Marketing Channel Strategy Case Study

There are several importance of marketing channel strategy which are the long-term consequences of this marketing channel and also it’s constrains and opportunities. In this study, they want to examine the combination between the strategy management theories with the marketing channels literature in order to observe the impact of different channel structure on the choice of a generic channel strategy. This study is examining how strategy can be applied in channel context such as strategy concept and generic strategy. According to Wren (2007), channel structure was essentially treated at a small level, rather than bigger issues. For examples, on how firms will decide who will perform what activities and the cost and trade-offs that may involve

The three generic strategies is overall low-cost leader (OLC), differentiation, and focus. The overall low-cost leader (OLC) strategy focus on the economies of scale, cost minimization and other factors in order to become the low-cost producer in industry. For differentiation strategy, it will seek to be unique in the industry; the differentiation might include the quality, product durability, service, or product image. A differentiation will allow the firms to charge premium price and will become above of the average performer in the industry. The focus strategy will narrow competitive scope within the industry. This strategy will set to serve better than anyone else in the same industry. Other than that, the firm must sacrifice potential earning from the

Most of firm might choose to differentiate their firm in term of quality, premium features, technological leadership and other. Firms that generate high growth and profits are better to use both strategy which is the differentiation and low-cost strategy. The larger firms in better position to choose between low-cost strategy and different strategy since both strategies are available for larger firms. Firm that focusing in high quality is able to minimize the cost through improvement efficiency. In order to implement a combination strategy, firm with a moderate integrated is most suitable to implement this strategy. Power or control strategy is generally seen as the ability to change another channel behaviour thereby controlling the decision variables of other member. Power can be positive and negative, if someone attempt to influence exchange partners by using the coercive influence strategy it will be consider as negative aspect. Meanwhile for positive it creates natural divisions and coordination among channel members (Frazier and Summers 1986). The distribution of power in the channel is rarely