Distribution
Internet is a distribution channel. A distribution channel is the system of organizations involved in the process of making a product or service available for consumption or use. Marketing channels therefore allow buyers and sellers to exchange goods and services. Internet- substitute for other forms of communication, changed buyer-seller relationships, changed customer shopping experience, and increased the power of consumers.
Functions of channel intermediaries- 1) efficiency- distribution costs are reduced only if the retailer can perfom the required functions more efficiently than the manufacturers could in the direct channel 2) effectiveness- the ability of the channel to perform functions tht create value for customers.
Disintermediation- 1) a strategy that involves the elimination of a channel intermediary- moving from traditional manufacturer-retailer-consumer 2) internet has become a driving force for disintermediation-high speed and low cost and tighter relationships between buyers and sellers/ more personal 3) overall result is positive bc channel works more closely to create value for customer
Distribution levers — Awareness-# of intermediaries-intenstive distribution via more outlets , # of channels/intermediary types- increasing market coverage and awareness by using different channel types -exploration/expansion- degree of channel integration,-explore relationships, increases customer service level=attractiveness of firm, interaction; # of channels/intermediary type- exploration w/ increasing channels, value of product is inhanced. commitment- degree of channel integration, intermediary type, # of channels, intermediary functions and responsibilies dissolution- elimination of channel types, reduction in the # of intemidiaries, reduction of channel integration.