Eighth Edition. Global Edition. Marketing Channel Strategy. Robert W. Palmatier. University of Washington's Foster School of Business. Louis W.

Transcription

1 Eighth Edition Global Edition Marketing Channel Strategy Robert W. Palmatier University of Washington's Foster School of Business Louis W. Stern Northwestern University's Kellogg School of Management Adel I. El-Ansary University of North Florida's Coggin College of Business PEARSON Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Säo Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

2 CONTENTS.Veface 79 Aöout the Author 25 ART I Introduction Chapter 1 Understanding Channel Strategies 31 The Importance of Marketing Channel Strategies 31 What Is a Marketing Channel Strategy? 33 Who Participates in Marketing Channels? 33 Manufacturers: Upstream Channel Members 34 Intermediaries: Middle Channel Members 35 End-Users: Downstream Channel Members 36 Combinations of Channel Members 36 Why Do Marketing Channels Exist? 36 Benefits for Downstream Channel Members 36 Benefits to Upstream Channel Members 38 SIDEBAR1-1 Tea seifing in Taiwan: The key rolesof tea intermediaries 41 What Are the Key Functions Marketing Channels Perform? 42 Channel Strategy Framework 44 End-User Analysis: Segmentation andtargeting 46 Channel Analysis: Auditing Marketing Channels 48 Make-or-Buy Channel Analysis 49 Designing Channel Structures and Strategies 49 BenchmarkingTraditional and Emerging Channel Systems 51 Implementing Channel Strategies 52 Take-Aways 54 Endnotes 55 Appendix 56 PART II Designing Channel Strategies Chapter 2 End-User Analysis: Segmenting and Targeting 64 Understanding the Importance of Segmentation 65 SIDEBAR 2-1 CDW and PC purchases by small to medium-sized business buyers 65 End-User Segmentation Criteria: Service Outputs 67 Bulk Breaking 67 Spatial Convenience 68 9

3 10 Contents WaitingTime 68 Product Variety and Assortment 69 Customer Service 70 Information Sharing 71 Segmenting End-Users by Service Outputs 72 Targeting End-User Segments 75 Take-Aways 77 Endnotes 77 Appendix 79 Chapter 3 Channel Analysis: Auditing Marketing Channels 83 Channel Audit Criteria: Channel Functions 84 SIDEBAR 3-1 CDW and PC purchases by small and medium-sized business buyers: Channel functions and equity principle insights 86 SIDEBAR 3-2 Reverse logistics: Channel functions for returned merchandise 90 Auditing Channels Using the EfficiencyTemplate 96 Evaluating Channels:The Equity Principle 100 Evaluating Channels: Zero-Based Channel Concept 101 Auditing Channels Using Gap Analysis 103 Sources of Channel Gaps 103 Service Gaps 105 Cost Gaps 106 Combining Channel Gaps 108 Evaluating Channels: Gap AnalysisTemplate 111 Take-Aways 115 Endnotes 117 Appendix 119 Chapter 4 Make-or-Buy Channel Analysis 125 Trade-Offs of Vertical Integration 127 Degrees ofvertical Integration 127 Costs and Benefits of Make-or-Buy Channels 128 Payment Options for Buying Marketing Channels 129 SIDEBAR 4-1 Vertical integration forward: Härder than it looks 130 Make-or-Buy Channel Options:The Buying Perspective 131 Return on Investment:The Primary Criterion 132 Buying or Outsourcing Channels as the Base Case 132 Six Reasons to Outsource Distribution 133 Make-or-Buy Channel Options:The Making Perspective 136 The Role of Company-Specific Capabilities 137 Six Company-Specific Distribution Capabilities 140

4 Contents SIDEBAR 4-2 Battie of the Greek yoghurts 142 Vertically Integrating to Deal withthin Markets 144 Vertically Integrating to Cope with Environmental Uncertainty 145 Vertically Integrating to Reduce Performance Ambiguity 147 Vertically Integrating to Learn from Customers 148 Channel Members Integrating Upstream 149 SIDEBAR 4-3 A retailer loses focus by integrating backward 149 Summary: Make-or-Buy Decision Framework 150 Take-Aways 151 Endnotes 153 Designing Channel Structures and Strategies 155 Channel Intensity Decisions 157 Downstream Channel Members' Perspective on Intensive Distribution 157 SIDEBAR 5-1 Big Boys Toys 160 Upstream Channel Members' Perspective on Intensive Distribution 161 Channel Competition to Prevent Complacency (Factor 1) 164 Product Category (Factor 2) 165 Brand Strategy: Premium and Niche Positioning (Factor 3) 167 SIDEBAR 5-2 A unique art of expansion 168 Channel Influenae (Factor 4) 170 Dependence Balancing (Factor 5) 173 Opportunity Cost (Factor 6) 175 Transaction Costs (Factor 7) 176 Other Manufacturers' Strategies (Factor 8) 177 ChannelType Decisions 179 SIDEBAR 5-3 Tupperware's retail Channels cannibalize the party 180 Dual Distribution Decisions 181 The Demonstration Argument 182 Carrier-Rider Relationships 183 Closing Channel Gaps 184 Closing Service Gaps 184 Closing Cost Gaps 185 Closing Gaps Produced by Environmental or Manaqerial Bounds 186 Summary: Designing Effective Channel Structures and Strategies 187 Take-Aways 189 Endnotes 190

5 Contents PART III Channel Structures and Strategies Chapter 6 Retailing Structures and Strategies 193 Retail Structures 194 Retail Positioning Strategies 204 Cost-Side Positioning Strategies 204 SIDEBAR 6-1 Zara: A European retailer using the low-margin, high-turnover model of retailing 205 SIDEBAR 6-2 H&M: Another low-margin, high-turnover European retailer, with a different Channel strategy 207 Demand-Side Positioning Strategies 209 Taxonomy of Retail Positioning Strategies 212 Multichannel Retail Strategies 215 Internet Retail Channel 215 Direct Selling Channel 216 Hybrid Retail Channels 219 Adapting to the Increasing Power of Major Retailers 220 Effects of Forward Buying 223 Effects of Slotting Allowances 223 Effects of Failure Fees 224 Effects of Private Branding 224 Effects of Globalization of Retailing 225 Summary: Retailing Structures and Strategies 227 Take-Aways 227 Endnotes 228 Appendix 230 Chapter 7 Wholesaling Structures and Strategies 236 Wholesaling Structures 236 Wholesaler-Distributors 237 Master Distributors 238 Other Supply Chain Participants 240 Wholesaling Strategies 241 An Historical Perspective on Wholesaling Strategy 242 Wholesaling Value-Added Strategies 243 Wholesaling Strategies in Foreign Markets 244 SIDEBAR 7-1 Export trading companies 245 Wholesaling Strategies in Emerging Economies 245 Alliance-Based Wholesaling Strategies 248 SIDEBAR 7-2 Co-operative Group 250 SIDEBAR 7-3 Egypt'sfirstfemalecooperative 252

6 Consolidation Strategies in Wholesaling 253 Adapting totrends in Wholesaling 255 International Expansion 255 Electronic Commerce 255 B2B Online Exchanges 256 Online Reverse Auctions 257 Fee for Services 257 Vertical Integration of Manufactures into Wholesaling 258 Summary: Wholesaling Structures and Strategies 259 Take-Aways 259 Endnotes 260 CtiafiterS Franchising Structures and Strategies 262 Franchising Structures 264 Benefits to Franchisees 264 SIDEBAR 8-1 McDonald's 265 Benefits to Franchisor 269 Another View: Reasons Not to Franchise 274 Franchising Strategies 275 Product andtrade Name Franchising Strategies 275 SIDEBAR 8-2 ADA discovers the benefits of franchisees 275 Business Format Franchising Strategy 276 Franchise Contracting Strategies 276 Company Store Strategies 282 Adapting totrends in Franchising 286 SurvivalTrends 286 Multiunit Franchising 288 Summary: Franchising Structures and Strategies 289 Take-Aways 291 Endnotes 291 Chapter 3 Emerging Channel Structures and Strategies 294 Trends Influencing Marketing Channels 294 Channel Strategies for Services 295 Drivers of the Shift to Services 295 Effect of Key Service Characteristics on Channel Strategies 297 Effects of Product Aspects on Channel Strategies 300 Effects of Acquiring Service Capabilities, Infrastructure, and Knowledge 301 SIDEBAR 9-1 Fujitsu and Federal Express build a close relationship 302 Channel Members' Responses to ServiceTransition Strategies 303 Contents 13

7 14 Contents Channel Strategies for Globalization 303 Drivers of Globalization 304 Effects of Globalization on Channel Strategies 305 Channel Strategies for E-Commerce 309 Drivers of Increased E-Commerce 309 SIDEBAR 9-2 Souq.com, the Arabian e-commerce dream 310 Effects of E-Commerce on Channel Strategies 313 SIDEBAR 9-3 Channel conflict and Internet Commerce 314 Hierarchical Multichannel Strategies 314 Summary: Emerging Channel Structures and Strategies 316 Take-Aways 317 Endnotes 318 PART IV Implementing Channel Strategies Chapter 10 Managing Channel Power 320 The Nature of Power 320 Power Defined 321 Power as atool 322 The Need to Manage Channel Power 323 The Five Sources of Channel Power 324 Reward Power 325 Coercive Power 325 Expert Power 326 SIDEBAR 10-1 Retaiiers build expertise power over suppliers 327 SIDEBAR 10-2 The mystery shopper 328 Legitimate Power 329 Referent Power 331 SIDEBAR 10-3 Patent wars 332 Grouping the Five Power Sources 333 Summary of Power Sources 334 Dependence as the Mirror Image of Power 334 Defining Dependence 334 SIDEBAR 10-4 New market Channels for Malaysian retaiiers 335 Measuring Dependence 336 Balancing Power: A Net Dependence Perspective 338 Imbalanced Dependence 339 Power-Based Influence Strategies 341 Effectiveness of Six Influence Strategies 342 Framing Influence Strategies 344

8 Contents 15 Summary: Managing Channel Power 335 Take-Aways 346 Endnotes 347 Chapter 11 Managing Channel Conflict 350 The Nature of Channel Conflict 350 Types of Conflict 351 Measuring Conflict 352 Consequences of Conflict 353 Functional Conflict: Improving Channel Performance 353 SIDEBAR 11-1 Functions! conflict in plumbing and heating supplies 354 Manifest Conflict: Reducing Channel Performance 355 Major Sources of Conflict in Channels 356 Competing Goals 356 Differing Perceptions of Reality 357 Intrachannel Competition 359 Multiple Channels 359 Unwanted Channels: Gray Markets 363 Minimizing the (Negative) Effects of Channel Conflict 365 Reducing the Use ofthreats 366 Intolerance of Conflict in Balanced Relationships 366 SIDEBAR 11-2 Apple, Hong Kong, and parallel Imports 367 Mitigating the Effects of Conflict in Balanced Relationships 368 Perceived Unfairness: Aggravating the Effects ofconflicts 369 Conflict Resolution Strategies 370 Forestalling ConflictThrough Institutionalization 370 Ongoing Conflict Resolution Styles 372 Using Incentives to Resolve Conflict 374 Summary: Managing Channel Conflict 375 Take-Aways 376 Endnotes 377 Chapter 12 Managing Channel Relationships 381 The Nature of Channel Relationships 381 Upstream Motivesfor Building a Strong Channel Relationship 383 SIDEBAR 12-1 South Africa's MWEB goes Spanish 384 Downstream Motives for Building a Strong Channel Relationship 386 Effectiveness of Strong Channel Relationships 387

9 16 Contents Building Channel Commitment 389 Need for Expectations of Continuity 389 Need for Reciprocation: Mutual Commitment 390 Strategies for Building Commitment 392 Building Channel Trust 394 Need for Economic Satisfaction 395 SIDEBAR 12-2 Philip Morris Substitutes Channels for advertising 396 Strategies for Building Channel Partners'Trust 396 The Channel Relationship Life cycle 400 The Five Stages of a Channel Relationships 400 Managing the Stages 403 ManagingTroubled Relationships 404 Relationship Portfolios 405 Summary: Managing Channel Relationships 406»Take-Aways 407 Endnotes 408 Chapter 13 Managing Channel Policies and Legalities 412 Market Coverage Policies 413 SIDEBAR 13-1 Continental TV v. GTE Sylvania 414 Customer Coverage Policies 416 Pricing Policies 418 Price Maintenance 418 SIDEBAR 13-2 Monsanto v. Spray Rite 419 SIDEBAR 13-3 Business Electronics Corp. v. Sharp Electronics 420 SIDEBAR 13-4 Albrecht v. Herald and State Oil Co, v. Khan 421 Price Discrimination 422 SIDEBAR 13-5 Liggett & Myers v. Brown & Williamson 424 SIDEBAR 13-6 Texaco v. Hasbrouck 429 Product Line Policies 429 Exclusive Dealing 429 SIDEBAR 13-7 Tampa Electric Co. v. Nashville Coal Co. 431 Tying 432 SIDEBAR 13-8 Jafferson Parish Hospital District No. 2 v. Hyde 433 SIDEBAR 13-9 Eastman Kodak Co v. Image Technical Service, Inc. 435 Full-Line Forcing 435 Designated Product Policies 436 SIDEBAR U.S. Föderal Trade Commission v. Toys R US 436 Selection andtermination Policies 437 Ownership Policies 439 Vertical Integration by Merger 439

10 Contents 17 Vertical Integration by Internal Expansion 440 Dual Distribution 440 Summary: Managing Channel Policies and Legalities 441 Take-Aways 442 Endnotes 444 Chapter 14 Managing Channel Logistics 448 Impact of Channel Logistics and Supply Chain Management 448 SIDEBAR 14-1 Reverse logistics 443 Efficient Channel Logistics 450 Efficient Consumer Response 451 Barriers to Efficient Consumer Response 452 Quick Response Logistics 453 Barriers to Quick Response 454 SIDEBAR 14-2 Zara, the quick response master 455 Supply Chain Strategies 457 Physical Efficiency Versus Market Responsiveness 457 Effective Supply Chain Management 458 SIDEBAR 14-3 How to build triple-a supply chains 460 Summary: Managing Channel Logistics 460 Take-Aways 461 Endnotes 462 Name Index 465 Subject Index 472 Company Index 491