyer behavior, competition, government, and technology
• Channel strategy is concerned with setting up and operating the contactual organizations responsible for meeting the firm’s distribution objectives
• Logistics management focuses on providing product availability at the appropriate place and time in the marketing channel
• Flows in Marketing Channels:

  • Product flow: the physical movement of the product from the manufacturer to the consumer
  • Negotiation flow: the movement of the product from one party to another
  • Ownership flow: the movement of the title of the product in the process
  • Information flow: involves communication of necessary information for product delivery
  • Promotion flow: flow of persuasive communication through advertising, personal selling, sales promotion, and publicity
• Multi-channel strategy is when a firm reaches its target consumer through more than one channel
• Ancillary members provide services to the channel members after basic channel decisions have been made
• Examples of ancillary members include banks, insurance agents, storage agents, contractors, and repair shops