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Distribution channel management map notes
Distribution channel management map notes, the knowledge content covers channel operation management, distribution channel system evaluation, distribution channel development trends, etc. I hope it will be helpful to you!
Edited at 2021-10-31 22:03:04
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Distribution channel management map notes
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- Outline
Distribution channel management
Channel operation management
Channel Management Overview
Marketing Channels and Distribution Channels
marketing channels
meaning
Refers to all enterprises and individuals that cooperate to produce, distribute and consume the goods and services of a certain producer, including all enterprises and individuals involved in the production and marketing process of a certain commodity
member
supplier
producer
Middlemen: wholesalers, retailers, agents
Auxiliary providers: such as warehousing, transportation, finance, advertising agencies, etc. that support distribution activities
final consumer
Distribution channel
meaning
Distribution channels refer to a set of interdependent organizations that facilitate the smooth transfer of certain goods and services to consumers (users) for consumption through the market exchange process. Distribution channel members refer to all enterprises and individuals that acquire ownership of such goods or assist in the transfer of ownership during the transfer of goods from producers to consumers.
member
producer
Middlemen: wholesalers, retailers, agents
final consumer
Summarize
Marketing channels include distribution channels, and distribution channels are only a part of marketing channels
Distribution channel management goals and tasks
Target
market share
An indicator that reflects an enterprise's marketing capabilities
Profit amount
It reflects the quality of business operations and is also one of the important indicators of business activities.
sales growth
Basic indicators reflecting the development status of enterprises
Task (omitted)
Propose and formulate distribution goals
Test distribution efficiency
Coordinate channel member relationships and resolve channel conflicts
Promote product sales
Modify and rebuild distribution channels
Construction of distribution channels for different types of commodities
Construction of consumer goods distribution channels
Consumer goods and categories (Depending on consumer shopping habits)
Convenience products
It refers to products that consumers purchase frequently, are unwilling to spend time and energy comparing brands and prices, and hope to buy products anytime and anywhere.
Daily necessities
Refers to products that are low-priced, frequently used and purchased
Such as salt, instant noodles, detergents, drinks, etc.
impulse buy
It refers to a product that consumers decide to buy temporarily when their sense organs such as vision, smell, and hearing are stimulated.
Such as toys, fruits, etc.
emergency items
Refers to products or services purchased by consumers in urgent need
Such as emergency medicines, emergency umbrellas, etc.
Optional items
Refers to products that consumers purchase after comparing the price, quality, style, durability, etc. of the product or service.
Such as household appliances, clothing, beauty and hair products, etc.
Special product
Refers to products with unique characteristics and/or brand logos for which buyers are willing to make special purchasing efforts
Such as special brands and models of cars, clothing, etc.
non-desired goods
Refers to those products that consumers do not know or although they know about them, they will not take the initiative to buy them under normal circumstances.
Such as life insurance, craft ceramics, encyclopedias, etc., as well as new products that have just been launched and that consumers have never heard of, etc.
Common consumer product distribution channel models
Factory direct supply model
Meaning: refers to the channel model in which manufacturers directly supply goods to terminal channels for sales.
advantage
Short channels, quick response to information, timely service, stable prices, adequate promotions, and easy control
shortcoming
Affected by traffic factors, sales blind spots are prone to occur during the establishment process, and management costs are high.
Multiple distribution (agent) model
Meaning: It means that manufacturers choose multiple dealers (agents) when establishing channels to achieve distribution goals by establishing a huge sales network.
advantage
Distribution channels have wide market coverage, strong market penetration, and channel members at all levels have clear responsibilities
shortcoming
There are many channels and links, difficult to manage, and prone to cross-selling and price confusion.
Exclusive distribution (agency) model
Meaning: It refers to a model in which the manufacturer selects only one dealer (agent) in a certain area within a certain period of time, and the dealer (agent) establishes a distribution channel system.
advantage
It is easy for manufacturers to reach a consensus with middlemen, maximize the enthusiasm of middlemen, and the market price is relatively stable.
shortcoming
The right to sell goods is completely handed over to middlemen, and manufacturers have risks in channel control.
Platform sales model
Meaning: It means that the manufacturer takes the sub-packaging factory of the goods as the core, and the sub-packaging factory establishes an operation department, which is responsible for supplying goods to various retail terminals.
advantage
Clear area of responsibility, small service radius, timely delivery, considerate service, stable network, less affected by cross-selling goods
shortcoming
Due to severe restrictions on regional market conditions, delivery must go through the manufacturer directly, requiring more personnel to manage and cooperate.
Construction of distribution channels for industrial products
Industrial product market and its characteristics
Industrial products: refer to products purchased by buyers for the purpose of social reproduction
Characteristics of the industrial products market
Derivativeness of requirements
Demand elasticity is small
Professional purchasing
Large amount purchased at one time
Customer concentration and stability
Industrial product distribution channel design
Mainly short channels with service functions. In practice, corporate industrial product distribution channels are mainly direct sales, and outlets are set up at major sales locations. Agents can also be used to establish sales points or wholesalers can be used for sales.
Construction of distribution channels for service products
Characteristics and classification of service products
Service product characteristics
intangibility
The characteristics and components of service products are often intangible and insubstantial.
inseparability
The production and consumption processes of service products are carried out simultaneously
difference
The components and quality levels of service products change frequently and are difficult to define uniformly.
non-storability
Service products cannot be stored
Non-transferability of title
The production and consumption process of service products does not involve any transfer of ownership of tangible products.
Service product classification
Services for "people"
Body handling services (person must be present)
Services with high customer involvement, such as aviation, hairdressing, surgery, fitness, travel, etc.;
Brain stimulation processing services
Customer awareness must be present during the service process, either onsite or remotely, such as broadcasting, teaching, television services, advertising, management consulting, concerts, etc.;
Services for “things”
Object handling service (object must be present)
The object must be present during the object handling service process, and the customer does not have to be present, such as freight, dry cleaning, home appliance repair, etc.;
Information processing services
Customers are not necessarily required to participate directly. Services can be provided on-site or off-site, such as property insurance, financial services, data transmission, judicial services, accounting and auditing, etc.
Commonly used distribution channel models for service products
direct distribution model
The fundamental reason for adopting this model is the inseparability of service products
Distribution channels established by intermediaries (The most commonly used channel model by service companies)
Channel member management
Channel member selection
Enterprises generally evaluate and select channel members based on length of operation, growth, solvency, cooperative attitude, operation of related products, quality of sales personnel, store location, etc.
Channel member incentives
Communication and motivation
Provide product and technology dynamic information
PR banquet
Exchange market information
Let dealers vent their dissatisfaction
business incentives
Dynamic management of total commission amount
Flexible determination of commission ratio
Schedule dealer meeting
Collaborate on business plans
support and incentives
Implement preferential promotions
Provide advertising allowance
Train sales staff
Financing support
Evaluation and adjustment of channel members (omitted)
Channel power management
Channel rights and their sources
Definition of channel power
Channel power refers to the ability of a specific channel member to control or influence the behavior of another channel member
Sources of channel power
Types of Channel Power Sources
reward rights
Refers to the commitment and ability of channel members (influencers) to reward other channel members (influencers) who comply with their requirements. Also called commitment strategy, the practice of giving benefits to submissive partners
power of coercion
Refers to the ability of influencers in a channel to impose punishment on those affected
statutory authority
It means that the affected person realizes that the influencer has clear power to influence them, and the clear power is formed by a transaction contract or contractual vertical distribution system.
right of recognition
Also known as reference rights, it refers to the impact that a channel member has on another channel member when it uses another channel member's brand or engages in activities that are beneficial to the other party. For example, some circulation companies choose to cooperate with certain well-known manufacturers to improve their market reputation. The selected manufacturer has the right to identify
right to expertise
It means that the affected channel members believe that the influencer has some special knowledge or useful expertise that they do not possess. For example, franchising is a typical channel management method that leases the expertise of a franchisor to build its own business.
right to information
It refers to the ability of channel members to provide certain types of information.
Similarity: Both cannot be withdrawn after being provided. Difference: Expertise rights are the result of long-term experience accumulation or professional training, while information rights are the result of a certain channel member having easy access to certain types of information and knowing more about something.
Distinguishing sources of channel power
Mandatory and non-mandatory powers
Classify the power of coercion into the scope of compulsory power, and classify the remaining other powers into the scope of non-coercive power.
For example: when a retailer threatens to abandon the sale of a certain product of the manufacturer, it uses coercive power; if the retailer promises to increase the sales of a certain product of the manufacturer, it uses non-coercive power.
mediated power and non-mediated power
intermediary power
Including: reward power, coercion power, legal power;
Intermediary power is used when an influencer demonstrates power over a target, that is, the influencer can force the target to acknowledge its power.
disintermediated power
Including: expertise rights, information rights, identity rights and traditional legal rights
Power that does not exist without the awareness of the target object is non-intermediary power.
Use of channel power
commitment strategy
strategy type
If you do what I say, I will reward you
Performance
reward rights
necessary source of power
threat strategy
If you don't do what I say, I will punish you
power of coercion
legal strategy
You have to do what I say because, in a sense, you have agreed to do it
statutory authority
request strategy
Please do what I want
Right of recognition, right of reward, right of coercion
information exchange strategy
Without me having to say what I want, let’s talk about what’s better for my partner
Expertise rights, information rights, reward rights
Suggest strategies
If you do what I say, you will be more profitable
Expertise rights, information rights, reward rights
Maintenance of channel power
Maintaining manufacturer’s channel control
Situations where the producer is in a favorable controlling position
The industry is controlled by a few large players
There are no substitutes for the manufacturer's products
It is important for buyers to obtain products from this manufacturer
Consumers or products are differentiated, and manufacturers can easily complete cost transfers
Vendors can implement forward integration
Maintaining control over intermediary channels
brand
A brand usually consists of elements such as words, marks, symbols, patterns and colors, or a combination of these elements. Brand is a collective concept, including brand name (product name) and brand logo (brand label).
According to different brand ownership, brands are divided into
Manufacturer brand
Also known as national brands, they are brands established and owned by producers, such as Haier, Coca-Cola, etc.;
dealer brand
Also known as private brands, they refer to brands created and owned by dealers themselves, such as Wal-Mart, Wumart, Watsons, etc.
mixed brands
It means that a product has two brands, one belongs to the manufacturer and the other belongs to the dealer.
Most brands currently on the market are manufacturer brands
Channel conflict management
Definition and classification of channel conflicts
Definition of channel conflict
Channel conflict refers to the contradictions and disharmony between channel members due to interest relationships. The essence of channel conflict is the conflict between the interests, behavior and psychology of channel subjects.
Classification of channel conflicts
Divided according to the hierarchical relationship type of channel members
horizontal conflict
Refers to conflicts between middlemen at the same level in the same channel
vertical conflict
Refers to conflicts between members at different levels in the same channel
Multi-channel conflict
Refers to the conflict that occurs between two or more channels when a manufacturer establishes two or more channels to sell products or services to the same market.
Classified according to the relationship between conflict of interest and confrontational behavior
According to the degree of channel conflict
low conflict zone
Moderate conflict zone
high conflict zone
Divided according to the direction of impact of channel conflicts on enterprise development
functional conflict
It refers to channel members using mutual confrontation as a way to eliminate potential and harmful tensions and bad motivations among channel members. By raising and overcoming differences, motivating each other and challenging each other, thereby improving joint performance. For example, the rebate rewards and promotional rewards given by manufacturers to dealers with outstanding performance may have some impact on other dealers. If used effectively, it can have a "catfish effect" and become a driving force for the development of other channel members.
destructive conflict
It refers to a conflict state in which the uneasiness and confrontational motivations among channel members are externalized into confrontational behavior and exceed a certain limit, which has a negative and destructive impact on channel performance levels and channel relationships, such as cross-selling and defaulting on accounts. , channel conflicts caused by counterfeit production and sale.
Causes of channel conflicts
role misalignment
Goal difference
difference of opinion
Difficulty communicating
Differences in decision-making authority
Expectation difference
Scarce resources
Handling channel conflicts
Determine the long-term goals of channel members based on common interests
Encourage all channel members to actively participate in channel activities and related policy formulation processes
Use incentives appropriately
Use people exchange practices to reduce conflicts
Make good use of conflict resolution methods such as negotiation, mediation, arbitration and litigation
Clean up channel members in a timely manner
Distribution channel system assessment
Channel Gap Assessment
The channel gap refers to the gap between the designed channels and the requirements of end consumers when an enterprise designs a channel system, or the gap between the enterprise's actual channel system and the envisioned ideal channel system.
The emergence of channel gaps
Quality perception gap (Gap 1)
gap type
It refers to the company's inability to accurately perceive customers' service expectations.
content
Inaccurate market research and analysis information, inaccurate understanding of the services expected by customers, failure to conduct demand analysis, changes in customer demand information during transmission, etc.
cause
Quality standards gap (Gap 2)
It refers to the gap caused by the inconsistency between the service standards set by service providers and the customer expectations perceived by managers.
The service quality plan lacks effective support from the high-level management system, planning errors or incorrect planning procedures, unclear organizational goals, and low level of plan management.
Service delivery gap (Gap 3)
It refers to the gap caused by the service production and delivery process not being carried out in accordance with the standards set by the enterprise.
Service technology and systems cannot meet the requirements of the standards; service quality standards are too complex and rigid and lack operability; employees do not agree with the standards and therefore do not implement them; service quality standards are incompatible with corporate culture; service operation and management levels are low, etc.
Market communication gap (Gap 4)
This means that the services promised by the company in its marketing are different from the services actually provided by the company.
The market communication plan and the actual service operation are not well integrated, traditional external marketing and service operations are not coordinated, the organization fails to implement the service quality standards in the promotion, and there are over-commitment problems in corporate communication and promotion, etc.
Perceived service gap (Gap 5)
It refers to the situation where the service expected by the customer is inconsistent with the service perceived or actually experienced by the customer. This is the most important gap and is the core of the service quality gap model.
The generation of this gap is related to the aforementioned gap 1, gap 2, gap 3, and gap 4.
Ideas to eliminate channel gaps
Eliminate demand-side gaps
Detailed understanding of customer needs in market segments through market segmentation
Improve related services in a targeted manner based on the causes of demand-side gaps.
By changing the target market and changing service objects, we can achieve a balance between supply and demand service levels.
Eliminate supply-side channel gaps
Change the role of current channel members
Leverage new distribution technologies to reduce costs
Bring in new distribution experts to improve channel operations
Channel gaps caused by changes in channel environment and management constraints
Distribution channel operation performance evaluation
Channel smoothness assessment
Common indicators
Product turnover speed
It refers to the time that goods stay in the channel circulation link.
Payment recovery speed
It is an indicator that reflects the smoothness of channels from a financial perspective, and can be expressed by the sales collection rate.
Sales recovery rate
Sales recovery rate = actual sales received / total sales revenue × 100%
Channel coverage assessment
Common indicators
Market Coverage (Absolute Metric)
Refers to the geographical area covered by the products distributed by the terminals of the distribution network
Formula: Market coverage = sum of sales area of distribution network terminals - sum of overlapping sales areas
Market Coverage (Relative Metric)
It refers to the ratio of the market coverage area of the channel in a certain area to the total market area. The higher the coverage rate, the wider the market the network covers and the fewer blank spots.
Formula: Market coverage = Channel market coverage area/Total market area × 100%
Channel Financial Performance Assessment
Distribution channel cost indicators
Distribution channel expenses
Refers to the amount of various expenses incurred by distribution channels within a certain period of time
Distribution channel expense ratio
It refers to the comparative relationship between distribution channel expenses and product sales within a certain period of time.
Distribution channel expense rate = distribution channel expense amount/channel product sales × 100%
Distribution channel expense rate increase and decrease rate
Distribution channel expense rate increase and decrease rate = Distribution channel expense rate for the current period - Distribution channel expense rate for the previous period
Channel market share
market share
It refers to the proportion of the sales volume (amount) of an enterprise's goods and services to similar goods and services in the market.
Calculation method: 1) Calculated based on the overall market: the sales volume of a company’s goods and services accounts for the proportion of the sales volume of the entire industry 2) Calculated by target market: the proportion of a company’s sales volume in the market it serves 3) Calculation based on the three major competitors: the ratio of a company’s sales volume to the total sales volume of the three largest competitors in the market 4) Calculated by the largest competitor: the ratio of a company’s sales volume to the sales volume of its largest competitor in the market
Channel market share
Channel market share = sales of goods distributed by a certain channel/total sales of the goods in the same period × 100%
Channel Profitability Indicators
Channel sales growth rate = sales growth this year / total sales last year × 100% = (sales this year - sales last year) / total sales last year × 100%
Channel sales profit margin = channel profit/channel product sales × 100%
Channel cost profit margin = channel profit/distribution channel cost × 100%
Asset profit rate = channel profit/channel asset occupation × 100%
Distribution channel development trends
Internet distribution channels
Comparison between online distribution channels and traditional distribution channels
Functional aspects
Internet channels provide a two-way information dissemination model, making communication between producers and consumers more convenient and smoother
Internet channels are a quick way for enterprises to sell goods and provide services. Its role in realizing the transfer of goods ownership is stronger than traditional channels.
Enterprises can not only carry out business activities through online channels, but also provide technical training and after-sales services to users.
Structural aspects
Traditional distribution channels: The structure is linear, embodied as a linear channel with flow direction;
Network distribution channels: The structure is mesh-like, showing a structure centered on the Internet site and diverging to the surroundings.
Cost
The structure of online distribution channels is relatively simple, which greatly reduces circulation links, reduces transaction costs, shortens the sales cycle, and improves the efficiency of marketing activities.
Characteristics of online distribution channels
virtuality
Economy
Convenience
network distribution system
Ordering system
settlement system
Distribution system
Types of online distribution channels
Online direct sales channels
It refers to the distribution channel through which producers sell goods directly to customers through the Internet. For example, corporate official websites or production companies can directly enter Tmall Mall, JD Mall, etc.
Internet indirect distribution channels
concept
It refers to the distribution channel through which producers sell goods to end users through network intermediaries integrated into the Internet.
Common internet middlemen
directory service provider
Comprehensive directory service provider
Search different sites, and then organize the included sites hierarchically, such as Sohu Portal
Commercial directory service provider
It only provides an index to various existing commercial websites, similar to publishers and company directory publishers, such as some Internet store directories.
Professional directory service provider
A website built for a certain professional field or topic
The main revenue of directory service providers comes from the Internet advertising services provided to customers.
Search engine service provider
Mainly provides users with keyword-based search services, such as Baidu search, 360 search engine and other sites
virtual shopping street
Refers to a website that contains links to two or more commercial sites. The income sources of the virtual commercial street include the rent of servers rented by merchants, commission on sales revenue, etc. For example, Sina.com’s virtual commercial street provides specialty store rental services
internet content provider
Products include search engines, virtual communities, e-mails, news and entertainment, etc.
online retailer
One is a pure online retailer, such as Amazon in the United States, Dangdang in China, etc.; the other is a traditional retail enterprise that touches the Internet, such as Wal-Mart in the United States, Haiershun Mall in China, etc.
virtual assessment agency
A number of third-party rating agencies that evaluate online merchants based on pre-established criteria.
Intelligent agent
Provider of services that automatically search and filter required information for consumers in advance based on their preferences and requirements
virtual market
A virtual place for those who want to trade items. The operators of the virtual market charge certain management fees. Online auction sites are a relatively representative virtual market.
Internet statistics agency
Internet financial institution
Channel flattening
Channel flattening concept
"Flat" means wider coverage, and "flat" means more efficient contact between products and customers. "Channel flattening" means that in channel design, the intermediate links between products and customers should be minimized and direct contact between products and customers should be achieved in order to achieve cost advantages and reduce information distortion in intermediate links.
Reasons for channel flattening
The impact of network information technology
The widespread application of network technology in business has largely subverted the economic basis of traditional multi-level, towering structural channels.
The rapid development of network technology has also brought many new marketing operation models to enterprises, such as online direct sales, catalog marketing, etc.
Network information technology has greatly changed the way people obtain and transmit information.
The impact of channel vertical integration (omitted)
The influence of customer demand characteristics
Customers are increasingly demanding personalized products
Increased customer uncertainty and loss of commitment
Consumer “eclecticism”
Flat channel form
Direct channel/absolute flat channel (The most original trading method)
producer-customer
Expression mode
A flat channel with a layer of middlemen
Producer-Middleman-Consumer
Flat channel with two layers of middlemen (The most commonly used and common flat pattern at present)
Manufacturer-Distributor (Agent)-Retailer-Consumer (User)
Channel strategic alliance
Strategic alliances between dealers
The motivation of dealers to establish alliances is to compete with suppliers through the scale advantage and monopoly advantage formed by the alliance to obtain greater profit margins.
Strategic alliances between suppliers
Due to the dynamic nature of changes in external environmental conditions, in fact alliances between suppliers are mostly short-term behaviors driven by certain interests.
Strategic alliances between suppliers and distributors
Its purpose is to improve the effectiveness and efficiency of the entire supply chain through alliances and cooperation between the upstream and downstream of the supply chain, speed up market response, and provide customers with better and more satisfactory services.
floating theme