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Lecture Marketing channel strategy: Chapter 2 - TS. Đinh Tiến Minh
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Learning objectives: Understand the central role played by end-users and their demands in the design of marketing channels, define “service outputs” and identify and analyze them, recognize how to divide a market into channel segments for the purposes of marketing channel design or modification, understand how to target channel segments to optimize sales and profits and other contents. | 1/12/2018 Chapter 2: End-User Analysis: Segmenting and Targeting DINH Tien Minh • LEARNING OBJECTIVES – Understand the central role played by end-users and their demands in the design of marketing channels. – Define “service outputs” and identify and analyze them. – Recognize how to divide a market into channel segments for the purposes of marketing channel design or modification. – Understand how to target channel segments to optimize sales and profits. – Evaluate when and whether to try to meet all expressed service output demands in the short run in a particular market. – Describe the relationship between service output demands and solutions to overall channel design problems. END-USER SEGMENTATION CRITERIA: SERVICE OUTPUTS • These service outputs in turn can be classified into six general categories: – Bulk breaking – Spatial convenience – Waiting or delivery time – Product variety – Customer service – Information sharing 1 1/12/2018 Bulk Breaking • Bulk breaking refers to the end-user’s ability to buy a desired (possibly small) number of units, even if the product or service originally’ was produced in large, batch-production lot sizes. • When the channel system allows end-users to buy’ in small lots, purchases more easily support consumption, reducing the need for end-users to carry unnecessary inventory. Spatial Convenience • Spatial convenience provided by market decentralization in wholesale and/or retail outlets increases consumers’ satisfaction by reducing transportation requirements and search costs. • Business buyers value spatial convenience too Waiting Time • Waiting time is the time that the end-user must wait between ordering and receiving the goods or postsales service. • The longer the waiting time, the more inconvenient it is for the end-user, who must plan or predict consumption levels far in advance. 2 1/12/2018 Product Variety and Assortment • Variety describes generically different classes of goods that constitute the product .