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The environment of marketing channels

The environment of marketing channels . Week2 Instructor: Jungwan Lee. Learning objectives. Understand the impact of environment in a marketing channels context Delineate the major types of competition in the context of marketing channel structure and strategy

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The environment of marketing channels

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  1. The environment of marketing channels Week2 Instructor: Jungwan Lee

  2. Learning objectives • Understand the impact of environment in a marketing channels context • Delineate the major types of competition in the context of marketing channel structure and strategy • Be alerted to rapid changes in technology and how such changes can affect marketing channels

  3. Marketing channel environment • Economic environment • Competitive environment • Sociocultural environment • Technological environment • Legal environment

  4. The economic environment • Recession • Channel members-Substantial reductions in sales volume and profitability • Firms-heavy inventories • Inflation=Consumer Price Index(CPI) • Buy now before the price goes higher • Hold on to your money • Deflation • Difficulties to pass cost induced price increases through the channel • Other economic issues • Huge national debt, the trade deficit, the government budget deficit

  5. The competitive Environment • Types of competition • Horizontal competition • The same types of firms at the same channel • Intertype competition • Different types of firms at the same channel • Vertical competition • Channel members at the different levels • Channel system competition • Complete channel systems as units: corporate, contractual, administered • Competitive structure • Ex) scrambled merchandising

  6. The sociocultural environment • Age patterns of the population • generation Y, N vs. Silver generation • Changing ethnic mix • Minority markets • Educational trends • Higher learning students (12 millions):information, more services • Family or household structure • Smaller families, child-free couples, single • Changing role of women • 80%:30s~40s yrs career oriented women

  7. The technological environment • The Internet and electronic marketing channels • Scanners, computerized inventory management, and portable computers • Universal product code (UPC) • Electronic data interchange (EDI) • Teleshopping, computershopping, and home shopping : Net TV • Other technological innovations • Computer salespeople, strategic alliance

  8. The legal environment • Legislation affecting marketing channels • Legal issues in channel management • Dual distribution: two different channels to his target market • Exclusive dealing: only its products • Full-line forcing:to carry a broad group of its full line products • Price discrimination: books • Price maintenance: supplier’s control the prices • Resale restriction: to stipulate specific geographical market territories • Tying agreements: not to purchase that product from any other supplier • Vertical integration-”Lock up”: firm owns and operates all levels of distribution channel.

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