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17Designing and

ManagingIntegratedMarketing

Channels

1

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Chapter Questions

What is a marketing channel system and valuenetwork?

What work do marketing channels perform?

How should channels be designed?

What decisions do companies face in managing

their channels?

How should companies integrate channels and

manage channel conflict? What are the key issues with e-commerce and m-

commerce?

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What is a Marketing Channel?

 % marketing channel system is the

particular set of interdependent

organi&ations involved in the process of

making a product or service available foruse or consumption'

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Intermediaries

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Channels and

Marketing Decisions

 % push strategy uses the manufacturer)ssales force* trade promotion money* andother means to induce intermediaries to

carry* promote* and sell the product to endusers

 % pull strategy uses advertising* promotion*and other forms of communication to

persuade consumers to demand the productfrom intermediaries

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REI Employs Hybrid Channels

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Table !" Channel Member

#unctions

ather information

.evelop and disseminate persuasive

communications

/each agreements on price and terms  %cuire funds to finance inventories

 %ssume risks

!rovide for storage !rovide for buyers) payment of their bills

1versee actual transfer of ownership

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#igure !" Marketing #lo$s

in the Marketing Channel

%or #orkli%t Trucks

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#igure !"& Consumer Markets

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#igure !"& Industrial Markets

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Designing a

Marketing Channel 'ystem

 %naly&e customer needs

"stablish channel ob4ectives

5dentify ma4or channel alternatives

"valuate ma4or channel alternatives

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Identi%ying Channel (lternati)es

6ypes of intermediaries

7umber of intermediaries

6erms and responsibilities

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*umber o% Intermediaries

"8clusive

9elective

5ntensive

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Terms and Responsibilities

o% Channel Members

!rice policy

Condition of sale

.istributors) territorial rights

:utual services and responsibilities

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Channel+Management Decisions

9electing channel members

6raining channel members

:otivating channel members

"valuating channel members

:odifying channel members

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Channel ,o$er 

Coercive

/eward

;egitimate

"8pert

/eferent

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Causes o% Channel Con%lict

oal incompatibility

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Table !"- 'trategies %or

Managing Channel Con%lict

9trategic

 4ustification

.ual compensation

9uperordinate goals

"mployee e8change

=oint memberships

Cooptation

.iplomacy

:ediation  %rbitration

;egal recourse

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E+Commerce

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!ure-click

>rick-and-click

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M+Commerce

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#or Re)ie$

What is a marketing channel system and valuenetwork?

What work do marketing channels perform?

How should channels be designed? What decisions do companies face in managing

their channels?

How should companies integrate channels and

manage channel conflict? What are the key issues with e-commerce and

m-commerce?

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