3. Introduction..
• Firms are increasingly paying greater attention to how they
manage their marketing channels, so that products and
services are delivered at the right time, right place and the
right price.
• The new forms of marketing channels have evolved based
on robust partnerships, with long-term commitment to each
other and the customer.
4. VMS (Vertical Marketing System)..
• Main members of a distribution channel - producer,
wholesaler, and retailer work together as a unified
group in order to meet consumer needs.
5. VMS (Vertical Marketing System)..
•Combines successive
stages of production
and distribution under
single ownership in
order to establish
channel leadership.
9. Administered VMS
• Coordinates successive stages of production and
distribution, not through common ownership or
contractual ties, but through the size and power of
one of the parties
10. Dominant Channel Member Manufacturer
• Companies like General Electric, Procter & Gamble,
and kraft can command unusual cooperation from
resellers regarding displays, shelf space, promotions,
and price policies.
11. Dominant Channel Member Retailer
• Large retailers such as Wal-Mart, Home Depot, and
Barnes & Noble can exert strong influence on the
manufacturers that supply the products they sell.
12. Contractual VMS..
• Independent firms at different levels of production
and distribution join together through contracts to
obtain more economies or sales impact than they
could achieve alone.
14. Wholesaler Sponsored Voluntary Chains
• Wholesalers organize voluntary chains of
independent retailers to help them compete with
large chain organizations
19. Manufacturer Sponsored Wholesale Franchise
• Coca-Cola licenses bottlers (wholesalers) in various
markets who buy Coca-Cola syrup concentrate and then
bottle and sell the finished product to retailers in local
markets.
20. Service Firm Sponsored Retail Franchise
• A system of service product delivery in which an organisation
producing a service (eg. car rental, restaurants, financial
services, etc.) sets up a number of independently-owned
franchised outlets in locations convenient to its customers.
21. VMS (Vertical Marketing System)..
• Advantages :
• Greater control over system
• Elimination of duplication
• Elimination of conflict
22. VMS (Vertical Marketing System)..
• Disadvantages :
• Employees at the bottom of a vertical structure may feel
less valued than those higher up in the chain.
• Some employees may not relish the accompanying
culture of politics, which places heavy emphasis on
pleasing the boss.
• Take a great deal of time for top management decisions
to filter down through multiple layers, reducing the
organization's ability to react quickly to a rapidly
changing business climate.
• Because of the centralized control of power, weak
leadership at the top can hamper the effectiveness of
the entire organization.
23. HMS (Horizontal Marketing System)..
• Horizontal Marketing System is a set up where 2 or
more unrelated companies put together resources
or programs to exploit an emerging market
opportunity
24. Mergers..
• A transaction where two firms agree to integrate
their operations on a relatively co-equal basis
because they have resources and capabilities that
together may create a stronger competitive
advantage.
28. Acquisitions..
• A transaction where one firms buys another firm
with the intent of more effectively using a core
competence by making the acquired firm a
subsidiary within its portfolio of business
29. Tata Steel..
• In October 2006, Tata Steels acquired Corus with
an outstanding price of $12.98 billion.
30. Bharti Airtel..
• In February, 2010, Bharti Airtel added 180 million
new customers in its list by acquiring an African
Mobile Network provider called Zain Africa. This
acquisition took place against an amount of $10.7
billion.
31. Google Motorola
• On August 15, Google announced an agreement to
acquire Motorola Mobility, based in Libertyville,
Illinois, for $40 per share.
So urce -http: //www. g o o g le . co m/pre ss/mo to ro la/
33. ONGC..
• ONGC acquisition of Russia based Imperial Energy
for $2.8 billion. This marked the turn around of
India’s hunt for natural reserves to compete with
China.
34. Strategic Alliances ..
• An agreement between two or more parties to
pursue a set of agreed upon objectives needed
while remaining independent organizations
37. Nokia Windows Mobiles
• On 11 February 2011,a new strategic alliance with
Microsoft announced (Till August 2013)
• Replacement of Symbian and the MeeGo project
with Microsoft's Windows Phone operating system
38. Joint Ventures..
• Business agreement in which the parties agree to
develop, for a finite time, a new entity and new
assets by contributing equity.
• They exercise control over the enterprise and
consequently share revenues, expenses and assets.
41. TATA SIA..
• Tata Sons, Singapore Airlines joint venture orders
Airbus A320s
• TATA SIA Airlines will start flying in the full service
segment in the second half of 2014
43. HMS (Horizontal Marketing System)..
• Advantages :
• Employees may attain greater satisfaction due to
greater freedom and autonomy.
• Keeps the organization ahead of the competition
• Streamlined communications and reporting
processes making the organization more nimble
and adaptable to change.
44. HMS (Horizontal Marketing System)..
• Disadvantages :
• The decentralized structure could lead to a "loose
ship”.
• A resulting lack of control can lead to fingerpointing when things go awry, which can hinder
productivity
• Organizations attempting to convert from a vertical
to a horizontal structure can face challenges, as
management needs to adjust to a less authoritarian
and a more peer-like relationship with
subordinates.
45. “The greatest change in corporate culture and the
way business is being conducted , m be the
ay
accelerating growth of relationships based not on
ownership, but on partnership.”
-P
eter
FDrucker
“S
uccessful business strategy is about actively shaping the gam you play, not just
e
playing the gam you find.”
e
-Adam B
randenburger & B
arry Nalebuff