This report is initiated to discuss the various marketing channel strategies for consumer goods. The generic term goods refers to products as well as services. The paper is divided into part A and part B. Part A explains and discusses the general meaning of key concepts of marketing channel selection, and thus builds the foundation for part B. Part B applies the theoretical concepts to a real life company, Omkafe, and its international marketing channel selection process. The reason for choosing Omkafe, a small sized company based in Italy known for its outstanding coffee, is to demonstrate the differences in distribution patterns among countries and how the rise of the Internet and eBusiness has influenced even small companies like Omkafe. Part A concludes that a company can gain a competitive edge in deciding on an effective distributor or agent. Since there is no one right answer on how to effectively manage the flow from the manufacturer through the distribution channel to the ultimate customer, each company has to make its own decision based on its unique market, producer and product factors. Part B then enforces this conclusion, and also emphasizes the fact that even within a company, different marketing channel selections for different market targets are appropriate and necessary.
Table of Contents
- 1 Introduction
- 2 Definition and importance of selecting a marketing channel strategy
- 3 Direct versus indirect distribution channels
- 4 Steps in channel strategy selection
- 4.1 Conventional versus vertical marketing channel
- 4.1.1 Agency theory or conventional channel
- 4.1.2 Relationship management or vertical coordination of channels
- 4.2 Distribution intensity
- 4.2.1 Intensive distribution
- 4.2.2 Selective distribution
- 4.2.3 Exclusive distribution
- 4.3 Factors influencing the channel decision
- 4.3.1 Market factor
- 4.3.2 Producer factor
- 4.3.3 Product factor
- 4.1 Conventional versus vertical marketing channel
- 5 Conclusion
Objectives and Key Themes
This report aims to analyze marketing channel strategies for consumer goods, providing a theoretical framework and applying it to a real-world example. It explores the selection process, considering various channel types and distribution intensity levels. The report also examines the impact of factors such as market conditions, producer capabilities, and product characteristics on channel decisions.
- Marketing channel strategy selection
- Direct versus indirect distribution channels
- Factors influencing channel decisions
- Distribution intensity (intensive, selective, exclusive)
- Application of theoretical concepts to a real-world company (Omkafe)
Chapter Summaries
1 Introduction: This introductory chapter establishes the context for the report by defining marketing channel strategy within the broader marketing mix (product, place, price, promotion). It highlights the significance of channel selection in determining the path goods take from producer to consumer and emphasizes the importance of understanding channel types and distribution intensity before making strategic choices. The chapter sets the stage for a deeper dive into specific channel strategies and influencing factors. It frames the report's objective as providing a basic framework for effective marketing channel decision-making.
2 Definition and importance of selecting a marketing channel strategy: This chapter defines a marketing channel as a vertically aligned group of organizations adding value to a good or service. It connects this concept to Porter's value chain and value system, arguing that a thorough understanding of the entire value system – encompassing suppliers, distributors, and customers – is vital for effective channel strategy selection. This chapter emphasizes the systematic evaluation of a company’s position and power within its value chain system to inform market entry and channel strategy choices. The chapter touches upon different market entry modes and their varying advantages and disadvantages, underlining their dependence on company-specific factors.
3 Direct versus indirect distribution channels: This chapter distinguishes between direct and indirect distribution channels, illustrating the various intermediary roles (wholesalers, retailers, agents) involved in indirect channels. It highlights that the choice between direct and indirect distribution impacts both place and promotional aspects of the marketing strategy. The chapter visually represents common consumer goods distribution channels using a figure. It focuses on consumer goods distribution, providing a clear depiction of each channel's structure and the associated intermediaries.
4 Steps in channel strategy selection: This chapter outlines the three key decisions in developing a channel distribution strategy: determining the type of channel arrangement, deciding on distribution intensity, and selecting the channel configuration. It elaborates on these decisions, implying a step-by-step process of evaluating and selecting appropriate channel strategies. While sub-chapters delve into specific aspects of these decisions, the overarching theme is the process of developing a holistic and effective channel strategy.
Keywords
Marketing channel strategy, distribution channels, direct distribution, indirect distribution, intensive distribution, selective distribution, exclusive distribution, value chain, value system, market entry, consumer goods, marketing mix.
Frequently Asked Questions: Marketing Channel Strategy for Consumer Goods
What is the overall focus of this report?
This report comprehensively analyzes marketing channel strategies for consumer goods. It provides a theoretical framework and applies it to a real-world example, exploring channel selection, various channel types, distribution intensity levels, and the influence of market conditions, producer capabilities, and product characteristics on channel decisions.
What topics are covered in the Table of Contents?
The report covers an introduction, the definition and importance of selecting a marketing channel strategy, a comparison of direct versus indirect distribution channels, steps in channel strategy selection (including conventional vs. vertical marketing channels, distribution intensity, and factors influencing channel decisions), and a conclusion.
What are the key objectives and themes of the report?
The main objectives are to analyze marketing channel strategies, explore the selection process considering different channel types and distribution intensity, and examine how market conditions, producer capabilities, and product characteristics impact channel decisions. Key themes include marketing channel strategy selection, direct vs. indirect distribution, factors influencing channel decisions, distribution intensity (intensive, selective, exclusive), and the application of theoretical concepts to a real-world company.
What are the key takeaways from each chapter?
Chapter 1 (Introduction): Sets the context, defines marketing channel strategy, highlights the importance of channel selection, and establishes the report's objective. Chapter 2 (Definition and Importance): Defines marketing channels, connects them to Porter's value chain, emphasizes systematic evaluation of company position, and touches upon market entry modes. Chapter 3 (Direct vs. Indirect): Distinguishes between direct and indirect channels, illustrates intermediary roles, and highlights the impact on marketing strategy. Chapter 4 (Steps in Channel Strategy Selection): Outlines three key decisions: channel arrangement type, distribution intensity, and channel configuration. It emphasizes a step-by-step process for developing a holistic strategy.
What are the key terms and concepts discussed in the report?
Key terms include marketing channel strategy, distribution channels (direct and indirect), intensive, selective, and exclusive distribution, value chain, value system, market entry, consumer goods, and marketing mix.
What is the structure of the "Steps in Channel Strategy Selection" chapter?
This chapter breaks down the channel strategy selection process into three key decisions: the type of channel arrangement (conventional vs. vertical marketing channels), the level of distribution intensity (intensive, selective, exclusive), and the overall channel configuration. Each decision is explored in detail, considering factors that influence the choices.
How does the report differentiate between direct and indirect distribution channels?
The report clearly distinguishes between direct distribution (producer directly to consumer) and indirect distribution (involving intermediaries like wholesalers and retailers). It illustrates the roles of these intermediaries and how the choice between direct and indirect distribution impacts both the 'place' and 'promotion' aspects of the marketing mix.
What are the different types of distribution intensity discussed?
The report discusses three types of distribution intensity: intensive distribution (product available everywhere), selective distribution (product available in select outlets), and exclusive distribution (product available in only one outlet per geographic area).
What real-world example is used in the report?
The report mentions using Omkafe as a real-world example to apply the theoretical concepts discussed.
- Quote paper
- Dipl. Betriebswirtin, MBA Sandra Burgemeister (Author), 2003, Marketing channel strategy for consumer goods, Munich, GRIN Verlag, https://www.grin.com/document/10571
