SUMMARY WEB-CLIPS + LECTURES
MARKETING CHANNEL MANAGEMENT
CONTENTS
Module 1: Setting the scene (lecture) ..................................................................................................................... 2
Module 2: Channel Design (web-clips).................................................................................................................... 3
1. Why go (in)direct? .......................................................................................................................................... 3
2. Third Party Marketplaces (=3P = indirect online channel) .............................................................................. 6
3. Multichannel: the manufacturer’s perspective .............................................................................................. 8
4. Grey Markets .................................................................................................................................................. 9
5. Omnichannel: the retailer’s perspective ...................................................................................................... 10
Module 3: Channel Design (lecture) ..................................................................................................................... 12
Module 4: Partnerships (web-clips) ...................................................................................................................... 14
1. Partnerships: Definition ................................................................................................................................ 14
2. Partnerships: Power...................................................................................................................................... 15
3. Partnerships: Partnerships between unequals ............................................................................................. 16
Module 5: Partnerships (lecture) .......................................................................................................................... 18
Module 6: Assortment & Promotions (web-clips) ................................................................................................ 21
1. Assortment Size ............................................................................................................................................ 21
2. Assortments: Which SKUs to (de)list ............................................................................................................ 23
3. Online Assortments ...................................................................................................................................... 24
4. Category captainship .................................................................................................................................... 25
5. Consumer promotions .................................................................................................................................. 28
6. Trade promotions ......................................................................................................................................... 30
7. EDLP: Everyday Low Pricing .......................................................................................................................... 32
Module 7: Assortment & Promotions (lecture) .................................................................................................... 33
Module 8: Private Labels (web-clips) .................................................................................................................... 36
1. Private Labels: State of affairs ...................................................................................................................... 36
2. How retailers can boost private label success .............................................................................................. 38
3. How brand manufacturers can fight private labels ...................................................................................... 39
Module 9: Private Labels (lecture) ........................................................................................................................ 41
Module 10: Value Disruptors (web-clips).............................................................................................................. 43
1. Hard discounters as value disruptors ........................................................................................................... 43
2. Brand manufacturers’ reactions to hard discounters ................................................................................... 44
3. Conventional retailers’ reactions to hard discounters ................................................................................. 45
Module 11: Value Disruptors (lecture).................................................................................................................. 46
1
, Module 1: Setting the scene (lecture)
▪ Marketing Channel:
o A set of organizations
o that work together (Firms that have a common goal: to get goods to customers)
o to make goods available
▪ FMCG / CPG (“Fast Moving Consumer Goods”; “Consumer Packaged Goods”)
▪ Consumer durables (Distribution channels for furniture, cars)
▪ Industrial products
▪ Services
o for end users
▪ Consumers (=retailer in CPG jargon)
▪ Business consumer
▪ The simplest distribution channel:
B2B B2C
Upstream Downstream
Manufacturer -> Middle Men -> Consumer
= every company that is in End Users
between manufacturers and
consumers
▪ Channels can be a source of competitive advantage: A competitor has to make their own channel. A
promotional campaign can be copied, Coping channel systems is far more difficult.
▪ Power shift from manufacturers to retailer:
Walmarkt, amazon etc. The retailers are now bossing the
manufacturers around (opposite of 1970)
▪ Forces that fuel rising retailer power:
o Mergers: companies that merged. This creates large companies with very large market
shares.
o Multi-channel operations: Retailers is the 70s were simple businesses, they used their shops
to reach customers, single channel operation. They developed multi-channel operations,
multiple contact points, so that increased their market share. Not only Jumbo supermarket,
also Order Online Pick-up in Store.
o Retailers becoming brands: Private Labels
o Access to consumer data: Retailers have access to consumer data via loyalty cards as ‘AH
bonuskaart’.
2
, ▪ The retail apocalypse: retailers are struggling and going bankrupt. There are a lot of empty stores. The
cause of this apocalypse? -> The shift to online, but it is also enforced by the recession, the shift to
experience and the covid pandemic.
o 19.6% of 2021 retail sales happens online. This is not very much since it is causing an
apocalypse?
o The reason is the business models of sellers like
amazon. They sell everything. Customers can find
anything on amazon. Since amazon attracts website
visitors, sellers would want to sell their products on
amazon. Amazon sets lower prices, which makes the
consumer experience better. This is what is causing the
retailing apocalypse. Consumers are getting used to low
prices, a lot of choice, free delivery etc.
▪ The ever-greater demands of the shopper: consumers want
everything, right here, right now, at the lowest cost and zero willingness to pay. They want value,
convenience, the product and information NOW, and the nearest store.
Module 2: Channel Design (web-clips)
1. Why go (in)direct?
▪ INDIRECT CHANNELS
o Independent/third parties Consumers
(Intermediaries, Resellers, Retailers) B&M Retailer
▪ Buy & own products
Consumers
▪ Hold inventory
Manufacturer
▪ Set consumer price
o Physical or digital Consumers
Online
o B&M = Brick & Mortar = Physical stores Retailer
Consumers
▪ DIRECT CHANNELS
o Company-owned
▪ Manufacturer holds inventory
▪ Manufacturer sets consumer price Manufacturer Consumers
o B&M or web store (owned by manufacturer)
o VB: Apple -> Physical stores & website -> Consumers
3
, ▪ Why go direct?
▪ So why don’t all manufacturers go direct?
Manufacturers net total profit = (gross profit margin x sales) – distribution costs
▪ Why go indirect?
o Middlemen may add value:
▪ Bulk breaking: Allow buying in small lots. Unilever sells Bertolli oil, not per bottle, but
in larger quantities to middle men. Middle men do sell these bottles per bottle to
customers.
▪ Assortment convenience: Offer a wide variety of goods. Middle men sell products
from different manufacturers. People don’t only want to buy Bertolli oil, but also
other meal ingredients.
▪ Time convenience: Reduce waiting time.
▪ (They may increase a manufacturers’ sales)
4
MARKETING CHANNEL MANAGEMENT
CONTENTS
Module 1: Setting the scene (lecture) ..................................................................................................................... 2
Module 2: Channel Design (web-clips).................................................................................................................... 3
1. Why go (in)direct? .......................................................................................................................................... 3
2. Third Party Marketplaces (=3P = indirect online channel) .............................................................................. 6
3. Multichannel: the manufacturer’s perspective .............................................................................................. 8
4. Grey Markets .................................................................................................................................................. 9
5. Omnichannel: the retailer’s perspective ...................................................................................................... 10
Module 3: Channel Design (lecture) ..................................................................................................................... 12
Module 4: Partnerships (web-clips) ...................................................................................................................... 14
1. Partnerships: Definition ................................................................................................................................ 14
2. Partnerships: Power...................................................................................................................................... 15
3. Partnerships: Partnerships between unequals ............................................................................................. 16
Module 5: Partnerships (lecture) .......................................................................................................................... 18
Module 6: Assortment & Promotions (web-clips) ................................................................................................ 21
1. Assortment Size ............................................................................................................................................ 21
2. Assortments: Which SKUs to (de)list ............................................................................................................ 23
3. Online Assortments ...................................................................................................................................... 24
4. Category captainship .................................................................................................................................... 25
5. Consumer promotions .................................................................................................................................. 28
6. Trade promotions ......................................................................................................................................... 30
7. EDLP: Everyday Low Pricing .......................................................................................................................... 32
Module 7: Assortment & Promotions (lecture) .................................................................................................... 33
Module 8: Private Labels (web-clips) .................................................................................................................... 36
1. Private Labels: State of affairs ...................................................................................................................... 36
2. How retailers can boost private label success .............................................................................................. 38
3. How brand manufacturers can fight private labels ...................................................................................... 39
Module 9: Private Labels (lecture) ........................................................................................................................ 41
Module 10: Value Disruptors (web-clips).............................................................................................................. 43
1. Hard discounters as value disruptors ........................................................................................................... 43
2. Brand manufacturers’ reactions to hard discounters ................................................................................... 44
3. Conventional retailers’ reactions to hard discounters ................................................................................. 45
Module 11: Value Disruptors (lecture).................................................................................................................. 46
1
, Module 1: Setting the scene (lecture)
▪ Marketing Channel:
o A set of organizations
o that work together (Firms that have a common goal: to get goods to customers)
o to make goods available
▪ FMCG / CPG (“Fast Moving Consumer Goods”; “Consumer Packaged Goods”)
▪ Consumer durables (Distribution channels for furniture, cars)
▪ Industrial products
▪ Services
o for end users
▪ Consumers (=retailer in CPG jargon)
▪ Business consumer
▪ The simplest distribution channel:
B2B B2C
Upstream Downstream
Manufacturer -> Middle Men -> Consumer
= every company that is in End Users
between manufacturers and
consumers
▪ Channels can be a source of competitive advantage: A competitor has to make their own channel. A
promotional campaign can be copied, Coping channel systems is far more difficult.
▪ Power shift from manufacturers to retailer:
Walmarkt, amazon etc. The retailers are now bossing the
manufacturers around (opposite of 1970)
▪ Forces that fuel rising retailer power:
o Mergers: companies that merged. This creates large companies with very large market
shares.
o Multi-channel operations: Retailers is the 70s were simple businesses, they used their shops
to reach customers, single channel operation. They developed multi-channel operations,
multiple contact points, so that increased their market share. Not only Jumbo supermarket,
also Order Online Pick-up in Store.
o Retailers becoming brands: Private Labels
o Access to consumer data: Retailers have access to consumer data via loyalty cards as ‘AH
bonuskaart’.
2
, ▪ The retail apocalypse: retailers are struggling and going bankrupt. There are a lot of empty stores. The
cause of this apocalypse? -> The shift to online, but it is also enforced by the recession, the shift to
experience and the covid pandemic.
o 19.6% of 2021 retail sales happens online. This is not very much since it is causing an
apocalypse?
o The reason is the business models of sellers like
amazon. They sell everything. Customers can find
anything on amazon. Since amazon attracts website
visitors, sellers would want to sell their products on
amazon. Amazon sets lower prices, which makes the
consumer experience better. This is what is causing the
retailing apocalypse. Consumers are getting used to low
prices, a lot of choice, free delivery etc.
▪ The ever-greater demands of the shopper: consumers want
everything, right here, right now, at the lowest cost and zero willingness to pay. They want value,
convenience, the product and information NOW, and the nearest store.
Module 2: Channel Design (web-clips)
1. Why go (in)direct?
▪ INDIRECT CHANNELS
o Independent/third parties Consumers
(Intermediaries, Resellers, Retailers) B&M Retailer
▪ Buy & own products
Consumers
▪ Hold inventory
Manufacturer
▪ Set consumer price
o Physical or digital Consumers
Online
o B&M = Brick & Mortar = Physical stores Retailer
Consumers
▪ DIRECT CHANNELS
o Company-owned
▪ Manufacturer holds inventory
▪ Manufacturer sets consumer price Manufacturer Consumers
o B&M or web store (owned by manufacturer)
o VB: Apple -> Physical stores & website -> Consumers
3
, ▪ Why go direct?
▪ So why don’t all manufacturers go direct?
Manufacturers net total profit = (gross profit margin x sales) – distribution costs
▪ Why go indirect?
o Middlemen may add value:
▪ Bulk breaking: Allow buying in small lots. Unilever sells Bertolli oil, not per bottle, but
in larger quantities to middle men. Middle men do sell these bottles per bottle to
customers.
▪ Assortment convenience: Offer a wide variety of goods. Middle men sell products
from different manufacturers. People don’t only want to buy Bertolli oil, but also
other meal ingredients.
▪ Time convenience: Reduce waiting time.
▪ (They may increase a manufacturers’ sales)
4
