MKT 4320 Midterm

go-to-market strategy

go-to-market strategy

blueprint to deliver a firm’s offering to end-users in their preferred mode and method of buying

1. must perform analysis of industry channel practices to isolate critical successful factors

2. identify areas of improvement

3. develop policies and procedures to incentivize and alter channel partner's’ behaviors to motivate efficient execution of channel tasks

marketing channel

comprosied of inter/independent organizations that work to go to market with a product or service, so that it is avalaible for use or consumption

showrooming

visit physical stores but buy online

channel captain

takes most interest in the making of the channel for the product or the service

private label product

manufacturers make product but do not invest in the branded name for them

channel intermediary

• perform a specific function

• not typically heavily involved in the core business represented by products

online channels

• known as ecommerce

• direct retaining, order products through internet

omni-channel

• integrates functions that allow customers to shop- research, purchase, communicate, engage with and consume the brand

• “consumer engagement” is central to omni-channel approaches; they explicitly seek customer experience through efforts that rely on social
  media, email, web links, mobile platforms, store visits, promotional efforts, etc.

multi-channel

• Entails leveraging multiple channels that
  operate relatively independently

• Operate as clearly separate entities

• Consumers engage in cross-channel
  shopping by switching among online,
  mobile, and physical platforms during a
  transaction

disintermediation

the ability to remove or circumvent well-entrenched intermediaries from the marketing channel and its value chain

nine channel functions

1. physical possession

2. ownership

3. promotion

4. negotiation

5. financing

6. risking

7. ordering

8. payment

9. information sharing

service gap

amount of service supplied is less than service demanded or the amount of service supplied is greater than the amount of service demanded

marketing channels

set of interdependent organizations that act as teams and operate on trust

key channel functions

1. carrying or holding inventory

2. generating demand

3. distributing products

4. service before or after the sale

5. extending credit

channel intensity

number of channel partners competing for customers

marketing channel audits

• identify targeted segments of end users

• evaluate channel members capabilities to deliver value to target segment

1. describe the types and amount of work being done by each channel member

2. the importance of each member to end user

3. the share of total channel profits each member should reap

gap analysis

gaps in a channel can arise becuase management has not carefully thought about target end-users’ demand for service outputs or cost of running their channel

cost gaps

total cost of performing all channel functions is too high

3 approaches to managing channels

1. exert power

2. build relationships

3. manage conflict

use of power

the ability of one channel member to get another channel member to do something it otherwise would not have done

• power comes when utility is high and/or alternatives are scarce

5 sources of channel power

1. reward power- provide incentives

2. coercive power- power of punishment

3. expert power- special knowledge or expertise

4. legitimate power- legal authority or the norm

5. referent power- prestige via association

6 power bases influence strategies

1. promise: if you do what we wish, we will reward you

2. threat: if you don’t do what we wish, we will punish you

3. legalistic: you do what we wish, because you agreed to

4. request: please do what we wish

5. information exchange: pursue a discussion about the profitable way to run a business without mentioning exactly what we want

6. recommendation: you would be more profitable if you do what we wish

channel relationship quality

commitment, trust, satisfaction

commitment

one organization wants the relationship to continue into the given future

trust

two way communication, a reputation for fair dealing, a long standing, stable relationship, balance power, and combined stakes

• essential to strong relationship

• believe in its integrity and concern for mutual well-being

satisfaction

positive, affective response to economic rewards generated by a channel relationship

• two drivers: absence of dysfunctional conflict and coercion

channel management

motivating and incentivizing members to maximize the common good

continuity expectations

expectation that prospective partners will be doing business for a long time

commitment trust theory

trust leads to commitment

5 phases of relationships in channels

1. awareness

2. exploration

3. expansion

4. commitment

5. decline/dissolution

latent conflict

inevitable collision between channel members that pursue their own separate goals, strive to maintain their autonomy, and compete for limited resources

manifest conflict

expressed visibly through behaviors (i.e. blocking each other’s initiatives or goal achievement, withdrawing support)

functional conflict

implies that members recognize each other’s contributions and understand that their success depends on others, so they can oppose each other without damaging their arrangement

agency theory

competing goals create conflict in a principal-agent relationship

gray markets

Gray marketing is the sale of authorized, branded products
through unauthorized channels

counterfeit products

selling of fake goods/knock-offs, which is illegal around most parts of the world

personnel exchanges

institutional vehicle seek to turn channel members’ focus toward devising solutions rather than engaging in conflict

arbitration

allows third party to make decision, and both
parties agree to honor the final and binding decision

4 approaches to conflict resolution

1. information intensive mechanism: create better means to share information

2. third party mechanism: introduce third parties that are not involved in the channel

3. building relational norms: entail expectations about behavior, shared by all members

4. using incentives: appealing to economic self interests

channel conflict

when behavior by one channel member is in opposition to the wishes of channel counterparts

• not all conflict is bad

• conflict can improve the channel when it is dealt with effectively and appropriately

types of retailers

1. department stores

2. specialty store

3. mail order/catalog

4. convenience store

5. category killer

6. discount store

7. hypermarket

8. warehouse club

hypermarket

food and nonfood items

supermarket

food items

warehouse clubs

large quantities at whole sale price

department stores

wide assortment of products or services

specialty stores

narrow product assortment

convenience stores

mini-version of grocery store

retailing

“shopping”

hyrbid retail channels

combination of online and brick-and-mortar retail

brick and mortar retail channel

physical storefront

online retail channel

online storefront