distribution lesson 1

• Channel Strategy


  The broad principles by which the firm expects to achieve its distribution objectives for its target market(s)
• Channel strategy


  Strategy for brokers, distributors, maintaining relationships with middlemen because they are the bridge on how you can reach your customers
• General marketing strategy


  Strategy for brand, partnerships
• A sound approach is to formulate marketing channel strategy to provide the guiding principles for dealing with distribution decisions on a proactive rather than a reactive basis
• Proactive marketing channel


  You create the way to reach your customers and base your plan on that
• Reactive marketing channel


  You just decide when there is an opportunity offered to you, like a retail company wanting to partner, and you just react whether you want it or not
• The role of distribution should be considered by the highest management levels of the organization
• There is a growing belief among top management experts that distribution does warrant the attention of top management, because competition has made the issue too important to ignore
• Distribution


  Contributes to "place" in the marketing mix
• Distribution


  Ensures the product is in the right place, right time, and right price
• As firms have become more orientated to target markets, the relevance of distribution has become apparent to an increasing number of companies because it plays such a key role in providing customer service
• It is increasingly more difficult for a company to differentiate its marketing mix from that of the competition, except for distribution (place)
• Distribution advantages, if manifest in a superior marketing channel, are based on a combination of superior strategy, organization, and human capabilities, which is a combination not easily or quickly imitated by competitors
• Neglect of distribution strategy by competitors provides an excellent opportunity for those companies who are willing to make the effort to develop distribution as a key strategic variable in the marketing mix
• Differential advantage / Sustainable competitive advantage


  Advantageous position in the market; using strengths to better satisfy customer demands than competitors on a long-term basis
• Channel position


  The reputation a manufacturer acquires among distributors (channel members) for furnishing products, services, financial returns, programs, and systems that are in some way superior to those offered by competing manufacturers
• Channel positioning


  What the firm does with its channel planning and decision making to attain the channel position
• The selection of channel members should be consistent with the firm's broader marketing objectives and strategies and may also need to reflect the objectives and strategies of the organization as a whole
• Channel management from the manufacturer's perspective involves all of the plans and actions taken by the manufacturer aimed at securing the cooperation of the channel members in achieving the manufacturer's distribution objectives
• Distribution intensity

  a factor in deciding the degree of closeness a manufacturer should develop with its channel members
• Distribution portfolio analysis (DPA)


  A comprehensive method for categorizing channel members, helping the channel manager focus more insightfully on the channel members by viewing all of the channel structures and/or channel members as the portfolio
• Optimizing the marketing mix to meet the demands of the target market requires not only excellent strategy in each of the four strategic variables of the marketing mix, but also an understanding of the relationships or interfaces among them
• Performance evaluation should be viewed as an integral part of the development and management of the marketing channel rather than as an afterthought
• Channel strategy

  finding the best way to expose your services, products and brand identity to possible customers
• The most fundamental distribution decision for any firm or organization to consider is the role that distribution is expected to play in a company’s long-term overall objectives and strategies
• By “hooking up” with the right kind of channel members, the marketing mix can be substantially strengthened to a degree not easily duplicated with other variables
• synergy

  have been referred to increasingly as distribution partnerships, partnering, strategic alliances, or networks – can provide a substantial strategic advantage
• differential advantage based on the design of a superior marketing channel can yield a formidable and long-term advantage because it cannot be copied easily by competitors
• The key of channel positioning is to view the relationship with channel members as a partnership or strategic alliance that offers recognizable benefits to the manufacturer and channel members on a long-term basis
• channel members, though independent businesses, are from the customer’s perspective an extension of the manufacturer’s own organization
• Channel Strategies

  1. Closeness of Channel Relationships
  2. Motivation of Channel Members
  3. Use of the Marketing Mix in Channel Management
• Motivation of Channel Members

  find the means to secure strong channel member cooperation in achieving distribution objectives
• channel manager should keep the strategic concept of developing synergy clearly in mind