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ĐƠN GIẢN LÀ KHÁC BIỆT
CHAPTER 2: CUSTOMER DEVELOPMENT
TRADE MARKETING
DINH Tien Minh (Ph.D.)
ĐƠN GIẢN LÀ KHÁC BIỆT
OBJECTIVES
1 An understanding of components
of customer development strategy
2 Applying knowledge to practical
situations
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TABLE OF
CONTENTS 1 Channel Development
2 Trade Discount Policy
3 Loyalty Program
4 Customer Events
1 WHAT IS A CHANNEL STRATEGY?
Marketing channel or marketing channel system, defined as a set of
interdependent organizations involved in the process of making a
product or service available for use or consumption.
The set of activities focused on designing and managing a marketing
channel to enhance the firm’s sustainable competitive advantage and
financial performance.
(Robert et al., 2015)
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1 THE IMPORTANCE OF CHANNEL STRATEGY
The channel experience determines
Marketing channels represent a
people’s perceptions of the
significant portion of the world’s
manufacturer’s brand image and
business.
thus end-user satisfaction.
THE IMPORTANCE
OF MARKETING
CHANNEL
STRATEGY
Marketing channel is an important
The channel is a gatekeeper between the
asset in the company’s overall
manufacturer and the end-user.
marketing and positioning strategy.
ĐƠN GIẢN LÀ KHÁC BIỆT
WHO PARTICIPATES
IN MARKETING
CHANNELS?
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1 MANUFACTURERS: UPSTREAM CHANNEL MEMBERS
Manufacturers that brand their products are known by
name to end-users.
Manufacturers that make products but do not invest in a
branded name for them produce private-label products.
The manufacturer need not be the channel captain.
ĐƠN GIẢN LÀ KHÁC BIỆT
1 INTERMEDIARY
Wholesale:
include merchant wholesalers or distributors,
manufacturers’ representatives, agents, and brokers.
Retail intermediaries come in many' forms: department stores,
mass merchandisers, hypermarkets, specialty stores, category'
killers, convenience stores, franchises, buying clubs, warehouse
clubs, cataloguers, and online retailers.
Specialized intermediaries enter the channel to perform
a specific function.
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1 END-USERS: DOWNSTREAM CHANNEL MEMBERS
End-users (either business or individual consumers) are channel
members because they can and frequently do perform channel
functions such as physical possession, ownership, and financing
functions.
ĐƠN GIẢN LÀ KHÁC BIỆT
1 COMBINATIONS OF CHANNEL MEMBERS:
Combinations of Channel Members:
• Channel participants can be combined in many ways to create an
effective marketing channel strategy.
• The range and number of channel members is affected by the
needs of the end-users and manufacturers.
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1 CHANNEL STRATEGY FRAMEWORK
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1 END-USER ANALYSIS: SEGMENTATION AND TARGETING
Segmentation means splitting a market into groups of end-users who
are (1) maximally similar to one another and (2) maximally different
from other groups of end-users.
Service outputs include (but are not limited to) bulk breaking, spatial
convenience, waiting and delivery time, assortment and variety,
customer service, and product/market/usage information sharing.
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1 END-USER ANALYSIS: SEGMENTATION AND TARGETING
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1 CHANNEL ANALYSIS: AUDITING MARKETING CHANNELS
Evaluate the capabilities of each potential channel, in terms of the
key channel functions, to determine how well it is suited to meet the
segment’s service output demands.
Complete the gap analysis template to identify both service gaps
and cost gaps
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1 MAKE-OR-BUY CHANNEL ANALYSIS
Should the firm integrate vertically by performing both
upstream (e.g., manufacturing) and downstream (e.g.,
distribution) functions?
Should a single organization perform all channel functions (i.e.,
manufacturer, agent, distributor, retailer—all rolled into one)?
Should outsourcing apply to either distribution (upstream
looking down) or production (downstream looking up), or both,
such that the identities of manufacturers and downstream
channel members are separate?
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1 DESIGNING CHANNEL STRUCTURES AND STRATEGIES
• The degree of channel intensity
• Mix of channel types/identities
• Use of dual distribution
• Close any service or costs gaps.
• Find an optimal channel structure
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1 BENCHMARKING TRADITIONAL AND EMERGING CHANNEL SYSTEMS
Use existing channel systems as benchmarks, comparing them
against “new” channel designs, which play important roles in
their own right.
Other channel systems can offer important insights that new
designs need to leverage.
Among existing channel systems, the three most notable or well
known are retailing, wholesaling, and franchising.
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1 IMPLEMENTING CHANNEL STRATEGIES
Channel managers must manage five key channel elements to
ensure that the channel system runs smoothly, and all
participants cooperate to optimize it:
• Power
• Conflict
• Relationships
• Policies and legalities
• Logistics
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2 TRADE DISCOUNT POLICY
A trade discount is the amount by which a manufacturer reduces the
retail price of a product when it sells to a reseller, rather than to the end
customer. The reseller then charges the full retail price to its customers in
order to earn a profit on the difference between the amount by which the
manufacturer sold the product to it and the price at which it then sells the
product to the final customer.
(Bragg, 2022)
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3 LOYALTY PROGRAM
95% of customers say trusting a
company increases their
loyalty
(Trends in Customer Trust Report, Salesforce Research)
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3 LOYALTY PROGRAM
1
MORE CUSTOMER REFERRALS
2
HIGHER CUSTOMER RETENTION
MORE SALES
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4
BRAND ADVOCACY
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ĐƠN GIẢN LÀ KHÁC BIỆT
DINH Tien Minh (Ph.D.)
THE END
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