Exam: Always jus.fy your answer.
Marke.ng Channel Management
Interac.ve lecture 1 - Intro
Marke&ng channel is the place = ge2ng the product to consumers.
- Involves rela&ons between (brand) manufacturers and (retail) intermediaries, bit it’s
complicated and ever changing.
Marke.ng Channel = path to the consumer, the defini3on of marke&ng channel is vague because it
can be anything:
• A set of organiza3ons
• That work together.
• To make good available
o Fast Moving Consumers Goods (FMCG) / Consumer Packaged Goods (CPG)
o Consumer durables
o Industrial products
o Services
• For end users
o Consumers
o Business consumers
The single largest company in the world (in terms of sales) = Walmart
Nestle is the biggest
manufactures but is small
compared to the resellers
such as Alibaba and
Walmart.
Access to consumers = power
Power shiL from manufactures to retailers.
, Something
is going
wrong with
retailers, all
of them are
having a
hard &me.
The % of retail sales occurring online (% of sales through e-commerce) = worldwide +/- 19%, in China
this is 47%, UK 30,6% and in Canada 11.7%. The east is by far leading the retail sales online.
It is the reason why brick and mortar has collapsed, but brick and mortar will never die, it is only
changing the game.
What is the crucial element of the business model? =
Selec&on is most important, ones this is in place a mo&on is
star&ng.
The we create endless aisles the more we become unbreakable.
,Modus operandi = vorm van werkwijze:
• Price
o Pricing algorithm compares the lowest prices across the retail sector for par3cular
products – including those retailers selling in bulk and where memberships costs are
needed (such as Costco).
o Moving towards individual pricing
• Fulfillment (= ge2ng the products to you):
o Network of Distribu3on centers (DSs)
o Prime Subscrip3on guarantees free 2-day delivery (or used to…)
à The end-result = unsustainable cost structure. The last mile issue = ge2ng your product to your
front door is really expensive.
Is Etail Unsustainable? =
Consumers want everything simple, fric3onless and fast. Do they get that?
à
Cost: Delivery & fulfilment is leading to unsustainable costs.
à
Fulfillment & Delivery = Online’s Achilles heel
à
The store to the rescue Cu\ng cost & Adding Convenience
Walmart sees its store estate as key for successful e-commerce fulfilment.
à It’s 3me to leverage our size and global footprint to take advantage of this
evolving customer trend.
, Networks of stores to act as ‘Distribu3on Centers’ (DCs)
• Store personnel pulls form assortment.
• Allows for faster delivery.
• Allows for instore pick up & returns.
Stores as a strategic asset à Mini DC’s for online orders à Need new traffic drivers
Rethinking the drivers of store traffic
Customers – especially younger ones – say they actually prefer physical stores for browsing and
experiencing products.
E-commerce hasn’t killed physical retail and it’s made it more important than ever.
Routes to consumers, there are many ways to go to the market:
Control of the Shelf
SKU ra3onaliza3on is a key priority for the world’s leading retailers:
• Walmart
o Reducing overall assortment by 30% in UK. In the US, cut inventories by 7.6% while
increasing sales by 1.1%. However, added 300 items back aLer discon3nuing them.
• Groupecarrefour
o Aims to have 15% fewer items per category.
Marke.ng Channel Management
Interac.ve lecture 1 - Intro
Marke&ng channel is the place = ge2ng the product to consumers.
- Involves rela&ons between (brand) manufacturers and (retail) intermediaries, bit it’s
complicated and ever changing.
Marke.ng Channel = path to the consumer, the defini3on of marke&ng channel is vague because it
can be anything:
• A set of organiza3ons
• That work together.
• To make good available
o Fast Moving Consumers Goods (FMCG) / Consumer Packaged Goods (CPG)
o Consumer durables
o Industrial products
o Services
• For end users
o Consumers
o Business consumers
The single largest company in the world (in terms of sales) = Walmart
Nestle is the biggest
manufactures but is small
compared to the resellers
such as Alibaba and
Walmart.
Access to consumers = power
Power shiL from manufactures to retailers.
, Something
is going
wrong with
retailers, all
of them are
having a
hard &me.
The % of retail sales occurring online (% of sales through e-commerce) = worldwide +/- 19%, in China
this is 47%, UK 30,6% and in Canada 11.7%. The east is by far leading the retail sales online.
It is the reason why brick and mortar has collapsed, but brick and mortar will never die, it is only
changing the game.
What is the crucial element of the business model? =
Selec&on is most important, ones this is in place a mo&on is
star&ng.
The we create endless aisles the more we become unbreakable.
,Modus operandi = vorm van werkwijze:
• Price
o Pricing algorithm compares the lowest prices across the retail sector for par3cular
products – including those retailers selling in bulk and where memberships costs are
needed (such as Costco).
o Moving towards individual pricing
• Fulfillment (= ge2ng the products to you):
o Network of Distribu3on centers (DSs)
o Prime Subscrip3on guarantees free 2-day delivery (or used to…)
à The end-result = unsustainable cost structure. The last mile issue = ge2ng your product to your
front door is really expensive.
Is Etail Unsustainable? =
Consumers want everything simple, fric3onless and fast. Do they get that?
à
Cost: Delivery & fulfilment is leading to unsustainable costs.
à
Fulfillment & Delivery = Online’s Achilles heel
à
The store to the rescue Cu\ng cost & Adding Convenience
Walmart sees its store estate as key for successful e-commerce fulfilment.
à It’s 3me to leverage our size and global footprint to take advantage of this
evolving customer trend.
, Networks of stores to act as ‘Distribu3on Centers’ (DCs)
• Store personnel pulls form assortment.
• Allows for faster delivery.
• Allows for instore pick up & returns.
Stores as a strategic asset à Mini DC’s for online orders à Need new traffic drivers
Rethinking the drivers of store traffic
Customers – especially younger ones – say they actually prefer physical stores for browsing and
experiencing products.
E-commerce hasn’t killed physical retail and it’s made it more important than ever.
Routes to consumers, there are many ways to go to the market:
Control of the Shelf
SKU ra3onaliza3on is a key priority for the world’s leading retailers:
• Walmart
o Reducing overall assortment by 30% in UK. In the US, cut inventories by 7.6% while
increasing sales by 1.1%. However, added 300 items back aLer discon3nuing them.
• Groupecarrefour
o Aims to have 15% fewer items per category.
