Ch. 9 Stewarding Multiple Channels

1. Ch. 9Stewarding Multiple Channels • Meaning of Multiple Channels • The Underlying Reasons • Market Maturation • Sales Growth Goals • Evolution of Customer Demand • Availability of Internet

2. Ch. 9Stewarding Multiple Channels III. Coordinating Multiple Channels 1. Set Product Boundaries 2. Set Market (Customer) Boundaries 3. Promote Price Convergence 4. Compensate for Cost Difference

3. Ch. 9Stewarding Multiple Channels • IV. Channel Raiding and Cisco’s Responses • 1. Construct Penalties or Incentives • 2. Rationalize Distribution Intensity • V. Organizing for Multiple Channels • Key: Know why you need multiple channels • Coordination between internal sales force and independent distributors  Delegate Channel Control

4. Ch. 10Internet as a Marketing Channel • Initial Impetus: (Transaction) Cost Savings • cf) Benefit Enhancement • II. How and Where the Internet Works • 1. Supplier side: Concentrated vs. Fragmented • 2. Customer side: Concentrated vs. Fragmented

5. Ch. 10Internet as a Marketing Channel Seller’s Agent (Customer Aggregator) Fragmented Customers Concentrated Buyer’s Agent (product aggregator) Directed Channels Concentrated Fragmented Suppliers

6. Ch. 10Internet as a Marketing Channel • Directed Channel: Provides additional utility • (cost savings) to the same group of customers • II. Seller’s Agent: Few, large suppliers serve • Fragmented customers ex) Surplus Auction • III. Market Maker: Many sellers meet many buyers • Ex) E-bay • IV. Buyer’s Agent: Fragmented suppliers sell to few, • large buyers

7. Ch. 10Internet as a Marketing Channel • III. Three Myopias on Internet Channel • View the Internet solely as a way to squeeze • out channel costs. Ex) Online grocery shopping • 2. See the Internet as an unbounded opportunity • To expand revenues. Ex) Air travel channel • 3. Generate revenue based on Internet’s ability • To overcome information asymmetry. • Ex) Car buying information by Autobytel