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DESIGNING AND MANAGING
INTEGRATED MARKETING CHANNELS
WHAT IS A MARKETING CHANNEL?
Marketing Channel
The particular set of interdependent organizations involved in the process of making a product or service available for use or consumption.
CHANNELS AND MARKETING DECISIONS
Push strategyuses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users.
uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries.
Pull strategy
Push & pull strategy
UNDERSTANDING CUSTOMER NEEDS
Categories of BuyersHabitual shoppers
High value deal seekers
Variety-loving shoppers
High involvement shoppers
Types of shoppersService/quality
customers
Price/value customers
Affinity customers
ROLE OF MARKETING CHANNELS
Channel Member FunctionsGather information
Channel Member FunctionsGather information
Develop and disseminate persuasive communications
Channel Member FunctionsGather information
Develop and disseminate persuasive communicationsReach agreements on price and terms
Channel Member FunctionsGather information
Develop and disseminate persuasive communicationsReach agreements on price and terms
Acquire funds to finance inventories
Channel Member FunctionsGather information
Develop and disseminate persuasive communicationsReach agreements on price and terms
Acquire funds to finance inventoriesAssume risks
Channel Member FunctionsGather information
Develop and disseminate persuasive communicationsReach agreements on price and terms
Acquire funds to finance inventoriesAssume risks
Provide for storage
Channel Member FunctionsGather information
Develop and disseminate persuasive communicationsReach agreements on price and terms
Acquire funds to finance inventoriesAssume risks
Provide for storage
Channel Member FunctionsProvide for buyers’ payment of their bills
Channel Member FunctionsProvide for buyers’ payment of their bills
Oversee actual transfer of ownership
Marketing Channel Flows Example
Consumer Marketing Channels
Industrial Marketing Channels
CHANNEL DESIGN DECISIONS
Designing a Marketing Channel System
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
Designing a Marketing Channel System
Analyze customer needs
Designing a Marketing Channel System
Analyze customer needs
Lot size
Designing a Marketing Channel System
Analyze customer needs
Lot size
Waiting/delivery time
Designing a Marketing Channel System
Analyze customer needs
Lot size
Waiting/delivery time
Spatial convenien
ce
Designing a Marketing Channel System
Analyze customer needs
Lot size
Waiting/delivery time
Spatial convenien
ce
Product variety
Designing a Marketing Channel System
Analyze customer needs
Lot size
Waiting/delivery time
Spatial convenien
ce
Product variety
Service back up
Designing a Marketing Channel System
Identify major channel alternatives
Types of intermediari
es
Designing a Marketing Channel System
Identify major channel alternatives
Types of intermediari
es
Number of intermediari
es
Designing a Marketing Channel System
Identify major channel alternatives
Types of intermediari
es
Number of intermediari
es
Terms and responsibiliti
es
Designing a Marketing Channel System
Number of intermediari
es
Designing a Marketing Channel System
Number of intermediari
es
Exclusive
Designing a Marketing Channel System
Number of intermediari
es
Exclusive
Selective
Designing a Marketing Channel System
Number of intermediari
es
Exclusive
Selective
Intensive
Designing a Marketing Channel System
Identify major channel alternatives
Types of intermediari
es
Number of intermediari
es
Terms and responsibiliti
es
Designing a Marketing Channel System
Terms and responsibiliti
es
Designing a Marketing Channel System
Terms and responsibiliti
es
Price policy
Conditions of sale
Distributor’s territorial rights
Mutual services and responsibilities
The Value-Adds vs. Costs of Different Channels
CHANNEL MANAGEMENT
DECISIONS
Channel-Management DecisionsSelecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
CHANNEL INTEGRATION AND
SYSTEMS
Channel Integration & SystemsVertical marketing systems
Horizontal marketing systems
Multichannel systems
Channel Integration & SystemsVertical marketing systems
Horizontal marketing systems
Multichannel systems
• Corporate VMS• Administered
VMS• Contractual VMS
■Channel conflict occurs when one member’s actions prevent another channel from achieving its goal.
■Types of channel conflict– Vertical– Horizontal– Multichannel
Causes of channel conflictGoal incompatibility
Unclear roles and rights
Differences in perception
Intermediaries’ dependence on the manufacturer
Strategies for Managing Channel Conflict
■Adoption of superordinate goals
■Exchange of employees
■Joint membership in trade associations
■Cooptation■Diplomacy■Mediation■Arbitration■Legal recourse
E-COMMERCE MARKETING PRACTICES
Pure-Click Companies
those that have launched aWeb site without anyprevious existence as a firm
Brick-and-Click Companies
existing companies that have added an online site for information and/or e-commerce
THANK YOU FOR LISTENING!
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