Effective Routes to Market in B2B Marketing
Explore the significance of supply chain management and logistics in B2B marketing, along with reasons for direct and indirect distribution channels. Understand the functions of channel members and different types of intermediaries to enhance your market strategy.
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Presentation Transcript
Business to Business Marketing Chapter 11 Routes to market
Supply chain management the planning and coordination of all activities of parties within a specific supply chain to provide the end customer with a product which adds value Logistics the coordination of activities that contribute to the forward and reverse flow of information, goods and services between the point of origin and point of consumption to satisfy customer needs
Figure 11.1 The circular fashion value chain sustainable resource- efficient fabric manufacture zero waste design fibre manufacture local demand driven distribution and retail sales customised, robotic apparel manufacture garment collection and recycling (adapted from Andersson et al. 2018)
Reasons for direct distribution Customers large & well defined groups of customers who require - direct dealing - large amount of information on product use/features - limited logistics services Sales process involves extensive negotiations & with senior management function needs to be controlled to ensure - correct supply of total package - quick response to market conditions
Reasons for indirect distribution fragmented & widely dispersed markets low risk/uncertainty uniform product offering multiple item & brand purchases in single transaction low value transactions
Functions of channel members reconciling needs improving efficiency improving accessibility providing specialist services
Types of intermediaries Agent avoids personal selling costs for principal earn commission for orders received by principal does not take title to goods brings regional market knowledge established client relationships non-competing product lines
Types of intermediaries Franchisee obtains right from principal company to conduct business in specified manner
Types of intermediaries Distributor takes title of goods responsible for: customer contact product availability repair assembly & simple operations Brennan et al 2007
Figure 11.1 Routes to business markets industrial customer producer industrial customer franchisee producer industrial customer agent producer industrial customer producer distributor industrial customer producer agent distributor
Digitisation and channel functions Information platform secure information instantly list of product specification/features customise features/options link to intermediary/sale rep manage customer relationships Transactional platform provide price quotes, place orders, check availability, offer technical support
Factors affecting channel members and structure availability of intermediaries established channel patterns product characteristics company financial resources competitor strategies customer locations geographic
Dealing with channel members Selection criteria financial and company strengths product factors market skills commitment Brennan et al 2007
Dealing with channel members Support/motivation communication salesforce logistics pricing margins promotion training
Dealing with channel members: conflict Sources Handling and resolution differences in objectives develop partnership approach differences in acceptable costs and rewards training in conflict handling market partitioning differences in desired product lines improve performance use of multiple distribution channels channel ownership coercion inadequate performance
