Chapter 12 Zara
CHAPTER
Marketing Channels Delivering
12
Customer Value
PRE VIEWING
We now arrive at the third marketing mix tool—distribution. Firms rarely work alone in creating value for customers and building profitable customer relationships. Instead, most THE CONCEPTS are only a single link in a larger supply chain and marketing channel. As such, an individual firm’s success depends not only on how well it performs but also on how well its entire marketing channel competes with competitors’ channels. To be good at customer relationship management, a company must also be good at partner relationship management. The first part of this chapter explores the nature of marketing channels and the marketer’s channel design and management decisions. We then examine physical distribution—or logistics—an area that is growing dramatically in importance and sophistication. In the next chapter, we’ll look more closely at two major channel intermediaries—retailers and wholesalers. We’ll start with a look at a company whose groundbreaking, customer-centred distribution strategy took it to the top of its industry.
Q
uick, which rental-car company is number one? Chances are good that you said Hertz. Okay, who’s number two? That must be Avis, you say. After all, for years Avis advertising has said, “We’re #2, so we try harder!” But if you said Hertz or Avis, you’re about to be surprised. By any measure—most locations, revenues, profits, or number of cars—the number-one North American rental-car company is Enterprise Rent-A-Car. What’s more, this is no recent development. Enterprise left number-two Hertz in its rear-view mirror in the late 1990s and has never looked back. What may have fooled you is that for a long time, Hertz was number one in airport car rentals. However, with estimated revenues of US$9.5 billion and growing, Enterprise now has 30 percent more overall car rental sales than Hertz. What’s more, analysts estimate that the privately owned Enterprise is twice as
Marketing Channels Delivering
12
Customer Value
PRE VIEWING
We now arrive at the third marketing mix tool—distribution. Firms rarely work alone in creating value for customers and building profitable customer relationships. Instead, most THE CONCEPTS are only a single link in a larger supply chain and marketing channel. As such, an individual firm’s success depends not only on how well it performs but also on how well its entire marketing channel competes with competitors’ channels. To be good at customer relationship management, a company must also be good at partner relationship management. The first part of this chapter explores the nature of marketing channels and the marketer’s channel design and management decisions. We then examine physical distribution—or logistics—an area that is growing dramatically in importance and sophistication. In the next chapter, we’ll look more closely at two major channel intermediaries—retailers and wholesalers. We’ll start with a look at a company whose groundbreaking, customer-centred distribution strategy took it to the top of its industry.
Q
uick, which rental-car company is number one? Chances are good that you said Hertz. Okay, who’s number two? That must be Avis, you say. After all, for years Avis advertising has said, “We’re #2, so we try harder!” But if you said Hertz or Avis, you’re about to be surprised. By any measure—most locations, revenues, profits, or number of cars—the number-one North American rental-car company is Enterprise Rent-A-Car. What’s more, this is no recent development. Enterprise left number-two Hertz in its rear-view mirror in the late 1990s and has never looked back. What may have fooled you is that for a long time, Hertz was number one in airport car rentals. However, with estimated revenues of US$9.5 billion and growing, Enterprise now has 30 percent more overall car rental sales than Hertz. What’s more, analysts estimate that the privately owned Enterprise is twice as