SUMMARY
MARKETING CHANNEL
MANAGEMEMT
LECTURES & TUTORIALS
,LECTRURE 1 MARKETING CHANNEL MANAGEMENT - SETTING THE SCENE
WHAT IS A MARKETING CHANNEL?
A Marketing Channel can be described as a set of organizations that work together to make goods available for
end users. These end users can be either consumers or business consumers. Moreover, the goods available can
be either FMCG (fast moving consumer goods), consumer durables, industrial products, and services. FMCGs
have a relatively short shelf life compared to the other types of goods that were just summed up.
Note: a customer in marketing channel management is the retailer.
THE SIMPLEST DISTRIBUTION CHANNEL
WHY MARKETING GRADUATES SHOULD BE
KNOWLEDGEABLE ABOUT CHANNEL MANAGEMENT
o Channels are universal, and so are channel
decisions. Behind every product/service are one or
more channels.
o Channels are important in economic terms. The
total sales through channels accounts for 1/3rd of the worldwide GDP.
o Channels can be a source of competitive advantage. It can create entry barriers for possible new
entrants, which give you a competitive advantage.
POWER SHIFT FROM MANUFACTURERS TO RETAILERS
Walmart is currently the biggest company in the world, and it is a retailer. There is a trend
going on for the past couple of years. A power shift is taking place from manufacturers to
retailers. The retailers nowadays are bossing the manufacturers around.
WHICH FORCES FUEL RISING RETAILER POWER?
MERGERS
Many retailers grew bigger because companies merged with each other. This creates an even bigger retailer. The
Ahold Delhaize is an example of this. In the UK a merger between two retailers was also planned but was blocked
because of ant-competitive reasons. The retailer would have been too big to make competition possible.
MULTI-CHANNEL OPERATIONS
Retailers now have not only their general stores, but also in places like gas stations, on airports, etc.
,RETAILERS BECOMING BRANDS: PRIVATE LABELS
Retailers started with creating their own products under a private label. This creates a competition between the
products of the manufacturer and the private label products of the retailers, and creates the situation that the
manufacturer is both in competition with the retailer and wants to work together with the retailer to get their
product on the shelf.
ACCES TO CONSUMER DATA
The retailers are the ones that have the most data available about the consumers are retailers. Manufacturers
also have data available, but less than retailers, which places them in a disadvantage knowledge-wise compared
to retailers.
THE RETAIL APOCALYPSE
But it is not all looking up for retailers, there are dangers for them as well. This is summarized in the idea of the
retail apocalypse. The thing that causes most of this apocalypse is the shift to online. The Corona pandemic sped
up this process, because of brick-and-mortar stores that had to close for a while due to the measures. However,
around 18% of 2020 sales in retail occurred online. Is this really causing this massive onslaught?
Yes, because the apocalypse is not necessarily caused by the
percentage of retail sales moving online, nut by the business
model of Amazon, which is the biggest culprit in the apocalypse.
In the picture to the left, Amazon’s business model in depicted.
Because they have such a big selection, it creates a lower cost
structure for them, which results in lower prices, and thus
creates a better customer experience compared to other (online)
retailers.
THE EVER-GREATER DEMANDS OF THE SHOPPER
Consumers nowadays want everything, right
here, right now, at the lowest cost and have zero
willingness to pay. The consumer 2.0 thus
became quite spoiled. As describes above, Covid-
19 accelerated the process, but is not the cause.
, COURSE OVERVIEW
MARKETING CHANNEL
MANAGEMEMT
LECTURES & TUTORIALS
,LECTRURE 1 MARKETING CHANNEL MANAGEMENT - SETTING THE SCENE
WHAT IS A MARKETING CHANNEL?
A Marketing Channel can be described as a set of organizations that work together to make goods available for
end users. These end users can be either consumers or business consumers. Moreover, the goods available can
be either FMCG (fast moving consumer goods), consumer durables, industrial products, and services. FMCGs
have a relatively short shelf life compared to the other types of goods that were just summed up.
Note: a customer in marketing channel management is the retailer.
THE SIMPLEST DISTRIBUTION CHANNEL
WHY MARKETING GRADUATES SHOULD BE
KNOWLEDGEABLE ABOUT CHANNEL MANAGEMENT
o Channels are universal, and so are channel
decisions. Behind every product/service are one or
more channels.
o Channels are important in economic terms. The
total sales through channels accounts for 1/3rd of the worldwide GDP.
o Channels can be a source of competitive advantage. It can create entry barriers for possible new
entrants, which give you a competitive advantage.
POWER SHIFT FROM MANUFACTURERS TO RETAILERS
Walmart is currently the biggest company in the world, and it is a retailer. There is a trend
going on for the past couple of years. A power shift is taking place from manufacturers to
retailers. The retailers nowadays are bossing the manufacturers around.
WHICH FORCES FUEL RISING RETAILER POWER?
MERGERS
Many retailers grew bigger because companies merged with each other. This creates an even bigger retailer. The
Ahold Delhaize is an example of this. In the UK a merger between two retailers was also planned but was blocked
because of ant-competitive reasons. The retailer would have been too big to make competition possible.
MULTI-CHANNEL OPERATIONS
Retailers now have not only their general stores, but also in places like gas stations, on airports, etc.
,RETAILERS BECOMING BRANDS: PRIVATE LABELS
Retailers started with creating their own products under a private label. This creates a competition between the
products of the manufacturer and the private label products of the retailers, and creates the situation that the
manufacturer is both in competition with the retailer and wants to work together with the retailer to get their
product on the shelf.
ACCES TO CONSUMER DATA
The retailers are the ones that have the most data available about the consumers are retailers. Manufacturers
also have data available, but less than retailers, which places them in a disadvantage knowledge-wise compared
to retailers.
THE RETAIL APOCALYPSE
But it is not all looking up for retailers, there are dangers for them as well. This is summarized in the idea of the
retail apocalypse. The thing that causes most of this apocalypse is the shift to online. The Corona pandemic sped
up this process, because of brick-and-mortar stores that had to close for a while due to the measures. However,
around 18% of 2020 sales in retail occurred online. Is this really causing this massive onslaught?
Yes, because the apocalypse is not necessarily caused by the
percentage of retail sales moving online, nut by the business
model of Amazon, which is the biggest culprit in the apocalypse.
In the picture to the left, Amazon’s business model in depicted.
Because they have such a big selection, it creates a lower cost
structure for them, which results in lower prices, and thus
creates a better customer experience compared to other (online)
retailers.
THE EVER-GREATER DEMANDS OF THE SHOPPER
Consumers nowadays want everything, right
here, right now, at the lowest cost and have zero
willingness to pay. The consumer 2.0 thus
became quite spoiled. As describes above, Covid-
19 accelerated the process, but is not the cause.
, COURSE OVERVIEW
