Post on 04-Jun-2018
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Designing and ManagingIntegrated
Marketing Channels
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Concepts-Issues
What is a marketing channel system andvalue network?
What work do marketing channels perform?
How should channels be designed? What decisions do companies face in
managing their channels?
How should companies integrate channelsand manage channel conflict?
What are the key issues with e-commerce?
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What is a Marketing Channel?
A marketing channel system is theparticular set of interdependent
organizations involved in the process ofmaking a product or service available
for use or consumption.
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Channels andMarketing Decisions
A push strategy uses the manufacturerssales force, trade promotion money, andother means to induce intermediaries tocarry, promote, and sell the product to endusers
A pull strategy uses advertising, promotion,and other forms of communication topersuade consumers to demand the productfrom intermediaries
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Buyer Expectations forChannel Integration
Ability to order a product online and pick it upat a convenient retail location
Ability to return an online-ordered product to
a nearby store Right to receive discounts based on total
online and offline purchases
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Categories of Buyers Habitual shoppers
High value deal seekers Variety-loving shoppers High-involvement shoppersTypes of Shoppers Service/quality customers Price/value customers Affinity customers
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Channel Member Functions
Gather information Develop and disseminate persuasive
communications
Reach agreements on price and terms Acquire funds to finance inventories Assume risks
Provide for storage Provide for buyers payment of their bills Oversee actual transfer of ownership
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Channel Service Outputs
Lot size Waiting/delivery time
Spatial convenience Product variety Service backup
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Designing a Marketing Channel System
Analyze customer needs Establish channel objectives Identify major channel alternativesa)Types of intermediariesb)Number of intermediaries
b1. Exclusive/Selective/Intensivec)Terms and responsibilities
c1. Price policy,Condition of sale,Distributors territorial rights,Mutual services and responsibilities
Evaluate major channel alternatives
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Channel-Management Decisions
Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members
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Channel Power
Coercive Reward Legitimate Expert Referent
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Channel Integration and Systems
Vertical marketing systems Corporate VMS
Administered VMS Contractual VMS
Horizontal marketing systems
Multichannel systems
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What is Channel Conflict?
Channel conflict occurs when onemembers actions prevent anotherchannel from achieving its goal.
Types of channel conflict Vertical Horizontal Multichannel
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Causes of Channel Conflict
Goal incompatibility Unclear roles and rights
Differences in perception Intermediaries dependence on
manufacturer
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Strategies for Managing ChannelConflict
Adoption ofsuperordinate goals
Exchange of
employees Joint membership in
trade associations
Cooptation Diplomacy Mediation Arbitration Legal recourse