Managing multi channel systems
Managing multi channel systems
• Understanding the practical differences between intensive and exclusive distribution
• Look at different forms of ‘RTM Networks’
• Understand the benefits and difficulties associated with
RTM networks
• How multiple RTMs might be used
• Recognise the relevance of the law upon channel control
• Understand how ‘grey markets’ develop within the law and what the implications aof these are for brand owners. Background factors
• New norms – declining exclusivity in RTMs
• Brands search for new products, new markets, new distribution
• Dynamism of retail – new formats and ways of retailing – decline of the traditional
• Growing variety of consumer and shopper needs • Diffusion of IT/mobile – new ways of shopping
Legislative context
•
•
•
•
•
In the EU and elsewhere …
Liberalisation of markets
Wish to see intra-brand competition
IE Opposition to forms of ‘exclusivity’
And to systems that ‘tie up’ distribution
A reminder
• Intensive distribution
• Selective distribution – the brand owner HAS TO specify criteria that are required by the brand
• Exclusive distribution – a territory is given to the distributor • Products often seem to be selective – but this may be by default
Some products have a window of exclusivity
• Intended as mass products
• Eg Schweppes (part of Coca Cola) – adult soft drinks market
• 3 weeks in Asda before wider distribution
• And, in this case, before advertising
• Then are intensively distributed
In practice – for a lot of products
• A ‘product life cycle’ tends towards ever more intensive distribution (you hope!)
• Eg Glaxo Smith Klein – Maxi Nutrition
• http://www.maxinutrition.com/index
• Expanding distribution MAY be associated with brand extensions – eg RTD
• It SHOULD be associated with new consumer segments
• It probably will impact on brand image and possibly % gross profit • But that may be off-set by growth of sales and efficiency gains
Intensive distribution
• Resellers have limited investment
• Understanding the practical differences between intensive and exclusive distribution
• Look at different forms of ‘RTM Networks’
• Understand the benefits and difficulties associated with
RTM networks
• How multiple RTMs might be used
• Recognise the relevance of the law upon channel control
• Understand how ‘grey markets’ develop within the law and what the implications aof these are for brand owners. Background factors
• New norms – declining exclusivity in RTMs
• Brands search for new products, new markets, new distribution
• Dynamism of retail – new formats and ways of retailing – decline of the traditional
• Growing variety of consumer and shopper needs • Diffusion of IT/mobile – new ways of shopping
Legislative context
•
•
•
•
•
In the EU and elsewhere …
Liberalisation of markets
Wish to see intra-brand competition
IE Opposition to forms of ‘exclusivity’
And to systems that ‘tie up’ distribution
A reminder
• Intensive distribution
• Selective distribution – the brand owner HAS TO specify criteria that are required by the brand
• Exclusive distribution – a territory is given to the distributor • Products often seem to be selective – but this may be by default
Some products have a window of exclusivity
• Intended as mass products
• Eg Schweppes (part of Coca Cola) – adult soft drinks market
• 3 weeks in Asda before wider distribution
• And, in this case, before advertising
• Then are intensively distributed
In practice – for a lot of products
• A ‘product life cycle’ tends towards ever more intensive distribution (you hope!)
• Eg Glaxo Smith Klein – Maxi Nutrition
• http://www.maxinutrition.com/index
• Expanding distribution MAY be associated with brand extensions – eg RTD
• It SHOULD be associated with new consumer segments
• It probably will impact on brand image and possibly % gross profit • But that may be off-set by growth of sales and efficiency gains
Intensive distribution
• Resellers have limited investment