Ford Motor Company Design and Governance of the End User Interface Spring 2000 BA 266: 2000-3.

Slides:



Advertisements
Similar presentations
Objectives Know why companies use distribution channels and understand the functions that these channels perform. Learn how channel members interact and.
Advertisements

Module 3 Market segmentation Dr. Mohamed Zamil AL-Akhtaby.
Introduction to Marketing
Caterpillar Channel Relations
Channel Design: Review Distribution Channel Strategy L. P. Bucklin Spring 2000.
Egghead Distribution Channel Strategy BA 266 February 2000.
The Outsourcing Process
Managing Channels with Intensive Distribution Governance and Distribution Channel Strategy February 2000.
Conflict in Distribution Distribution Channel Strategy L. P. Bucklin Spring 2000.
Distribution decisions in international context External factors Structure of distribution/channel Conflict & Control issues Managing logistics.
The HP Printer Web Channel Distribution Channel Strategy L. P. Bucklin Spring 2000.
7-1 Ch.7:PRODUCT STRATEGY Product Classification (1 of 3) Consumer Product Classifications –Convenience Products –Shopping Products –Specialty Products.
Basic Principles of Distribution Channel Design Distribution Channel Strategy BA266: L. P. Bucklin.
Reynolds Metals Company Distribution Channel Strategy Managing Incentives under Intensive Distribution March 2000.
A Brief Review of Channel Governance Distribution Channel Strategy L. P. Bucklin Spring 2000.
4.1 The Role of Marketing Chapter 24. What is Marketing?  The management task that links the business to the customer by identifying and meeting the.
Marketing Management Chapter 1.
MARKETING STRATEGY O.C. FERRELL • MICHAEL D. HARTLINE
Objectives Know why companies use distribution channels and understand the functions that these channels perform. Learn how channel members interact and.
Marketing Channels and Supply Chain Management
Copyright © Houghton Mifflin Company. All rights reserved. 1–11–1 Marketing Deals with Products, Price, Distribution, and Promotion The Marketing Mix –Four.
Understand the role of business in the global economy.
การจัดการช่องทางการจัด จำหน่าย Distribution Channel Management Vertical Integration In Distribution Chapter 9.
The Purchasing Function
Consumer Buying Behavior, Search, and Factors Affecting External Search Effort.
Supply Chain Management. It is a cross-functional approach to managing the movement of raw materials into an organization and the movement of finished.
Chapter 16 Direct Selling & Direct Marketing Channel Systems.
Learning Goals Know why companies use distribution channels and understand the functions that these channels perform. Learn how channel members interact.
Market Planning Unit 4.2 The Marketing Mix.
Trust and Selling Ethically
1 INTERACTIVE MARKETING STRATEGY (Lecture 11) Sunarto Prayitno.
© Design Principles for Distribution Channels Distribution Channel Strategy BA266: L. P. Bucklin.
Introduction to Marketing
Marketing. Marketing Activities Buying – Obtaining a product to be resold; involves finding suppliers that can provide the right products in the right.
Marketing Channel Strategy The term marketing channel was first used to describe the existence of a trade channel bridging producers and users. Early writers.
Chapter 8 International Strategic Alliances
What is Marketing? Professor Chip Besio Cox School of Business Southern Methodist University.
1 Business and Marketing Strategies
Chapter 3 Marketing Begins With Economics. Scarcity and Private Enterprise Identifying the basic economic problem How our private enterprise economy works.
Chapter 13 Marketing Channels
Why do they die? Understanding why and how joint ventures die gives insight into how firms can make better use of them. Even though we focus on termination,
Marketing Channel Strategy The term marketing channel was first used to describe the existence of a trade channel bridging producers and users. Early writers.
Chapter 14: Supply Systems. Wholesaling  wholesaling involves any sale that is not a retail sale; to other businesses for resale, for use in other products,
GLOBAL MARKETING Distribution Management. Why A Distribution Strategy? To make the right quantities of the right product or service available at the right.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Introduction to Marketing.
Marketing Channels and Supply Chain Management Chapter 12.
2-1 Environmental Analysis  Managers must understand how the environment affects their organization  It is difficult to predict how certain events will.
Marketing I Curriculum Guide. Product/Service Management Standard 5.
Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Chapter 5.
Chapter 8: Services Marketing and Customer Relationships.
21 st -Century Supply Chains Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
MKTG 769 PRICING AND DISTRIBUTION Lars Perner, Instructor 1 GLOBAL PRICING ISSUES Price--definition Applicability of price research outside U.S./Western.
0 Chapter 10 Developing, Positioning, and Differentiating Products through the Life Cycle.
> > > > Promotion and Pricing Strategies Chapter 14.
Which of the following is not the characteristics of the services? (a) Intangibility (b) Perishability (c) Seperability (d) Heterogeniety Answer: (c)
Standard 5. A marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities.
Click to add text 4.1 The Role of Marketing. What is Marketing?  The management task that links the business to the customer by identifying and meeting.
What is a marketing channel?
INTRODUCTION TO MARKETING
Marketing Channels and Supply Chain Management
Distribution Strategy
Marketing Channels and Supply Chain Management
Which of the following is not the characteristics of the services?
Supply Chain Management: From Vision to Implementation
Marketing Channels and Supply Chain Management
PRODUCING AND MARKETING GOoDS AND SERVICES
Chapter 9: Setting the list or quoted price
The Decision-Making Model
Marketing Channels and Supply Chain Management
Introduction to Marketing Miss Mary Lynn Mundell.
Presentation transcript:

Ford Motor Company Design and Governance of the End User Interface Spring 2000 BA 266:

2 Ford Decisions & Generalizations Channel Design Options Determining EUI Value-Added Trade-offs Pooling the EUI Product Assortment Controlling Competition among EUI Governance Options Applying Pressure Dismembering Channels and Conflict Inventory Risk and Governance Old Chinese Proverb

3 EUI Design Options Return to smaller dealerships Ignore service problem, continue shift to larger dealer/service centers Separate, localized service locations –Operated by dealers –Third parties (sub-franchisees, contractors) –Operated by Ford Warehouse channel to hold dealer inventory

4 EUI V-A Trade-off Increasing the distance of the EUI to the end user diminishes the V-A provided, ceteris paribus –Closeness to the end user enhances access, but will reduce market size available to the EUI –Holding assortment constant, product turnover decline –Broader assortment V-A is more feasible as the EUI distance to EU increases Corollary: There is a trade-off in the provision of assortment and access services by an EUI

5 The Evolving Auto Channel? End-users Supplier S&S Dlr. End-users Supplier S&S Dlr. S&S = Sales and Service

6 Pooled EUI Product Mix The auto dealer provides a pooled mix of products (new & used cars) and repair services For early dealers, there was a match in end user access requirements and mix components With growth in supplier product line, TV advertising, there is a separation Corollary: Maintenance of a product mix with different end user V-A needs damages the channel equilibrium for products and service

7 EU Service Needs What benefits do end-users seek in their selection of an auto-service center? –Role of cost/price –Role of service quality (right the first time, fast) –Role of assortment, service capability (complexity) –Role of personal treatment by sales personnel –Role of distance How effectively can these services needs be satisfied within a centralized facility?

8 End-users Supplier S&S Dlr. Warehouse End-users Supplier Service S&S Dlr. Service Two Alternate EUI Designs

9 Competition Among EUI Increasing the distance between EUI and the end user reduces the number of dealers and reduces intra-channel price competition a la Saturn Competition among EUI is an important factor driving channel price toward cost despite some EU dislike Corollary: Higher EUI prices damage channel equilibrium, opening opportunities for new channels unless politically blocked and/or brand demand is powerful

10 Separate service operations from product sales and decentralize improve consumer access Enhance dealer interest in service by increasing profitability Increase pressure upon dealers by stronger enforcement of service quality standards Buy out service operations from dealers and operate directly Reduce pressure on dealers for volume; enhance product quality Some Governance Options

11 Governance Constraints What constraints limit supplier influence over dealer service quality –Limited power because of state legislation making dismissal difficult –Propensity of many consumers to bargain creates a unique transaction environment –Service is not seen as a strong profit center –Ford’s culture of strong sales orientation

12 Applying Pressure Application of pressure for conformance: –generates conflict where dealers do not perceive requirements to be fair or just –Is difficult to enforce because legal and historical position of the dealer has reduced supplier power Carrots continue to do better than sticks –Dealers must be shown that good service enhances their dealership, profits

13 Pooled Service & Sales Is there benefit to a common or pooled operation of service and sales in the same establishment? Is there benefit to a common ownership of service and sales, but not necessarily location? –To the new car dealer, end user, sale of used cars Would independent service facilities generate conflict within the channel? Change within a channel where power is closely balanced, benefits are unevenly distributed, and there is a lack of trust will generate chaos

14 Warehouse Channel Inventories Who will be responsible for inventory control? –The individual dealer? –The supplier? Both options create obstacles. –Dealers could not be individually responsible –If supplier were responsible, losses for cars not sold in timely fashion would generate losses Inventory risk is best controlled by channel member that controls turnover

15 Ford’s Perception of the Service-Sales Linkage Product characteristics are perceived to be increasingly less significant in determining end- user choice What are the factors that determine dealer choice? –Model availability –Assortment –Price Consultants are prone to lead clients down paths they want to travel (old Chinese proverb)