Marketing Channel Strategy



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Marketing Channel Strategy An Omni-Channel Approach

spatial convenience
provided by market decentralization in wholesale 
and/or retail outlets increases consumers’ satisfaction by reducing transportation 
requirements and search costs. Community shopping centers, neighborhood super-
markets, convenience stores, vending machines, and gas stations are but a few 
examples of the varied channel forms designed to satisfy consumers’ demands for 
spatial convenience. Business buyers value spatial convenience too: the business
PC buyer appreciates that CDW delivers PCs directly to the place of business, as well 
as coming to pick up computers that need service.
Waiting or Delivery Time
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Waiting time
is the time that the end-user must wait between ordering and 
receiving the goods or post-sale service. The longer the waiting time, the more 
inconvenient it is for the end-user, who must plan or predict consumption levels 
far in advance. Usually, the longer end-users are willing to wait, the more compen-
sation (i.e., lower prices) they receive, whereas quick delivery is associated with a 
higher price paid. This trade-off is evident in CDW’s positioning for its small and 
medium business buyers, such that it has long focused more on ensuring faster 
delivery than its erstwhile competitors like Dell. However, in other situations, the 
benefits of longer wait times may not accrue to the customer.
EXAMPLE: APPS TO CUT WAIT TIMES (USA)
Fast food and fast casual restaurants are popular destinations and can get crowded at certain times 
of the day, such as during lunch hours. Many patrons stand in line at Chipotle and wait their turn to 
order, after which they can watch their food being prepared right in front of them. But like many 
restaurant chains, Chipotle also offers an app to enable consumers to order their food ahead. With 
these apps, users can reduce their wait times by preordering, then simply arriving at the restaurant 
to pick up their meal. In this sense, they cut in line, passing by those customers patiently waiting 
their turn.
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 This distinction clearly highlights two different types of end-users: those who enjoy the 
ritual of going to a restaurant, ordering, and seeing their food prepared fresh versus those who 
simply want their food quickly. The app caters to the needs of those who want to reduce their 
wait times; might it also end up alienating those who wait patiently in line, though? Walk-in, no 
appointment hair salon chains such as Great Clips similarly use online check-in apps to help patrons 
reduce their wait times.
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 When they go to register online, they are informed of the estimated wait 
times and then can check in online and arrive at the salon at the best estimated time of service.


END-USER ANALYSIS
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The intensity of demand for quick delivery varies for the purchase of original 
equipment (for which it tends to be lower) versus the purchase of post-sales service 
(for which it is frequently very high). Consider a hospital purchasing an expensive 
ultrasound machine. Its original machine purchase is easy to plan, and the hospital 
is unlikely to be willing to pay a higher price for quick delivery of the machine itself. 
However, if the ultrasound machine breaks down, the demand for quick repair 
service may be very intense, and the hospital may be willing to pay a premium 
price for a service contract that promises speedy service. In such cases, a sophisti-
cated channel manager must price the product versus post-sale service purchases 
very differently, to reflect the different concatenation and intensity of demand for 
these service outputs. Similarly, airline ticket prices change as the departure date 
approaches, to account for both the number of seats remaining and the lower price 
sensitivity of business travelers who need to reach a specific destination and do not 
want to wait.
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Another example combines demands for bulk-breaking, spatial convenience, 
and delivery time. In the beer market in Mexico, understanding market demand 
requires an understanding of the market’s and consumers’ environmental char-
acteristics and constraints. A market with limited infrastructural development 
usually is characterized by consumers with high demands for service outputs, such 
as spatial convenience (i.e., consumers cannot travel easily to remote retail loca-
tions), minimal waiting time for goods, and extensive bulk-breaking (consumers 
lack sufficient disposable income to keep “backup stocks” of goods in their homes 
in case of retail stockouts). In the Mexican market, major beer manufacturers sell 
through grocery stores, liquor stores, and hypermarkets, as well as through restau-
rants. As an additional channel, though, they sell beer through very small local 
distributors—apartment residents who buy a small keg of beer and resell it by the 
bottle to neighborhood buyers who cannot afford a six pack. The end-users also 
usually provide their own (washed, used) beer bottles for the “local” distributor 
to fill. The manufacturer values this channel, because the other standard retail 
channels cannot meet the intense service output demands of these consumers.
Product Variety and Assortment
When the breadth of the variety or the depth of the product assortment available to 
end-users is greater, so are the outputs of the marketing channel system, but so too 
are the overall distribution costs, because offering greater assortment and variety 
means carrying more inventory. 
Variety
describes generically different classes of 
goods that constitute the product offering, namely the breadth of product lines. The 
term 

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