Business and Marketing Management - Assignment Example

Question 1a; describe the best selection criterions you would impose when selecting your channel member. Introduction Channel marketing is the intermediaries in which a product or a service passes through before it reaches the consumers. Kotler (1991) defines a channel of distribution as a group of organizations or individuals who directs the movement of products from the producers to the customers. Credit & financial condition As a channel manager of Wal-Mart, I will have to look for a channel member with sound financial and credit management so that he can easily distribute our products without financial hindrance. Sound credit management will allow member to receive some credit facilities from different financial institutions which is vital in running any business enterprise. At the same time customers and other stakeholders will only have confidence in a company with sound financial and credit management. (Louis, et al, 2006) Sales Strength Louis et al (2006), states that, a channel member will only be effective if customers can easily obtain goods or service from him/her. Consequently, before selecting a channel member I will have to ensure that the channel member can easily be accessed by the prospective customers. The level of distribution and coverage of the channel member will have to be considered to know how effective it is. I will have to note the intensity at which the Wal-mart products can reach its customers; this is a very important aspect to ensure that sales are made. (Louis, et al, 2006) Product Lines, The type of the product will definitely dictate the kind of channel member to recruit. As pertaining the channel member for Wal-Mart supermarket chain, the member will have to be able to stock a large number of various products that the supermarket deals in. at the same time the channel member has to be able handle a large volume of products both perishable and durable. Conclusion Like any other marketing decision, choosing a channel agent require a lot of thoughts and vast research in order to determine who can qualify the distribute the company's products more effectively and efficiently in a way that it will meet the company's sales objectives and overall revenue collection. (Louis, et al, 2006) A company has to consider some major factors before choosing its channel agents which are financial stability, product line and sales strength among others. (Louis, et al, 2006) Question 1b; discuss the concept of leadership The concept of leadership and it's relevance to motivating the channel members. Introduction Leadership is all about motivating people or a group towards achievement of the organizational goals. In this case, it is not just about motivating employees in the organization, but is about motivating channel members. It involves mutual influence between the company and its channel members. Channel members can be influenced through incentives, teamwork, individual dynamics and discipline. The main reason is to channel all the channel members' efforts towards the attainment of the organizations' goals. Leadership behavior in an organization include; directive, supportive, participate and achievement oriented. They are concerned with people feelings and making things pleasant for the followers and defining tasks requirements and other aspects of the work agenda. Kotler (1991) observers that type of leadership adopted will highly influence the relationship between the leader and the followers who are channel members. (Kotler, 1991) In case of channel members' leadership, every channel member is expected to have high degree of interdependence geared towards achievement of complexion of its business objective that it has set. Wal-Mart has stood apart from the channel member by virtue of its position held and helps channel members in clarification of issues, finding solutions, the company is clearly understands the issues and offers possible solutions. These are then formulated and address to relevant authorities for action to taken. This is characteristics of a channel distribution. This will highly motivate channel members and promote their business activities. Wal-Mart has a policy of rewarding it best channel member to encourage others. (Louis, et al, 2006) Conclusion Close working relationship between the main company and channel members also will ensure that good working climate is maintained and also allow efficiency and effectiveness in implementation marketing strategies undertaken by the company and the channel members and foster a good business relationship. Providing opportunities for channel members to exchange ideas on how to achieve and improve their marketing goals this will also motivate the channels members to work more to achieve the set goals. Question 2 a; Define conflict and explain how conflict in a marketing channel will benefit automobile manufacturer Toyota Motor Corporation. Introduction Marketing strategy includes improving quality of products being produce, coming up with different pricing matrix, enhancing distribution channel and other marketing strategies like technology which will give the company a competitive advantage. This marketing competition results in two types of competition which is; objective oriented and conflict oriented. (Louis et al, 2006) Channel conflict Increasing the number of channel members or distributors may increase competition among the channel members creating conflict of interests. This may lead to channel members who feel that the market is not being sensitive to their needs to stop dealing in the company's products. Companies involved in competition may resort to producing more products to offer them cheaply at it customer to increase its sales. Such a move has been undertaken by Toyota Company which has proved to be a big success to the company. However, at times having many channels members may cause conflict of interest as they will compete amongst themselves. This type of competition among companies is which is termed as conflict competition. (Louis, et al, 2006) Objective oriented This type of competition is practiced by a company that wants to drive its competitors of business. The company will carry out various business strategies aimed at giving it a competitive advantage over its competitors. For example, a company may undertake economy pricing. In this case, the company offers its products at for a low price compare to the competitors to attract more customers. Companies will also take other competitive measure like "stealing" technology or professional from its main competitors in order to gain at the expense of its main rivals. (Louis, et al, 2006) Conclusion In order to increase the company's sale, companies in most cases undertake to expand the number of distribution channels to add the number of sellers so that to increase their sales volume. Such marketing decisions need to be undertaken carefully otherwise it can lead to competition among channel members resulting in other channel members collapsing or stopping to sale some products. (Louis et al, 2006) 2b) State and explain the various dimensions used to analyze market; Introduction With the current high competition being witnessed in all industries, companies are increasingly being faced with new challenges to come up with new marketing strategies to measure market dimensions so that the company may be able to succeed in the market. Various dimensions such as Market geography, market size & channel design and market density are used. (Louis et al, 2006) Market Density and Market Geography In terms of the market parameters that exist in relation to Market Density and Market Geography, they are encouraging. The world has a high population of people example in the U.K there is 62 million people of whom majority are middle age bracket. This is the age bracket which mostly purchases cars, or makes decision of buying the cars. Thus, the population provides an already market for the Auto industry. As the population increases the demand of more cars also increases, it is thus projected that the industry market will continue to increase. Alternatively, since the auto industry is a multinational it will access global market which is increasingly expanding. (Louis et al, 2006) Market size & Channel Design It has also been found out that large parameter in terms of demographic highly supports the growth and of an industry, even if new players enter into the market their chances of survival are high when the demographic size is bigger. Studies reveal that, a high population allows large industries to grow rapidly and at the same time allowing small firms to grow proportionally. If you relate this to a country like UK, it is certain the high population in the country is conducive for Auto company growth. (Louis, et al, 2006) Conclusion Various market dimensions are used to measure the market. Market geography has continued to expand for all the industries. Different industries have different market behavior; some markets are very stable while others very fragile the auto industry has stable market behavior. (Louis, et al, 2006) Question 3a; Retail Intermediaries are substantially gaining power Introduction With high cost of production on many products companies strive to reduce this cost, one way of reducing the cost is through cutting distribution costs by having intermediaries who can take the products to the customers more effectively. This is the reason why retail chains have become increasingly more important and successful in marketing channels. Some of the reasons as to why retail intermediaries are becoming more important are; Improved trading efficiency There is some costs that are associated by making a purchase, thus companies try to reduce the number transaction so as to reduce this costs. Without a retailer each buyer will have to negotiate with the producer or the wholesaler which becomes costly on the side of the producer and ineffective. Retailers are specialists Retailers are specialized in specific areas and offers access various resources in ensure correct functioning of distribution channel. This have made them to be highly required by customers hence their increased popularity. (Louis et al, 2006) Louis et al (2006) notes that you can eliminate retails but you can not eliminate their services. Thus, retailers are important and if eliminated, there services have to be shifted to the consumers or to the manufactures. (Louis et al, 2006) Toyota example Toyota Company is one of the most successful companies currently; the success of the company is highly attributed to their rigorous marketing policies that are centered on having many retail outlets that can customers can easily accesses. The retail outlets also offers customer care services, and after sale services such as maintenance, repair and servicing. The retail outlets are also able to offer personalized services to individual customers making customers to feel appreciated and be able to come back for more orders. (Louis et al, 2006) Conclusion Retailers are important in the chain of marketing, they provide important services and there importance has continued to increase. Toyota has been able to succeed in marketing because they have a strong network of retail outlets. (Louis et al, 2006) Question 3b; Competition is inevitable in any marketing channel. Introduction Today, more than ever, it has become increasingly clear that retailers are becoming more significant in the marketing chain than the manufactures themselves. Retailers have elaborate marketing system that is able to compete favorable in this era of high competition. With the current cut throat competition in all industries, retailers with high density customer base have high chances of reaching icustomers and being able to realize sales target. (Louis et al, 2006) In the auto mobile, competition has highly increased over the recent past, many companies are striving to come up with better quality cars. The current market trend competition in the auto mobile on producing high utility and quality cars, enhancing safety, more flexibility and low costs. These are the main aspects in the auto industry. Vertical marketing system also can be found within an organization, where a member in the cannel owns another member, a good example is competition being witnessed in the Nissan company where different departments compete against each other. The good expect bout Nissan Company vertical marketing is that the company can control all the activities and anticipate any changes or problems. (Louis et al, 2006) Retailers and manufactures work together in a vertical marketing system, however, manufacturer have more powers in the system has their have a high control over products in the system. Thus, when retailer efforts of maximizing profits conflicts with the interest of the manufacturer, the manufacturer may decide to excise his powers. Still manufactures use innovative powers to come up with more marketing strategies to ensure that his products are doing well in the market. (Louis et al, 2006) Conclusion The importance of retailers in the product chain have increased in the recent past, and today retailers have become more important than ever making them to have more control over the chain than manufacturer. However, manufacturers' have power of production and they can use this power to control retailers. Nissan Company has a high international competition which is making it more effective. (Louis et al, 2006) Reference: Louis W. S et al, (2006): Marketing Channels', Prentice-Hall, 7th ed. Kotler, P (1991): 'Marketing Management' Prentice-Hall, 7th ed. Read More