The 4 as of marketing sheth download pdf

These early concepts are still valid today as observed by Lambin , who stated that the rationale for marketing channels are made up of contractual efficiency, economies of scale, reduction of functional discrepancies, better assortment and better service.

Therefore, we can say that the reasons of past years are still valid today as they were previously. Key Functions of Marketing or Distribution Channels Let us now look at the key functions of marketing channels in detail. The earliest classification of marketing channels, according to Revzan in Mallen, 6 , divided channels into 1 direct channels single link or direct contact between the seller or producer and the buyer or consumer , 2 indirect channels multiple links or numerous intermediaries between seller or producer and the buyer or consumer and 3 semi-direct channels in between direct and indirect channels with one or two intermediaries between seller or producer and the buyer or consumer.

For example, Kotler classified the length of channels based on the number of intermediaries existing in the channels. According to Kotler , channels are categorized into zero-level channels, one-level channels, two-level channels, three-level channels, so on and so forth, based on the number of intermediaries between the seller or producer and the buyer or consumer.

A graphical presentation of the categorization is shown as Figure 1 in the Appendix. Selection of Distribution Channels A key part to understanding distribution channels is to understand how the design and selection of a channel is done.

As stated earlier, the choice of distribution channels has far reaching implication on all other marketing decisions.

Presently, however, selection of channel structure is based on market factors, product characteristics and company variables Lambin, , p. Based on this, we conclude that out of the three early factors, the directly relevant one today is the product characteristics. However, we can consider market structure and company variables as part of the underlying conditions for production. Based on the analysis later, product characteristics will turn out to be the key factor in the impact of the electronic commerce on distribution channels.

The rapid development in information technology and communication created vast opportunities for companies to reconstruct and improve internal and external business processes, including those related to marketing. The Internet comprises a number of applications or tools such as electronic mails, newsgroups, file transfers, and the World Wide Web or the Web as well as a myriad of computing and communication equipments.

The use of a common computer language, the hypertext markup language HTML and a common communication protocol, the hypertext transfer protocol HTTP enables networks to link with each other. Chaffey 76 stated that the Web enables an easy exchange of information between business and consumers due to the use of standard tools. A variety of reasons for the success of the Web are proposed by Kalakota and Whinston 69 as follows: x x Ease of navigation and use x Ease of publishing content x New distribution models x Enabling a network-centric computing paradigm Enabling new intra-business applications The third reason has strong ramifications to marketing.

So, lets discuss this point further. According to Kalakota and Whinston 71 , the Web allows any type of good or services to be purchased through it in a faster and more convenient way, citing examples such as banking services and software distribution.

The effect of such changes on traditional distribution or marketing channels will be discussed in Section 4. Electronic Commerce On very broad terms, we can say that electronic commerce is simply commerce or business conducted over electronic means.

However, as a result of the opening up and wider use of the Internet, electronic commerce has expanded rapidly in the past 10 to 15 years. Based on Forrester Research in Chaffey, 13 , worldwide electronic commerce is expected to grow about ten-fold from Table 2 in the Appendix shows the worldwide electronic commerce growth from to Business process perspective: Electronic commerce is the application of technology toward the automation of x business transactions and workflows.

Service perspective: Electronic commerce is a tool that addresses the desires of firms, consumers, and x management to cut service costs while improving the quality and the speed of service delivery. Online perspective: Electronic commerce provides the capability of buying and selling products and information on the Internet and other online services.

Various writers and researches have espoused the benefits of the electronic commerce. Potential of wider availability of hard-to-find products and wider selection of items due to the width and x efficiency of the channel. For industrial consumers, reduced costs to buyers from increased competition in procurement as more suppliers are able to compete in an electronically open marketplace.

Benefits to Sellers x The use of the Web as a distribution channel, including offering certain classes of providers participation in a market in which distribution costs or cost-of-sales shrink to zero. For example, digital products can be x delivered immediately. Conducive environment to developing customer relationships as the Web cover much more than the x traditional media. Opportunity for competition on the "specialty" axis instead of the price axis, as from a marketing perspective, x it is rarely desirable to compete solely on the basis of price.

For industrial sellers, the operational benefits are reduced errors, time, and overhead costs in information processing; reduced costs to suppliers by electronically accessing on-line databases of bid opportunities, online abilities to submit bids, and online review of awards. Ease of use includes issues such as the user-friendliness of the software, ease of software installation, and the x like. Web measurement problem as firms are unsure of the number of people on the Net and how many people use the Web and this uncertainty makes investment decisions difficult.

Of course, history showed that a large number of these ventures did not succeed as seen by the subsequent Internet bubble burst in Three of these impacts will be discussed further below. Disintermediation of Channels The first impact arises from the Internet enabling new distribution models. For example, in the airline industry, passengers are able to purchase tickets through the websites of the airlines.

In doing so, the traditional intermediary, the travel agents, is by-passed. Customers and sellers interact directly. Although the ramifications to traditional can be significant, Gallaugher argued that due to the removal of the intermediaries, there will be value gaps in the channel in the form of less tangible assets like market knowledge in matters such as distribution, brand and market coverage.

Reintermediation of Channels The second impact also arises from the Internet enabling new distribution models. However, in this case, additional intermediary is added on to the distribution or marketing channels. In order to reach their customers, the sellers, namely the book publishers, add another intermediary to the traditional channel.

The sellers may also replace the traditional intermediary, by a new one. This problem is known as reintermediation. Wigand 4 defined reintermediation as the replacement of intermediaries between manufacturer or supplier and customer or buyer by an electronic maker or a by value networks. According to Chaffey 39 , the new intermediaries can provide services such as supplier search or product evaluation.

He further the same reason is applicable in the case of disintermediation Wigand 9. However, in this case, the impact is in the context of direct marketing.

In the traditional marketing or distribution channel, the lowest level of classification based on channel length is the zero-level channel refer to Section 2. Zero-level channels are also known as direct marketing, where the seller or manufacturer deals, markets or sells directly to the buyers or customers. Prior to the wide usage of the Internet, there were three main mediums of direct marketing, namely person-to-person, mailing and telemarketing. Nowadays, firms are able to use the Internet as a new medium to reach their customers.

The use of websites where sales and purchases are transacted and the use of electronic mail where sales and purchases are solicited are two good examples of firms moving the marketplace to the marketspace.

As we are aware, the Internet extent can be far reaching. Therefore, the possibilities for firms of increasing sales and purchases through this new medium of direct marketing can be endless!

The Internet usage in the country has grown from 42, in to about 8. Table 1 in the Appendix shows the annual numbers of Internet users from to Ang stated that most Malaysian retailers were not going to the electronic way due to payments issues and fraud concerns, resulting in the Web being used primarily for advertising and promotion purposes only. Mukti To resolve the payment problems, some firms resorted to off-line payment methods Ang Despite the problems, a number of local companies are taking on the Internet with vigour.

Two oft-cited examples are the bank, Maybank and the airline, AirAsia. The next two sub-sections will feature the electronic commerce initiatives undertaken by both organisations and how these initiatives relate to the distribution or marketing channels. The bank also has the largest market share in Malaysia for commercial banking business. Among local banks, the bank has the most number of branches throughout the country. Maybank also has a number of overseas branches and subsidiaries.

Maybank is the market leader in terms of adopting computer and communication based technologies. In , the bank posted a pre-tax profit of 2. In April , the bank launched Internet banking kiosks, by which it provided terminals at its branches to enable customers to undertake their Internet banking transactions.

The bank expects 1. On a related development, Maybank began implementation of an Internet-based e-Procurement solution that will link both the bank and its suppliers and vendors in November The bank expects the initiative to increase operational efficiency. The main use of the Internet banking services is for payment of bills and transfer of funds.

The total average transaction amounts to million MYR monthly. By the end of , the bank expects the number of organisations to grow to and the amount of monthly transaction to increase to million MYR.

The bank did not remove any of its intermediaries in the process of implementing its Internet initiatives. Maybank basically extended its service channel from its physical branches and telephone banking to the Internet. Benefits to consumers are obvious. The Internet banking provides convenience to users. For example, the average person has to pay a number of bills every month to different organisations. With Internet banking, the person can make the payments on-line and without the hassle of physically going to places where these payments are to be made in person.

Imagine having to go to the telephone company, the Internet provider company, the water supply company, the electricity supply company, so on and so forth every month to settle your bills.

A number of other local banks and foreign-owned banks have also introduced Internet banking to their customers. If awards for its Internet initiatives are to be used as a gauge of success, Maybank can claim some success. In , the bank won the award for the Electronic commerce Site of the Year from the computer industry association of Malaysia. In and , the Global Finance awarded Maybank with the awards as the best Internet bank in Malaysia. Case Study No.

The airline also plans to expand its services to neighbouring countries in Southeast Asia. The airline was transformed from a conventional full service one in January , after it was acquired by a new set of owners at the end of the previous year. The premise of the models used is to provide very limited services, while offering lower fares to passengers.

The key of the strategy of low cost airlines is to reduce costs while at the same time offering low prices to passengers Boone, As such, AirAsia does a lot to reduce its operating costs so much so that the Chief Executive Officer considers the enemy of the airline is not other airlines but cost. One such way to reduce cost is to adopt Internet reservation systems, which AirAsia has done.

Use of Electronic Commerce and its Impact In May , 5 months after it changed its operating model, AirAsia implemented an Internet reservation system, which allowed on-line payment. AirAsia made a bold move to introduce a website that enabled payment by users. There is only a small number of Malaysian businesses having electronic commerce websites and even fewer having websites which enabled on-line payment.

Two months earlier in April , AirAsia had 1 introduced ticket-less ticketing system, by which passengers are given a booking number and required to provide the same and a photo identification at the check in counter, and 2 enabled payment of air tickets using credit cards through telephone via its call centre. Previously, the call centre only handled enquiries and bookings. In addition to its call centre and Internet reservations systems, AirAsia also uses reservations and sales offices and travel agents as distribution channels for its tickets.

Sales through travel agents make up a bout a quarter of the total sales Devesahayam The airline has only 13 preferred travel agents throughout the country. Based on the very select few preferred travel agents, we can say that AirAsia has limited use of travel agents as third party intermediaries from distribution channel point of view.

In August , AirAsia went a step further with a new electronic commerce initiative, when it introduced reservation and payment of tickets via Short Messaging System SMS through mobile phone services.

The airline claimed that the initiative was the first of its kind in the world. In early , AirAsia announced the final results of its operations from April to June and preliminary results of operations from July to December and among the key achievements were as follows: x The airline managed to turnaround a net loss of Net income from July x to December amounted to The 4P's can thankfully be retired as the 4A's provide a much superior road map to delivering great offerings and marketing programs and a framework that will help screen out both strategic and tactical disasters.

This is a splendid book for the neophyte and accomplished manager alike. Sheth and Sisodia combine razor-sharp analyses with useful action plans and in the process teach us how to think better about market opportunities and how to apply the 4As framework to advantage. A model of exposition, this book brings to life principles and policy guidelines with new diagnoses of both market successes, from the Aflac Duck to buying shoes on the web with Zappos, and market failures, from Apple's, yes Apple's, Newton to Ford's Edsel.

The focus is on learning how to be a better analyst, manager, innovation implementer, and sustainer. Meticulously argued and illustrated, this book will make the reader better able to succeed in the knowledge economy and beyond. Two thumbs up! A 'must-read' for any business that wants to be customer-oriented! It offers a simple and powerful way for businesses to keep from falling prey to navel gazing.

The 4A's of Marketing represents a long overdue, truly novel framework for thinking about marketing decision-making. Despite decades of exhortations that companies adopt a more customer-centric stance, the decidedly company-centric 4P's paradigm has endured.

In the 4A's of Marketing, Professors Sheth and Sisodia creatively convert the 4P's to the desired customer perspective. Think benefits rather than features: Price becomes Affordability; Place becomes Accessibility; and so forth. The shift in perspective is deceptively simple but profound in its implications for how marketers anticipate the impact of their decisions on the consumer.

The 4A's of Marketing offers a game-changing perspective for any manager or organization striving to become market-driven and customer-centric. Jagdish Sheth and Rajendra Sisodia have teamed up to develop a powerful treatment of customer-centric marketing. Built around the notion that the customer is the dominant actor in most markets, the 4A's of Marketing identifies four roles of customers to which marketers must respond if they are to be successful. Written in an engaging and highly accessible style, this book is filled with real world examples that illustrate the concepts and ideas it offers.