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Transcript of Marketing Channels
Consists of producers, wholesalers and retailers acting under one unified system, where one channel member owns the others or has so much power that the others are forced to co-operate.
There are three types; corporate, contractual and administered.
What is a Channel?
A set of
that help make a product or service available for use or consumption by the consumer or business user.
What is a Supply Chain?
Also known as the "demand chain", a supply chain is a
set of relationships
between the company's suppliers and resellers . It consists of consists of two main components.
What is a Value Delivery Network?
The network made up of the company suppliers distributors & ultimately customers who “partner” with each other to improve the performance of the entire system in delivering customer value.
The set of firms that offer the supplies
the product. This is the part of the supply chain that connects the initial concept to the product.
Usually the focus within a marketing context, the Downstream component (also known as the marketing channel or distribution channel) is the side of the supply chain that connects the product to the customer -- consisting mainly of
retailing and wholesaling
Marketing Channels: A Case Study
What is Warby Parker?
Warby Parker is an online company that aims "to create boutique-quality, classically crafted eyewear at a revolutionary price point." We'll be focusing on WP's unique structure to demonstrate the power of channels to transform the consumer experience.
Importance of Supply Networks
Includes all partners involved in transforming natural resources and raw materials into a finished product
Upstream network allows for a company to add
Every member of a channel relies on its fellow members in order to achieve overall and personal goals.
A firm’s individual success is dependent upon the channel success.
can occur between channel members -- it is important that it is dealt with quickly and efficiently as conflict can disrupt a channel’s effectiveness.
How Big is the Difference?
This is What Customer Value Looks Like.
Importance of Market Channels
Function to bridge the gap between the producer of a product and the consumer.
Channel decisions can lead to competitive advantages.
Intermediaries in the channel should provide services that the company cannot accomplish on its own.
Market Channel Influence
Channel decisions made by a company have
a significant effect on the marketing mix.
Vertical Marketing System
“When a single firm sets up two or more marketing channels to reach one or more customer segments.”
When two or more companies at one level join together to follow a new marketing opportunity.
Can expand its sales and services to the specific needs of diverse customer segments.
Harder to control + increased conflict
More channels = more competition
Warby Parker Showroom: Oklahoma City
As a smaller company, Warby Parker’s multichannel distribution system is unique compared to large companies.
Multichannel Distribution System
The cutting out of intermediaries and going directly to the final buyer or when new types of intermediaries emerge pushing out traditional ones.
In Store: Various Stores across the US
WP Class Trip
Do Good: Buy a pair, Give a pair.
Not for Profits
Goal: to create “stores within stores”
Warby Parker uses non-traditional channels
Creates a unique customer experience
WP Class Trip
Goal: to “bring the showroom to life”
DHL Express is used to deliver all products
Canada is a 10$ flat shipping rate
International "package forwarding services"
Warby Parker partners with charities.
Retailing & Wholesaling
Nationally: Vision Spring
Internationally: Invisible Children
Includes all activities involved in selling goods and services to those buying for resale or business use
Wholesalers buy mostly from producers and sell mostly to retailers, business customers, and other wholesalers
Save consumers’ money by breaking bulk – breaking large lots into small quantities
Absorb risks of suppliers and consumers by taking title and bearing the cost of theft, damage, spoilage and obsolescence
All activities involved in selling goods or services directly to the final consumer
Connects brands to consumers
Types of retailers are classified in terms of:
amount of service they offer
breadth and depth of their product lines
relative prices they charge
how they are organized
Wheel of Retailing
Amount of service
limited to warby parker brand
Becoming increasingly more relevant
Warby Parker has a retailing edge when it comes to retail technology
The virtual try-on service
Brings the glasses store to the home of the consumer
Analyzing Customer Needs
Types & Numbers of Intermediaries
Channel Design Decisions
Who is Warby Parker’s target market?
Right now WP's target market are men and women between 18-34 who want designer style glasses but not at premium price.
How does their target market behaves?
What do they want?
Internet is Warby Parker’s main channel
Only website costs which make possible having a lower price
They do not have intermediaries, they operate mainly by their one, which make them having control through everything.
"Introduction" by Roya
"Suppliers (Upstream)" by Warren
"Channel Behaviour & Organization" by Mackenzie
"Multichannel Distribution Systems" by Lizzie
"Channel Design Decisions" by Miguel & Miguel
"Retailing & Wholesaling" by Jane
Channel Behaviour & Organization