Channel Levels
The producer and (he final customer are part of every channel. We will use the number of intermediary levels to desiguale the length of a channel. l:igure 15.3(a) ¡ilústrales several cons u m cr-goods marketing ch an neis of di fferen t fcngt hi
A zero-level channel falsn called :t direct-marketing channel) Consists of a matiulac-itirer selling directly to the final customer. The major examples are door*to-door sales, home parties, mall order, telemarketing, TV selling. Internet selling, atid inanufacturer-bwned stores, Avon sales representatives sell cosmetics dour-to-door: Tuppcrware representatives sell kitchen goods through home pari its; Franklin Mint sells collectibles through mail order; AT&T uses lliC telephone to prospect for new customers or to sell enhanced services to existing customers: Time-Life sells music and video collections through TV commercials or longer "infoincrctals"; Hod Envelope sells gifis. online: and Gateway sells computers and oilier consumer electronics through its own stores. "Marketing Insight: M-Commerce Opens Up New Opportunities fur Marketers" describes new developments in that area.
A pJW-fóitíc/iiJjíncíCúrliaillSOilé selling intermediary, such as a retailer. A l'uro-lcüpl Channel contains two intermediaries. In Consumer markets, these are typically a wholesaler and a retailer A three-teivl diwefcontains threeIntermediarios. in the meatpacking industry, wholesalers sel I to jobbers, who sell to small retailers. In Japan, food distribution may involve as many as sis levels. From ihc producer's point of view, oluainitig in format ion about end users and exercising emit ml becomes more difficult as the number of channel levels increases.
I:igtire 15.3(b) Shows channels commonly used in industrial marketing. An industrial-goods manufacturer cam use its sales force to sel! di reel ly to Industrial customers; or it can sell to industrial distributors, who sell to the industrial customers; or it can sell through manufacturer's representativos o' its own sales branches directly to industrial customers, or indirectly i o industrial customers through industrial distributors. Zero-, otic-, and two-level marketing channels are quite common.
\'nriuja;lurcr
Consumer
(a) Consumer Marketing unarm els t-level 2-leuel
Manufacturer
Retailer
Consumer
Mgnulaciurer
Wholesaler
Relailer
Consumer
3-levei
Manu?i::urer
Wholesaler
Jobber
Relailer
Consumer
0-level Manufacturer
Industrial customer
|b| Industrial Mafkeling Channels 1-level 2 teutl
Manufacturer industrial dislriiKilors
Induslrial customer
Uumtoctuw
Mii.nylaclurer's rjiiresenisii^
Industrial customer
3-leuel
Maíwiaciutef
Manufacturer's sales brsrxn
Industrial custarrer
FIG, 15 .3 Consumer j-.u Irslustriji Maifeel ng Chanrels m-commercé opens up new opportunities for marketers
Consumers and businesspeople no longer need to tie "Ear a com-p<uter to send anti receive information. All they need is a celrular plione or personal digital assistant iFDAJ. Wnile tfiey are on Hie iilqve, ttiey can connect witti Ihe Internet to check stock prices, (tie weather, sports scores; send and receive e-mail messages; and place online orders. A whole Held calleo telematics involves plac ng wireless Internet-connected computers in the dashboards of cars and trucks, and making mere home appliances (suctt as computers) wireless so that ttiey can he used anywhere in or near the heme. Many see a big future in what is now Called m-commerce (m for mobile). Consider the lost growth of internel-connected phones.
In Japan, millions ui teenagers carry DoCoMo phones available Irom HIT (Nippon Telephone and Telegraph). They can also use their phone to order goods. Each month, Hie subscriber receives a hill from NTT listing the roomlily subscriber lee, UK usage lee. and li e cost of all ihe transactions. The person cart then pay the bill ¿t the nearest 7-11 store. In the United States, Convergent {formerly ActiveBuddy) creates sol timare applications that conned Instant Messag ug users tu Marketer-created data using conversational language.
The potential market opportunities for location t>aseri services are enormous. Consider some possibilities:
■ Getting a Coke by pointing and rlicki ig the plione at a vending machine. The soWe drops down and an appropriate amount is deducted Irom the owner's bank account.
■ Using lite phone to search tor a nearby nsslamanl that meets the Customer's entered cnleria.
« Walching stock prices while sitting In the restaurant and deciding to place a purchase order, p Clicking the phone to pay the bill for Ihe meaf: the cellular pJwiie replaces ihe credit card.
■ Coming home and ciicking a combinait ui keys on the phone to open (he door.
Some see positive benelits, such as locating people mating emergency 911 calls or checking on the wheteabouls ol one's children late at nig it. Others worry about privacy issues. Wnat il an employer learns thai an employee is being treated lot AIÛS at a I0C3J clinic, cr a wife finds out lier husihand is oui clubbing? Like so many new technology. location-based services have potential for good or harm, am] ultimately win warrant pubic scrutiny anti regulation,
Saumes: Douglas (jmont. Cometvig U\# wnttss tvfricf. Jtw Age ol M-ùmnmce (New Wt Wtey, 2001}; Mare Weiujarton. "the MeAffi is <t* inslaM Message." Bus,less2.0, Fsiimaiy 2002, psk. 98-33.
Channels normally describe a forward movement of products from source io user, one can also talk ahout reivrsc-fltnv channels. They are iiupnrtaru íji the following ca^: (1) to reuse products or containers (such as rdi liable chemical-carrying drums); [2] to refurbish producís (such as circuit boards or computers) for resale: (3) to recycle products (such as paper); and (4) to dispose of products and packaging (waste products). Several intermediaries play a role in reverse-flow channels, including manufacturers' redemption centers, tuinutti-nity groups, traditional intermediaries such as soft-drink intermediaries, trash-collection specialists, recycling centers, trash-recycling brokers, and central-processing;warehousing,'1
hewlett-packard
Each month Hewlett-Packard, the world's second-largest computer maker, sends 1.7 million tons ol broken-down and unwanted electronics to meet 'heir end or their new beginning—at its Foseville, California, recycling cenler. Vet the company, in conjunction with recycling partner Woranda Inc.. still only recycles less than
1 percent of (he hardware it makes. Pressured by complaints about ho« they disposed products—including shipping old machines to be b'&lien down in Asian countries rtitl) less slnci environmental laws—computer makers have joined with the EPA. environmental groups, and a nonprolit group called Product Stewardship Instil u!e. These groups created the National Electronics Product Stewardship Initial iva, but the process of creating a nationwide recycl ng standard is incredibly slow, WJltkpul a syslem in place, dec Ironies makers hke HP and Dell have launched inventive PR campaigns to spur the public to recycle, On Earth Day 2003. at a Starbucks support center in Seattle and the following day in Now York's Grand Central Terminal, HP accepted computer hardware made by any manufacturer and recycled it at no charge. HP also boosted the incentive lor consumers and small businesses to hire HP to recycle old PCs ano monitors through its recycle-by-mail pro-■ g ram, vrhich costs S15 lo £-S6 dependí ng on Hie size of the eq u'p me nt.1;
Continue reading here: Analyzing Customers Desired Service Output Levels
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