Term
| Electronic Marketing Channels |
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Definition
| This can be defined as the use of the Internet to make products and services available so that the target market with access to computers or other enabling technologies can shop and complete the transaction for purchase via interactive electronic means. |
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Term
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Definition
| This term means that intermediaries become superfluous because even the smallest producers gain exposure to vast numbers of customers in Cyberspace. |
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Term
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Definition
| This means the addition of intermediaries in the channel structure. |
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Term
| Efficiency in the performance of distribution tasks |
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Definition
| This is what ultimately determines what form channel structure will take. |
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Term
1. Product flow
2. Negotiation flow
3. Ownership flow
4. Information flow
5. Promotion flow |
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Definition
| The Internet can be efficient at handling the last 4 flows, but not the first one, product flow. Product flow cannot be digitized, so product flow cannot be conveyed over the Internet. Thus electronic marketing channels based on the Internet are not “complete” marketing channels because they cannot handle the crucial product flow. Yet it is the product flow upon which all of the other flows are based. |
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Term
| Advantages of Electronic Marketing Channels |
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Definition
1. Global Scope and Reach
2. Convenience/rapid transaction processing
3. Information processing efficiency and flexibility
4. Data-based management and relationship capabilities
5. Lower sales and distribution costs |
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Term
| Disadvantages of Electronic Marketing Channels |
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Definition
1. Lack of contact with actual products and delayed possession
2. Fulfillment logistics not at internet speed or efficiency
3. Clutter, confusion and cumbersomeness of the internet
4. Non-purchase motives for shopping not addressed
Such as need to play the role of shopper, diversion from the routine of daily life, self-gratification, learning about new trends, physical activity, and sensory stimulation.
5. Security concerns of customers
Such as buying products from unknown firms that exist only in cyberspace, and discomfort with sending credit card numbers over the Internet. |
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Term
| Implications for Marketing Channel Strategy and Management |
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Definition
| Electronic marketing channels have undoubtedly broadened the range of channel options available to the firm. The most basic issue the channel manager will need to consider is whether internet-based channels fundamentally affect the firm’s decision about the priority it will give to distribution strategy. |
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Term
| Role of Electronic Marketing Channels in the Marketing Mix |
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Definition
The need to blend the Four P’s – product, price, promotion, place (distribution) is still the fundamental paradigm of modern marketing management with or without the Internet. But electronic marketing channels may change the blend of the marketing mix. The 4th P, Place (distribution) may assume a larger role relative to the other three variables for more and more firms. The Internet may reduce the potency of the first 3 Ps
Product – Internet can convey more information flow, negating product differentiation
Price – Internet allows mass price comparison, potentially eliminating price advantages of manufacturers
Promotion - if lots of consumers use the Internet, it will level the playing field so large firms will not have a significant promotional advantage.
Place (distribution) – firms skilled at distribution to carefully target, interact and build relationships with customers via superior electronic marketing channels may gain a substantial and sustainable competitive advantage. |
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Term
| The Internet can affect which phases of the 7-phase channel design paradigm from Chapter 6? |
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Definition
The 7-phase channel design paradigm from Chapter 6 does not change with the Internet. But it could affect the following:
Phase 1 – “Recognizing the need to make channel design decisions”
Phase 4 – “Developing possible channel alternatives”
Phase 6 – “Choosing the best channel structure” |
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Term
| How will the Internet affect channel member selection? |
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Definition
Channel member selection will remain an important decision area for most producers and manufacturers. Less than 10% of manufacturers currently
use the Internet. Most manufacturers, at least for now, will continue to use existing channel structures that rely heavily on intermediaries. |
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Term
| How will the Internet affect Channel Management |
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Definition
Channel Management is likely to be more challenging and complex rather than less as a result of this technology. The fundamental issues of motivating channel members,building cooperation, managing conflict, and coordinating elements of the marketing mix
to meet the firm’s distribution objectives will still require the full attention of the channel manager. |
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Term
| How will the Internet afffect Evaluation and Electronic Marketing Channels? |
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Definition
Nothing much of the substance of channel member performance evaluation is likely to change as a result of electronic marketing channels. Performance expectations, criteria,
and measurement on how well they are being met by channel members will still go on very much as before the advent of internet-based channels. |
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