Marketing

A. Conventional channel:

• loosely aligned, autonomous organizations that carry out a trade relationship

B. Vertical marketing systems:

• tightly organized systems coordinated by ownership of one member, legal agreements, or the power of one membe

1. Logistic function (overcoming distance between provider and customer)
2. Payment function (collection from customer and securing return flows to provider)
3. Range function (presenting the product in a range and integrating the product into a saleable output system, for example if ski boots are integrated into skiing equipment)
4. Acquisition function (acquiring customers through direct contact and reaching as many customers as possible)
5. Experience function and further customer value functions (by designing purchase as an experience and offering other usage components such as the opening of social networks)
6. Service function (delivery and installation or maintenance)

Occurs when product or service producers cut out marketing channel intermediaries or when radically new types of channel intermediaries displace traditional ones.

Advantages direct distribution:

• can be lower in price (get rid of the middleman)
• get direct feedback
• complete controlling about the sales
• Branding

Advantages indirect distribution:

• you dont have much risks
• you dont have to open your own stores
• you reach more customers resp people

Strenght and weaknesses are under the control of the single companies!

the other two can not directly be influenced

be sure u know the pest if not pestel

and the 5 forces from porter

A buyer group is powerful if:

• – there are few buyers
• – it purchases large volumes relative to seller sales
• – the industry’s products are standardized or undifferentiated
• – buyers face few switching costs in changing vendors
• – it is price sensitive
• – buyers can credibly threaten to integrate backward
• – the industry’s product is unimportant to the quality of the buyer’s product or services

--> 10 camels and 5 tourists

A supplier group is powerful if

• – it is dominated by a few companies
• – it is more concentrated than the industry it sells to
• – the industry is not an important customer of the supplier group
• – its product is an important input to the buyer’s business
• – there is no substitute for what the supplier group provides
• – suppliers offer products that are differentiated
• – it has built up switching costs for the buyer
• – the supplier group can credibly threaten to integrate forward into the industry

--> 5 camels and 10 tourists

The intensity of rivalry is greatest if:

• – competitors are numerous or roughly equal in size and power
• – industry growth is slow
• – exit barriers are high
• – fixed costs are high
• – capacity must be expanded in large increments to be efficient (risk of overcapacity)
• – the product is perishable (verderblich)
• – products or services are nearly identical and there are few switching costs for buyers

High entry barriers lead to low threat of new entries

• – Economies of scale
• – Product differentiation
• – Capital requirements
• – Customer switching costs
• – Unequal access to distribution channels
• – Restrictive government policy
• – Cost disadvantages independent of scale

The threat of a substitute is high if

• – it offers an attractive price-performance trade-off to the industry’s product.
• – the buyer’s cost of switching to the substitute is low.

Market capacity is a theoretical maximum size; it indicates the theoretical capacity of a market without regard to prices and purchasing power. Market capacity is a quantity that can change depending on the size of the market base (number of users).