Marketing Channel Strategy
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| Bulk-breaking
refers to the end-user’s ability to buy a desired (possibly small) number of units, even if the product or service originally was produced in large, batch-production lot sizes. When the channel system allows end-users to buy in small lots, these purchases more easily support consumption, reducing the need for end-users to carry unnecessary inventory. However, if end-users must purchase larger lots (i.e., benefit less from bulk-breaking), some disparity emerges between purchasing and consumption patterns, burdening end-users with product handling and storage costs. The more bulk-breaking the channel does, the smaller the lot size end-users can buy, and the higher the channel’s service output level, which likely leads the end-user to be more willing to pay a higher price that covers the costs to the channel of providing small lot sizes. The common practice of charging lower per unit prices for larger package sizes in frequently purchased consumer packaged goods categories is a well-known example of this phenomenon. Consider how a family might buy liquid laundry detergent at END-USER ANALYSIS 324 Extent of Bulk-Breaking Desired Spatial Convenience Waiting or Delivery Time Product Variety and Assortment Customer Service Ability to buy desired amount Ease of access, distance Time between order and delivery Breadth and depth of product lines Ease of shopping Information Sharing Education and engagement FIGURE 10.1 Drivers of Service Outputs in Marketing Channels home versus when renting a vacation house. At home, the family likely buys the large, economy size of detergent, perhaps at a supermarket or hypermarket, because it is easy to store in the laundry room at home, and eventually, the family will use up that large bottle of detergent. The large bottle is comparatively inexpensive, per fluid ounce. But when on vacation for a week at a rental cottage, the family likely prefers a small bottle of detergent—despite its much higher price per fluid ounce—because they do not want to end the week with a large amount left over (which they will prob- ably have to leave at the cottage). Most vacationers are neither surprised nor reluctant to pay a considerably higher price per ounce for the convenience of buying and using a smaller bottle of detergent when on vacation. Indeed, it is more common for the unit prices for such products to be much higher in resort town supermarkets than in supermarkets or hypermarkets that primarily serve permanent residents. 9 In these examples, we assume that the more an end-user consumes, the more util- ity he or she attains. However, not all goods are “good.” Consumers assess the pros and cons of each item they purchase; in the case of vice goods such as cookies or soda, they may want to purchase limited portions to help them stay healthy. Thus, firms can profit more from selling smaller packages when the general consumer finds a small portion more acceptable. 10 In bottom-of-the-pyramid (BOP) markets in emerging economies, some stores sell cigarettes individually, at a much higher unit END-USER ANALYSIS 325 cost, not necessarily because they are vice products but rather because consumers will pay higher costs to get their nicotine fix, without being able to afford an entire pack of cigarettes. Spatial Convenience The tải về 5.39 Mb. Chia sẻ với bạn bè của bạn:
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