Marketing_Channels

Despite the uncertainty of the economic situation in most countries around the world, Japan seems to be blessed with continuous economic growth, ongoing trade successes and generous trade surpluses (The Role of Japanese Distribution Strategies). Although Fijutsi is not a small manufacturer, it acts like one when it comes to the production of the computer cases since the production volume and and market share is not that high while it is penetrating the market in Japan. Having said so, like all manufacturers, they will need to utilize merchants to sell their product. Fijutsi will base its channel strategy in the demestic Japanese market accordingly. Outline of Channel Strategy: There seem to be a very clear gap between the production phase and the consumption and use phase. This gap includes differences in place, quality, quantity, time and information where distribution comes into the picture to bridge these differences between the phases. In marketing channel strategy the main theme would be the focus on how to use a wholesaler or a retailer. Function of Channel: While the channel exists between the produces and the end user, the role of the distributor includes handling the delivery of the goods and doing the marketing activity on behalf of the producer. The channel should make it easier for the consumers to have access to the product whereby locations of where to access the product are presented to the consumer as well as assuring the delivery and payment acceptance on behalf of the producer. The Importance of Channel Strategy: Due to the long term contractual binding force between the distributors and the producers, channel strategy can be used to successfully create a competitive advantage where time goes by and the gap among competitors will expand provided that the channel is planned and managed properly. Channel Strategies: Channel strategy can be ultimately classified into three schemes as follows: 1. Open Channel Strategy: which is sale through as many shops as possible 2. Selective Channel Strategy: transaction only with cooperative and influential shops. 3. Vertical Marketing Systems Among the tree mentioned above, the suitable ones for Fujitsu would be selective channel strategy and vertical marketing systems. Since Fujistu always seeks superior results vertical marketing systems would work best for them in marketing the computer cases achieving an ultimate competitive advantage. The Significance of Vertical Marketing Systems (VMS) in Japan: VMS refers to the system that one among the producer, the wholesaler, the retailer, and the service trader becomes the channel captain of the marketing channel, controlling the other channel members in one way or the other while be able to develop the marketing strategy in a unity at its own will. Characteristics of VMS: VMS has the following characteristics: 1. The whole system is skillfully controlled based on the total plan whereby constituents have a strong mutual relationship with each doing the given marketing function. 2. Constituents are designed to perform economic activities as a system. 3. The executives of the channel captain plan strategies. 4. Despite that it is and ‘open network” entry is guaranteed by the capital and contracts relationship. 5. The cost, sales volume, and investment relationship is taken into consideration throughout the marketing process where all constituents strive to pursue optimum economic trade-off among them attempting to reduce total cost. 6. Decisions are made according to the marketing concept and whoever is in charge of the marketing strategy. 7. Scientific decisions made by professional members are taken into consideration. All of the above helps in introducing a new product to a market while maintaining strong relationships and contracts with distributors while keeping cost down and most importantly create, develop and maintain a strong competitive edge. The important thing for the success of all is how you make organizations (producers, wholesalers, and retailers) bind together, and this can be done through one of the following ways: 1. Capital system: This is basically when one of the three organizations take on the task of all; producing, distributing and selling be it the producer using his own stores to sell or wholesalers and retailers use their factories to produce. 2. Contract System: this is the process of uniting organizations by contracts. 3. Management System: this simply unites the organizations through the support system the leader gives to the others. Types of VMS: There are three different types of VMS and are as follows: 1. VMS led by producer where the producer picks a number of selling stores to be their only affiliate by choosing one store by the area, by this both the producer and the store create a competitive edge. Furthermore, the producer can benefit from the data collected on the experience of the consumers to the products to better develop it in the future. 2. VMS led by the wholesaler which is a model that is not recommended for Fujitsu since the producer becomes an affiliate of the wholesalers who leads the show. 3. VMS led by the retailer which is also not recommended for Fujitsu since it will only be an affiliate of the retailer. Recommendation for Fujitsu: After going through the explanation of marketing channels electing the VMS to be the best for the computer case product, we recommend that Fujitsu uses a mélange of two models which are capital investment and contract system. Given that technology is an integral part of our lives nowadays and many of us make our shopping online, Fujitsu can offer the product online where by the case is shopped to the consumer directly practicing the capital system while making use of the traffic of the retailers by distributing the product through them and by that they will be practicing the contract system and creating a huge competitive edge with a gap between them and their competitors that will grow over time. While investigating the different models in Japan we found Ishimuramanseido, who is a manufacturer in Fufuoka city, following the same model by combining the two systems together and the business has been doing well and growing as planned. References: ➢ Shimizu Miyashita & Harada, Ryutsu Nyumon, Yuhikaku, 1979, pp, 44-52 retrieved from NII-Electronic Library Service on April 1st, 2010. ➢ Kotler, p., Marketing Management, Prentice_hall, 1984, pp538-539 retrieved for UoP online on April 1st, 2010. ➢ Commerce in the Narrowest Sense Pointed out by Kubomura, R.& Harada, T. 1979, p 15 retrieved from NII-Electronic Library Service on April 1st, 2010. ➢ McCammon, Jr, BC., Ibid., pp.43-46 retrieved from NII-Electronic Library Service on April 1st, 2010. ➢ Nikkei Business (July 24th, 2000) pp. 74-75 retrieved on NII-Electronic Library Service on April 1st, 2010. ➢