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Marketing Channels

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by

Roya DelSol

on 8 November 2013

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Transcript of Marketing Channels

Evaluating Channel Alternatives

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.
Designer
Plastic Supplier
Metal Supplier
Component
Supplier
Warby Parker
Glass
Supplier
Marketing Channels
What is a Channel?
A set of
interdependent organizations

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.
Customer
Need
Customer
Value
Product
Upstream
The set of firms that offer the supplies
needed to

create
the product. This is the part of the supply chain that connects the initial concept to the product.
raw materials
components
parts
information
finances
expertise
Downstream
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
Customer Need:
Corrected Vision
The Product:
Glasses
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
customer value

Designer
Plastic Supplier
Metal Supplier
Component
Supplier
Luxottica
Frame
Pearle Vision
Glass
Supplier
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.
Channel conflict
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.

Price
Place
Promotion
Product

Vertical Marketing System
Multichannel Distribution
“When a single firm sets up two or more marketing channels to reach one or more customer segments.”
Horizontal
Marketing System
Advantages
Disadvantages
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
Producer:
Warby Parker
Charity
Showrooms
Class Trip
In Store
Online
Deintermediation
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
Showrooms
WP Class Trip
Do Good: Buy a pair, Give a pair.
Not for Profits
Trendy Consumers
Goal: to create “stores within stores”

College
Students
Full Experience
All
Customer Experience
Warby Parker uses non-traditional channels
Creates a unique customer experience

Channels:

Online
In Store
Showrooms
WP Class Trip
“Do Good”
Goal: to “bring the showroom to life”
Online
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
Wholesaling
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

Retailing
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
Warby Parker
Pearle Vision
limited service
Amount of service
limited to warby parker brand
Product line
relative prices
Online Retailing
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
Virtual
Try-On!

Analyzing Customer Needs
Setting
Channel
Objectives
Types & Numbers of Intermediaries
Channel Design Decisions

Designer
Plastic Supplier
Metal Supplier
Component
Supplier
Luxottica
Frame
Pearle Vision
Glass
Supplier
Designer
Plastic Supplier
Metal Supplier
Component
Supplier
Warby Parker
Glass
Supplier

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.

Intensive
Distribution
How does their target market behaves?

Selective
Distribution
Exclusive
Distribution
What do they want?
Internet is Warby Parker’s main channel

Social Network
Social Media
Economic Criteria

Only website costs which make possible having a lower price


Control Criteria
They do not have intermediaries, they operate mainly by their one, which make them having control through everything.
Social Media
AGENDA
"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
Full transcript