Market Channel Management Decision - Distribution Decisions, Marketing Management Video Lecture | Marketing Management - B Com

so if we go quickly through the chapter
it says marketing channels that you set
and let's see it says here you set which
is the set of interdependent
organizations they participate in the
press in the process of making products
or services available for user
consumption
so everyone who helped people reach
their products it says here you've got
the merchants agents facilitators you
guys are ok with these we've got the
ultimate selling price you need to take
care of your merchants or your
distributors you know if you pay on
average 7% advertising you will need to
pay 30 to 50 percent to the channel
member you see you guys know those small
box shops that sell books they normally
have half 50% of the price of the book
so if you buy if the book is 2,000 they
make a thousand do you see now of course
if you see if they saw the book for
2,000 they make a thousand they have a
good incentive to have your book
available you see because they will get
a good return now if you go and you sign
an agreement with them and you give them
only let's say 10% only do they have an
incentive to buy your book and make it
available
you see they will not invest if they
don't invest then you need to sell it on
credits and then how much are you going
to put sell on credit this was going to
be you know and then and when are you
going to collect it back so it becomes
another business issue if you think
about push strategy and a pull strategy
push a strategy if I decide to go ahead
and take my products and talk to the
distributors and tell them you have to
keep it and maybe I cell phone credits I
give them training on my product they
give them a lot of training brochures as
for shakers pull strategy you're mainly
advertising so basically asking the
customer to go requested you see if 10
customers go to the same shop and they
say I need to get this product so I need
this product what will there
versioned they'll do after the 10th
request for that product you go buy it
do you see you know for example this is
what they say you know you go to the
bookstore and you say I want this title
another one go say I want this title
third customer comes and why the same
title now of course they record all of
the requests you know by the fourth when
they order it so they make it available
so the next order your if they add that
is product available do you see where I
was started to one of my mentees they
have a project on hustle so they sell a
cell and now when you go to the pharmacy
and you say I want a cell that's not
normal honey
it's a medication honey type so if you
go to the pharmacy three times saying I
want this special honey medication for
my kid and another time sort of an order
by a doctor for this honey
and a third what will the pharmacy do go
order this honey because the customers
are requesting it do you see then the
customer comes back to you saying hey
please give me so that's another way to
actually pull your products you know to
the customer so here we've got this
multi-channel marketing is you and you
go through more than one channel a value
networks is that everyone in the network
they add value so that you can become a
king role of the marketing channels what
do these people do the contact they give
you experience they are specialized they
give you ability to have a scale of
operations scale of operation you can be
big right so let's say yeah you know if
you've got you know small if you sell
lemon juice and you have your own place
you have one location imagine now if you
can have like 100 people sell lemon
juice for you you see you can make huge
money you can scale your big it touched
about the functions of intermediaries
these people they give information to
customers they promote
that they negotiate with the customer
they may provide the order the finance
the paperwork they may do an
installation they may take the some
risks they may do the physical
distribution they process the payments
they take the title so a lot of things
these people do next we've got this
channel channel functions and flow we've
got this forward flow and a backward
flow you know your company you give
transportation communication to the
customer customer learn about your
products and services and then we've got
this back or there were orders and
payments and money and in the middle you
have all of these these are five
marketing flows physical title payment
information promotion but you guys okay
with all of these now can I show you the
customer will pay the bank the bank
would pay the dealer the dealer would
have a dealer bank manufacturer bank so
you can see the flow of money it goes
from one bank to the other but maybe the
ownership it goes only through those and
then you know here they've got the
actual physical distribution you can see
how information go between this between
the customer and the manufacturer and
then also between the customer and the
dealer between the dealer and the
manufacturer so that's how the
distribution become important here we're
talking about zero level direct
marketing channels that's when you go
direct to the customer
there's no intermediary you guys
remember Dell website you go wwm you
order from there you see so they'll get
their stuff from their supplier right so
the supplier will make the chips and the
memory card and then sent them all to
them then we seal the custo order from
the customer directly from then where
does it go to shipping company customer
do you say so maybe there's a shipping
company in the middle you guys remember
the idea of insourcing have you
of insourcing like a positive
outsourcing Network no different than
outsourcing insourcing is what no this
is like operation you make laptops you
do the laptops yourself and use other
laptops the insourcing is the example
was Toshiba
did you in sourcing to FedEx let's say
that you customer you have to ship a
laptop you call the company Toshiba to
the Baker ship I've got a problem with
my laptop it's not working they do the
troubleshooting online okay you've got
your hard disk is broken send it to us
and we will fix it they tend me okay so
how do I send it to you the to do don't
worry you print this PDF file and the
PDF says Federal Express airway number
and then the number you just take this
paper stick it and call FedEx and they
will pick it up you don't pay us you
don't pay anything then the FedEx world
are not on your door say okay I've got
to receive this order and where is the
package I will pick it to deliver to
Toshiba the FedEx guy will take the
laptop go two days later the same guy or
different guy will come from FedEx here
is your laptop fixed
the laptop did not touch Toshiba hands
it only touched FedEx FedEx people they
declare a laptop to FedEx facility
they've changed the hard-disk they give
you the new one they have been trained
and they return it back do you see
because FedEx they have a lot of offices
and one of their offices they do Toshiba
insourcing service so instead of they
take it to Toshiba 2g ready to do the
work in that facility back to your FedEx
do this business repay them you know
this much because remember for headaches
they are guaranteed now all of the
shipment our FedEx they will not go to
Europe es or da
so for FedEx this is another business on
the side we make more money and at the
same time we do the delivery yeah so the
idea here is so channel levels you've
got this zero level channel one channel
two three here we've got
business-to-business it's the same thing
it's just you know it's a business to
another business that's a b2b and then
you need to stick some decisions you
need to see what customers really want
people want that computer to be fixed
quickly is this the most quickly way to
do it that's gorge objective and
constraints what are some of the
problems that you may have and
identifying and evaluating alternatives
so what are my options
customer needs and what people want good
price what people want convenience maybe
people want it fast maybe people want to
go and shop you see remember a gap you
know their objective is to have a nice
shopping experience so they're more into
the distribution business and their
people want to get the experience of
shopping how many people love shopping
yeah you enjoy you go you see you return
you come back it's fun and that's the
product assortment where you are and who
are you next to you see sometimes you
want to open a shop next to another shop
that people love to shop and you see
their bubble stop by and they never
talked about with people customers and
poor customers can value different
things in different countries you know
by itself this slide is like a it's
gonna be like a thesis you see what do
people want in chopping right channel
service out ports is spacial convenience
some people like to go to big stores
people like to maybe walk in a shop
what's the best supermarket to shop in
because what it's big
you see space by itself it may be
organized the Mehran is bigger for some
people so sometimes people prefer you
know the waiting delivery time hold it
will take what place you go and you know
it's fast
yeah restaurants which one hey buddy you
call immediately it you get it some
people prefer the service you know what
services they provide you some people
will look at the variety you want to go
to a place because you know you have a
big variety so you will not be stuck
with one or two so people will look at
the lot size how big I want to bar in
quantity isn't so so these are some of
the service out ports special
convenience the degree to which the
marketing channel makes it easy for
customers to purchase the products
remember if sometimes you go to this
store with you know you go you have a
big space you can see all the things you
want you take whatever you want enough
space to see sometimes you go to the
place where they don't have a full
service you know they maybe it's a
smaller or maybe they have to pick it up
for you
do you see the idea of what degree are
you making it easy for the customer to
purchase maybe if you know the spatial
convinced has to do with space like from
space objectives and constraints we've
got marketers should should state you
know what is their objective with these
channels you know so maybe if you choose
this particular channel member maybe
because they have their idea for about
you have a bulky products then you need
to find a distribution channel that will
work with this type of maybe your
for example if I sell pebbles I need to
have a place where they have a lot of
space to take because pampers takes a
big space do you see so we need to you
know we need to be able to and remember
in pampers you need place where you have
like six sizes and each size has
different volume number you know the
quality itself so you need to have big
do you say so you had on a bulky so do
you think you know for from you know for
some of these shops would they be happy
to take your product it will take a lot
of space
sometimes you see sometimes they say you
have a very small product let's say you
have a juice did you see those small
juices there are 250 mainly very small
but if you go to the refrigerator
there's you know limited space do you
see so you know the idea of you know how
much is your how big is your product and
how much space they can you know maybe
if you have a bulky product you may have
constrained to become a problem
sometimes let's say if you if I sell
juice now now all of the juices are
maybe this this is the highest then if
my juice is like this I have a big
problem to find the refrigerator to take
it I need to empty like two shells in
order to draw my product a do you see
this can be a constraint you see so so
did you see a red ball they have their
own bread do you see and they do it for
you know it's also a promotional reason
but also from a distribution perspective
when customers walk in they see their
own you see remember red ball but that's
their strategy it's their decision you
know even that car did you see the car a
red ball car same idea so then they have
an objective is to you know get
attention through distribution identify
channel alternatives so these are
different channel
relatives identifying channel channel
alternatives the type of intermediaries
the number of intermediaries their terms
and responsibilities who's responsible
of what in case
who pays when they pay do they pay in
advance do they pay late what happens of
customer complains what types of
intermediaries we've cut those dealers
direct to consumers oh he and you know
as an OEM yeah
combined satellite radio manufacturers
you know this is how we've got the
number of intermediaries you want to
have all of the people are
intermediaries or only one or maybe very
few or you select them you choose them
for example I want my Samsung to be
available in the Mehran and were there
you know in this small the Soudan eShop
evaluating channel alternatives you know
for example here if you talk about the
cost per transaction if you do a
face-to-face transaction to cost you $4
for every transaction let's say here for
talking about say telecommunication
services if you start to sell through a
face-to-face here $4 per transaction
needs to be bulk it's running here
machine 27 cents so online transaction
cost per transaction is sent you say but
you need medium for Amazon they have
billions of you know transactions or it
would be millions of dollars of cost and
forward transactions you know by formula
2 will cost you some and this show you
the value-added versus cars
differentiation so we start internet
that's you know maybe very low value
added but it's also low cost per
transaction and then you know
telemarketers more expensive retailer
stores distributors value-added and
Salesforce you know a Salesforce you IR
people to go sell your products and this
is a break-even analysis it says this is
the number of sales you need to sell and
to cover this is a very important
question this is the number one business
question in any business plan like for
your projects tomorrow you have to have
some sort of an indication it doesn't
have to be calculated you know 100
percent accurate but you need to tell me
if I am going to do this business I sell
burgers you know how many I need to sell
not necessarily you tell me you know
seven burgers and a half per day you
need to tell me that you know per month
you need at least two gets a is worth of
this much money you know this is how the
business will generate money below that
I'm losing over that I'm making money
here we're talking about channel member
decisions you know you need to train
them select them evaluate them you guys
remember when we talked about the
evaluation what they do remember Western
Union examples they sent someone to
check do they have life do they have a
guard is the sign clear was the
paperwork available will there a pen
extra did the person smile did they say
thank you at the end did they do you see
we talked about this horizontal
marketing systems
you know you get together through here
you got the multi-channel all of these
different ways vertical you've got big
boss and then small the same
hybrid grid here when you start to make
it as a grid you know what's a grid like
a chart okay so here you will make like
a checkmark since here let's say a
number one says here Internet and then
says gather relevant information about
the internet national account direct
sales telemarketing Direct Mail retail
stores distributors and so so all of
these over here you know you've got
these vendors and then here they've got
this demand generation tasks
you know gather relevant information
about this may be here over see
ownership transfer you know right here
so this kind of gives you an indication
about the different channels the
different merchants what company need to
think through their channel architecture
determine which channels should perform
which functions so here we've got this
conflict cooperation competitive and
competition what you want you want all
of you Arab you had all of your thread
distribution channels to be on the right
direction right you want them all to do
the same thing you want actually to copy
them do you see but that doesn't always
happen they always screw each other
do you see everyone try to cheat on the
system so they start off conflicts so
what do you do if you have a conflict
you have to solve this conflict how do
you solve this conflict either vertical
or horizontal
let's see vertical is when this guy have
a problem with this guy when this guy
has a problem with this guy do you see
that's vertical horizontal is when this
and this one here on the same level they
have a problem okay so if I then
dealer has a problem with ties dealer is
that horizontal vertical horizontal
don't wanna same level okay if samurai
dealer has a big problem with son I just
big distributor with the Solana point of
saying that's a vertical you
see sometimes they have a problem the
dealer starts to take the commission of
the point of sake and the point of sale
starts to screw the mother company when
it comes to the promotion and they lie
here we're talking about how you manage
their conflict either you pay you become
the middle you'd go a nigga coerced or
maybe employee exchange let's see next
we've got this ecommerce you guys know
what's a brick can click brick and click
that's where it's online and it's
offline and pure click there only online
and then business-to-business in
commerce there you know through
computers you do business and you don't
want a brick and mortar that's where
it's an online where it's offline only
called brick and mortar that's offline
only they don't have online existence
most of the businesses today they have
to click here talking about e-commerce
the idea of text promotions idea of a
GPS features now these are becoming like
one so these are marketing practices
that's the end of the chapter