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?
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.
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.
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
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
Marketing Channel Flows
Categories of BuyersHabitual shoppersHigh value deal seekersVariety-loving shoppersHigh-involvement shoppers
Types of Shoppers• Service/quality customers• Price/value customers• Affinity customers