Marketing Channel Strategy
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functions that constitute a process, flowing through the channel, performed at different points in time by different channel members. In business settings, these functions entail carrying or holding inventory, generating demand through sell- ing activities, physically distributing products, engaging in after-sales service, and extending credit to other channel members. We introduced this list of nine universal channel functions in Chapter 1; they would be performed in a hypothetical channel that consists of producers, wholesalers, retailers, and consumers. Some functions move forward through the channel (physical possession, ownership, and promo- tion); others move up the channel from the end-user (ordering and payment); and still other channel functions can move in either direction or reflect activities by pairs of channel members (negotiation, financing, risk, information sharing). Channel functions take different forms in different points of the channel. It is common for spare parts distribution to be handled by a separate third-party distributor, uninvolved in the distribution of original products, for example. Three competing manufacturers—Ingersoll-Rand International Bobcat, Clark Material Handling, and the Spicer Division of Dana Corporation—all use the same German third-party logistics (3PL) firm, Feige, to handle their non-U.S. dis- tributions of spare parts. Feige simplifies the otherwise difficult job of managing spare parts inventories that must be shipped quickly to multiple countries with different language traditions. Feige not only receives, stores, and ships spare parts, it also provides debt, credit, and cash management services for its manu- facturer clients. Dealers can order from Feige online and track their orders, after first checking that the desired parts are in stock. Feige’s sophisticated informa- tion technology systems produce a remarkable 95 percent in-stock rate for its dealer customers. Customers’ constant demands for quick delivery of spare parts make the use of this intermediary a superior strategy, from both cost-control and demand-satisfaction perspectives. 5 In such situations, a channel designer even might present its two physical possession activities (original equipment versus spare parts) separately, because they represent important, unique functions in the movement of products to the market. Not every channel member needs to participate in every channel function. Specialization is a hallmark of an efficient channel. For example, physical posses- sion of a product could move from the manufacturer to wholesalers to retailers and finally to end-users; an alternative channel might eliminate wholesalers and rely instead on manufacturers’ representatives, who never take physical possession or ownership. The physical possession function still is performed by the manufac- turer and retailer in this case, but not by other intermediaries. In general, channel CHANNEL BASICS 43 functions get shared only by channel members that can add value or reduce costs by bearing them. However, specialization also increases interdependencies in chan- nels, creating a need for closer cooperation and coordination in channel operations. In addition, the performance of certain channel functions is correlated with that of other functions. Any time inventories are held and owned by one member of the channel system, financing is occurring. That is, when the wholesaler or retailer takes title and assumes physical possession of some portion of a manufacturer’s output, this intermediary is financing the manufacturer, because the greatest com- ponent of carrying costs is the capital tied up by inventories held in a dormant state (i.e., not moving toward final sale). Other carrying costs include obsolescence, depreciation, pilferage, breakage, storage, insurance, and taxes. If the intermediary does not have to invest funds to pay inventory-holding costs, it can invest instead in other profitable opportunities. Capital costs thus equal the opportunity costs of holding inventory. As this discussion suggests, given a set of functions to be undertaken in a channel, a manufacturer must assume responsibility for some, shift others to various inter- mediaries in its channel, or even shift everything. Accordingly, we note another important truth about channel design and management: it is possible to eliminate or substitute for the members of the channel but not for the functions they perform. When channel members leave the channel, their functions shift, either forward or backward, to be assumed by other channel members. Thus a channel should elim- inate a member only if the function it performs can be done more effectively or less expensively by other channel members. Cost savings achieved by eliminating a channel member result not because that member’s profit margin gets shared by the rest of the channel but rather because the functions previously performed by that channel member get completed more efficiently with another channel design. Finally, we highlight an important channel function that permeates all value- added activities of a channel: information sharing. Manufacturers share product and sales information with their distributors, independent sales representatives, and retailers, which helps them perform the promotion function better. Consumers pro- vide information about their preferences to the channel, which improves its overall ability to supply valued services. Producing and managing this information effec- tively is central to distribution channel excellence. To design an optimal channel strategy for a targeted end-user market, the designer needs to audit the existing marketing channels serving this segment to evaluate the capabilities of each potential channel, in terms of the nine key functions and how well each version meets the segment’s service output demands. Channel func- tions pertain to all channel activities that add value to the end-user, beyond merely handling or moving the product along the channel, and include promotion, nego- tiation, financing, ordering, payment, and so forth. Along with these performance considerations, channel structure decisions must reflect an effort to minimize chan- nel function costs. Each channel member has a set of channel functions to perform; CHANNEL BASICS 44 ideally, the allocation of activities results in their most reliable performance at a minimum total cost. This task is not trivial; it involves comparing activities across different members of the channel. Designing Channel Structures and Strategies A channel manager conducts analyses to determine the degree of channel inten- sity, mix of channel types/identities, and use of dual distribution, as well as to close any service or cost gaps. By identifying demands for service outputs among different segments in the market, a channel analyst can find an optimal channel structure to satisfy them efficiently and effectively. For each segment, the level of tải về 5.39 Mb. Chia sẻ với bạn bè của bạn:
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