Managing variable channel systems

Managing multi channel systems

• Learning the practical differences between

intensive and unique distribution

• Look at distinct forms of ‘RTM Networks'

• Understand the benefits and troubles associated with RTM networks

• How multiple RTMs could be used

• Recognise the relevance of the law after channel control

• Know how ‘grey markets' develop within the law and what the significance aof these are for manufacturer

owners.

Background factors

• New rules – suffering exclusivity in RTMs

• Brands seek out new products, fresh markets,

new distribution

• Dynamism of retail – new formats and techniques for

retailing – decline with the traditional

• Growing selection of consumer and shopper

requirements

• Durchmischung of IT/mobile – new ways of searching

Legislative context

In the EU and elsewhere …

Liberalisation of markets

Wish to see intra-brand competition

FOR INSTANCE Opposition to forms of ‘exclusivity'

And to devices that ‘tie up' syndication

A reminder

• Intensive syndication

• Selective distribution – the brand owner HAS TO

specify criteria which might be required by the brand

• Exclusive circulation – a territory is given to the

distributor

• Items often are most often selective – but this

may be by default

Some goods have a window of exclusivity

• Intended since mass goods

• For example Schweppes (part of Cocaina Cola) – adult smooth

drinks market

• 23 days in Asda before wider distribution

• And, in this case, before advertising

• In that case are intensively distributed

In practice – for a lot of products

• A ‘product life cycle' tends to ever more intensive distribution (you actually hope! )

• For example Glaxo Jones Klein – Maxi Nutrition

• http://www.maxinutrition.com/index

• Expanding distribution Can be associated with manufacturer

extensions – eg RTD

• It ought to be associated with new consumer portions

• This probably will effect on brand graphic and possibly % gross income

• Although that may be off-set by regarding sales and efficiency gains

Intensive distribution

• Shops have limited investment inside the

product

• Resellers possess lots of other available choices

• You will have intra-brand competition

• Issue over functional and operate issues

• Both may possibly ‘test' their very own relative electric power

For example …. Tesco

• March 2015 de-stocked 25 Schweppes (CCE)

lines

• 2013 – de-stocked seventy five Princes lines

• 2011 – de-stocked 25% of premium food lines

(cost £10 million)

Conflict in a channel within an intensive

system

• Curve of passions and targets

• Divergent role objectives

• Divergent perceptions

• Can be ‘played out' – simply who needs who also

more

55%

45%

four. 3%

twelve distributors

on the lookout for. 6%

17. 6%

eight. 2%

12-15. 1%

Toys R All of us

Argos

Index

(Littlewoods)

Woolworths

Early Learning

Centre

Independents

(Figures obtained from OFT enquiry)

Can you minimize which resellers you will work

with?

A ‘product life cycle' tends towards ever more extensive distribution (you actually hope! ) Eg Glaxo Smith Klein – Maxi Nutrition

http://www.maxinutrition.com/index

Expanding division MAY be linked to brand exts – for example RTD It SHOULD be associated with fresh consumer sectors

It will definately impact on company image and possibly % low profit Nevertheless that may be off-set by regarding sales and efficiency benefits

• What if poundland desire to sell maxinutrition?

• Selective systems

• The criteria need to be defined – they have to

always be reasonable pertaining to the brand requirements.

• ANYONE who matches the standards has to be

allowed to sell the brand name

But , just how distinct or perhaps confused are the channels in practice? Are some stations ‘free-riding' in others

APPLE

Premium resellers

Big Expense

In store branding (£100, 000)

Higher margins

Better delivery system

Restrictions on additional products

Common resellers

Multiple channels and conflict may be caused

by horizontal backlinks

• Divergence of hobbies and targets

• Divergent role anticipations

• Divergent...

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