Lectures Marketing management: Chapter 15 - ThS. Nguyễn Tiến Dũng

Lectures "Marketing management - Chapter 15: Designing and managing integrated marketing channels" provides students with the knowledge:  Marketing channels and value networks, the role of marketing channels, channel design decisions, channel management decisions, channel integration and systems. Invite you to refer to the disclosures.

CHAPTER 15 DESIGNING AND MANAGING INTEGRATED MARKETING CHANNELS Nguyen Tien Dung, MBA Email: dung.nguyentien3@hust.edu.vn Chapter Questions What is a marketing channel system and value network? What work marketing channels perform? How should channels be designed? What decisions companies face in managing their channels? How should companies integrate channels and manage channel conflict? What are the key issues with e-commerce and m-commerce? © Nguyễn Tiến Dũng Main Contents Marketing Channels and Value Networks The Role of Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Integration and Systems Conflict, Cooperation, and Competition E-Commerce & M-Commerce Marketing Practices © Nguyễn Tiến Dũng Marketing Channels and Value Networks ● The Importance of Channels ● Hybrid Channels and Multichannel ● Marketing ● Value Networks © Nguyễn Tiến Dũng Introduction ● Definition: ● A marketing channel – a set of interdependent organizations involved in the process of making a physical product or a service available for use or consumption ● The importance of channels: channel functions and flows ● Channel development ● Hybrid channel ● Marketing channels and value networks © Nguyễn Tiến Dũng ● Does a manufacturer need an intermediary or not? ● Viewpoint 1: very necessary ● Viewpoint 2: no need ● The gap between a manufacturer (what he is the best) and a consumer (what he needs) ● ● ● ● ● The number of product categories Quantity of each product category Convenience Time Payment © Nguyễn Tiến Dũng The importance of channels ● Serve markets ● Implement marketing functions ● Make markets: ● Push versus pull strategy © Nguyễn Tiến Dũng Value networks ● A value network – a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings ● Supply Chain Management (SCM) ● Enterprise Resource Planning (ERP) ● Customer Relationship Management (CRM) © Nguyễn Tiến Dũng Value Chain © Nguyễn Tiến Dũng Marketers’ participation in the value network ● Present: downstream, CRM, product and customer managers ● Future: upstream, network managers © Nguyễn Tiến Dũng 10 3.4 Evaluating the major alternatives ● Economic criteria ● Control and criteria © Nguyễn Tiến Dũng 23 The Value-Adds versus Costs of Different Channels © Nguyễn Tiến Dũng 24 ● Company-owned store: ● High TFC ● Low commission / discount  Low TVC ● High investment cost (at the beginning) ● Sales agent / a distributor ● TFC ? ● High commission rate / discount  High TVC ● Investment? © Nguyễn Tiến Dũng 25 Channel-Management Decisions ● Selecting Channel Members ● Training and Motivating Channel Members ● Evaluating Channel Members ● Modifying Channel Design and Arrangements ● Channel Modification Decisions ● Global Channel Considerations © Nguyễn Tiến Dũng 26 Channel power ● Coercive power ● Reward power ● Legitimate power ● Expert power ● Referent power © Nguyễn Tiến Dũng 27 Mini Case: Dell Computer ● What are the problems facing Dell? © Nguyễn Tiến Dũng 28 Dell’s problems ● From B2B to B2C? ● Struggled? Why? How? ● Direct channels (website, sales force)  indirect channels (to sell more to consumers) – did not have any relationship with retailers ● Reinvigorated competitors: HP (designs, competitive prices) ● Call center: service centers ● Number of centers: cut down  have wait longer ● Time limitation for answering customers  reduces customer satisfaction.S © Nguyễn Tiến Dũng 29 Channel Integration and Systems ● Vertical Marketing Systems: ● Suppliers  Company  Intermediaries  Consumers ● Horizontal Marketing Systems ● Company + Others: KFC & Pepsi; McDonald’s & Coca-Cola ● Integrating Multichannel Marketing Systems © Nguyễn Tiến Dũng 30 Conventional Channels vs Vertical Marketing Systems (VMSs) ● Conventional channels: ● consist of an independent producer, wholesaler(s), and retailer(s) ● each is a separate business seeking to maximize its own profits, even if this goal reduces profit for the system as a whole ● No channel member has complete or substantial control over other members ● Vertical marketing systems (VMSs) ● Administrative VMS ● Contractual VMS: franchises ● Corporate VMS: Vinamilk + supermarket © Nguyễn Tiến Dũng 31 ● Source: http://news.mcdonalds.com/press-releases/mcdonald-s-announces-developmental-licensee-for-vietnam-nyse-mcd-1034285 © Nguyễn Tiến Dũng 32 Hybrid channel grids © Nguyễn Tiến Dũng 33 Conflict, Cooperation, and Competition ● Types of Conflict and Competition ● Causes of Channel Conflict ● Managing Channel Conflict ● Dilution and Cannibalization ● Legal and Ethical Issues in Channel Relations © Nguyễn Tiến Dũng 34 Conflict, Cooperation, and Competition Types of conflict • Vertical conflict • Horizontal conflict • Multichannel conflict © Nguyễn Tiến Dũng Causes of channel conflict • Goal incompatibility • Unclear roles and rights • Differences in perception • Intermediaries’ dependence on the manufacturer Conflict resolution • • • • Diplomacy Meditation Arbitration Court 35 E-Commerce & M-Commerce Marketing Practices ● Pure click companies: dot-com companies ● Buy.com ● Bestbuy.com ● Amazon.com ● Alibaba.com ● Brick-and-click companies: traditional companies with website for e-commerce ● M-Commerce: mobile © Nguyễn Tiến Dũng 36 M-Commerce © Nguyễn Tiến Dũng 37 ... network managers © Nguyễn Tiến Dũng 10 The Role of Marketing Channels ● Channel Functions and Flows ● Channel Levels ● Service Sector Channels © Nguyễn Tiến Dũng 11 © Nguyễn Tiến Dũng 12 Channel... key issues with e-commerce and m-commerce? © Nguyễn Tiến Dũng Main Contents Marketing Channels and Value Networks The Role of Marketing Channels Channel-Design Decisions Channel-Management Decisions... Tiến Dũng 12 Channel Functions and Flows © Nguyễn Tiến Dũng 13 Channel Levels © Nguyễn Tiến Dũng 14 Vietnam Airlines Service Sector Channels © Nguyễn Tiến Dũng Booking Office Customers Sales agents