Description of flows in different marketing flows
Theory of conflicts in marketing channels.
Marketing channels include: distribution, communication and service channels.
Types of conflict & competition
Vertical channel conflict: between different levels within the same channel.
Horizontal channel conflict: between members at the same level within the channel.
Multichannel conflict: when the manufacturer has established two or more channels that compete with each other in selling to the same mkt.
Causes of channel conflict
Goal incompatibility
Unclear roles & rights
Differences in perception
Intermediaries' great dependence on the manufacturer
Managing channel conflict
The most important mechanism is the adoption of superordinate goals. Working closely together might help them eliminate or neutralize the threat.
Exchange of persons between two or more channel levels is useful.
Cooptation is an effort by one organization to win support of the leaders of another organization by including them in advisory councils, boards of directors, etc.
Encouraging joint membership in & between trade associations.
When conflict is chronic, the parties may have to resort to diplomacy, mediation or arbitration.
New marketing paradigms and the future of the marketing tools
Relationship marketing differs from other marketing paradigms in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages. With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels.
Tools: generally, 4P (product, price, place, promotion) has become 4C (consumer, cost, communication, convenience). Important tools are internet and mobile communications: dialogue channels such as e-mail, blogs, social networks, etc.
Main indicators of marketing channels effectiveness
To reach a target market, the marketer uses three kinds of marketing channels. 1) Communication channels 2) distribution channels 3) service channels. Some exmples are:
New customers acquired
Demographic analysis of individuals (potential customers) applying to become customers, and the levels of approval, rejections, and pending numbers.
Status of existing customers
Customer attrition
Turnover (ie, Revenue) generated by segments of the customer population.
Outstanding balances held by segments of customers and terms of payment.
Collection of bad debts within customer relationships.
Profitability of customers by demographic segments and segmentation of customers by profitability.
Many of these customer KPIs are developed and managed with customer relationship management (CRM) software.
Market capacity and market share equations.
Market capacity - the potential volume of sale of goods and services, determined by the size and structure of actually demonstrated or future demand. It characterizes that part of aggregate social wants that is demonstrated in the market, secured by monetary equivalents, and satisfied through buying and selling.
Secondary \ selective demand is the size of the market for a particular brand – (like xdrive.com or idrive.com.)
Secondary demand is more naturally associated with market share
MP=NxPxQ
MP=market potential
N=number of possible buyers
P=average selling price
Q=average consumption (annual, month)
Chain ratio method – the analyst multiplies a base number by a chain of adjusting percentages
Q = (n x a x b) x q x p
The Parfitt & Collins Model
The model views market share as the product of three quantities: the brand’s penetration level, the brand’s repeat purchase rate, and the buying-rate index of repeat purchasers of this brand.
A model for predicting the market share of a new product, based on early panel data sales results
Share = T x R x B where,
T = Projected percentage of triers of the new brand,
R = Projected percentage of those who tried and will repurchase the brand, and
B = Buying-level index of repeat purchase of the new brand, compared with an index of 1.0 for the product class average.