Ch.14 - Marketing Channels and Retailing

Marketing Channels

 Marketing Channel, also called channel of distribution, is a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer.  Marketing Channels are beneficial because they support the producers in creating form, time, place, and exchange utility for customers. Chanel’s channel members implement the form utility when they transfer the different types of leather, fabric, and other materials to bags and clothing; and the transfer of different types of plants to fragrances that we preferred. Time and place utilities are established when Chanel transport the products to their stores at different locations that make available for customers to purchase easily during their shopping trip. The exchange utility is created when Chanel are capable of interchange their products for reasonable price to their consumers.

Chanel adopt the direct channel on certain products. They distribute the clothing, jewelries, and luxury products directly to their consumers. Chanel also use dual distribution on their glasses, fragrances and cosmetic products. They adopt both direct and retailer channels. Those products are available at their own stores and other retailers like Macy’s and Bloomingdale’s.  Chanel maintain the form of selective distribution which is achieved by screening dealers to eliminate all but a few in any single area. Chanel operates only three boutiques in New York City. This conforms Chanel’s idea of being exclusively. 

Retailing

Retailing represents all the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use and has enhanced the quality of our daily lives. Retail establishments is classified based on the ownership, level of service, product assortment, and price. Chanel is a franchise that operates 300 boutiques worldwide, which includes specialty stores, and also with products sold in select department stores. Chanel fragrances and cosmetic products can be purchased online, in Chanel stores, and select department stores like Macy’s and Bloomingdale’s. Chanel clothing and luxury products can only be purchased in their stores.  According to Bruno Palovsky, Chanel's president of fashion states "Our clothes are quite sophisticated and one of our strengths is alterations. To be able to wear Chanel clothes, you need to try them on. You need to be in the fitting room. You need to have a tailor who alters the clothes to fit exactly to your body. I think it is part of Chanel. It is more than just our service. It is part of our differentiation to have ready-to-wear that is perfect for our customers." Chanel offers high levels of service. They provide alteration, consulting, gift wrapping, and personal shopping. Chanel carry narrow product lines but with considerable depth. For each product line, Chanel carry various collections of products. Chanel is an upscale store that sale their product in expensive price in order to maintain an image of exclusivity. Their price are corresponding to all the Chanel store in the United States.

Retailing Mix

Retailing mix is a combination of the six Ps - product, place, promotion, price, presentation, and personnel – to sell goods and services to the ultimate consumer. The combination of the six Ps casts a store’s image that will affect the consumers’ perceptions. Retail manager must make sure that the store’s positioning satisfy the customers’ expectations. I had recently visited the Chanel store in Manhattan located on E 57^th Street between Madison and Fifth Avenue. Below is the six Ps of the store I visited:

Product	The store offers all their product lines: Ready-to-wear, leather goods, shoes, accessories, sunglasses, watches, ultra jewelry collection, fine jewelry, fragrance, and cosmetic products. Under each product line, they have various collections and themes for consumer to choose.
Promotion	Chanel is a franchise, their promotions represent all Chanel retail stores. This retail store itself also adopts some strategies to help position the store in consumers’ minds. They send their consumers the thank you letter after their purchases through emails. After that, they make you a member of Chanel. They send you the seasonal style booklet, and send greeting around holidays and birthday through email, and also send birthday card through mail.
Place	The store is at a prosperous location, where it is between Fifth Avenue and Madison Avenue. Fifth Avenue is a major through fare in the center of the Manhattan where most of the upscale stores located.
Price	The price of their products are high to most of the working class. However, as an upscale fashion store, the price is reasonable and moderate compared to the competitors around.
Presentation	The store’s physical layout present a feeling of simple and dignity by using it theme color of white for most of its physical layout. They have sofa inside that will make customers feel comfortable. There is a stuff stands next to the door to open the door for the customers and welcomes them gives a sense of friendly. The internal layout is very organized. The products are separated in sections.
Personnel	The stuffs were very professional by their appearances and knowledge. They were properly dressed and with well manner. The stuffs informed the customers about the product that they interested. They also provided suggestion to the customers when they did not know what to choose. They welcome every customers even though they did not purchase their products.