Marketing channels

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Marketing channels

  1. 1. MARKETING CHANNELS:DELIVERING CUSTOMER VALUE
  2. 2. 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 theirchannels?• How should companies integrate channels andmanage channel conflict?• What are the key issues with e-commerce?
  3. 3. Raymondpresentsworld-classexperiencethrough itsstores
  4. 4. What is a MarketingChannel?A marketing channel system is the particular set ofinterdependent organizations involved in the process ofmaking a product or service available for use orconsumption.
  5. 5. Channels and MarketingDecisions• A push strategy involves the manufacturer usingits sales force and trade promotion money toinduce intermediaries to carry, promote, and sellthe product to end user.• A pull strategy involves the manufacturer usingadvertising and promotion to induce consumers toask intermediaries for the product, thus inducingthe intermediaries to order it.
  6. 6. Channel MemberFunctions• 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
  7. 7. Rural DistributionTraditional Channelsfor Reaching Out toRural Customers• Haats• Mandis• MelasInnovative DistributionChannels for RuralMarkets• Hub and Spoke• Model• Mobile shops and offices• Linkage with communitybased organizations(SHGs, NGOs, andcooperatives
  8. 8. Marketing Channel Flows
  9. 9. Categories of BuyersHabitual shoppersHigh value deal seekersVariety-loving shoppersHigh-involvement shoppers
  10. 10. Types of Shoppers• Service/quality customers• Price/value customers• Affinity customers
  11. 11. Consumer Marketing Channels
  12. 12. Figure 15.3Industrial Marketing ChannelsCopyright © 2009 Dorling Kindersley (India) Pvt. Ltd.15-12
  13. 13. Designing aMarketing Channel SystemAnalyze customer needsEvaluate major channel alternativesIdentify major channel alternativesEstablish channel objectives
  14. 14. Channel Service OutputsLot sizeWaiting/delivery timeSpatial convenienceProduct varietyService backup
  15. 15. Identifying Channel AlternativesCopyright © 2009 Dorling Kindersley (India) Pvt. Ltd.15-15Types ofintermediariesNumber ofintermediariesTerms andresponsibilities
  16. 16. Number of IntermediariesExclusiveSelectiveIntensive
  17. 17. Terms and Responsibilitiesof Channel Members• Price policy• Condition of sale• Distributors’ territorial rights• Mutual services and responsibilities
  18. 18. Channel-Management DecisionsSelecting channel membersTraining channel membersMotivating channel membersEvaluating channel membersModifying channel members
  19. 19. Channel Power• Coercive• Reward• Legitimate• Expert• Referent
  20. 20. Channel Integration and SystemsVertical marketingsystems• Corporate VMS• Administered VMS• Contractual VMSHorizontalmarketing systemsMultichannelsystems
  21. 21. What is Channel Conflict?• Channel conflict occurs when one member’s actionsprevent another channel from achieving its goal.• Types of channel conflict• Vertical• Horizontal• Multichannel
  22. 22. Causes of ChannelConflictCopyright © 2009 Dorling Kindersley (India) Pvt. Ltd.15-22Goal incompatibilityUnclear roles and rightsDifferences in perceptionIntermediaries’ dependenceon the manufacturer
  23. 23. Strategies for Managing ChannelConflict• Adoption ofsuperordinate goals• Exchange ofemployees• Joint membership intrade associations• Cooptation• Diplomacy• Mediation• Arbitration• Legal recourse

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