The document discusses marketing channels and channel management. It explains how distributors can reduce the number of transactions between manufacturers and customers. It also outlines the functions of distribution channels, types of consumer and industrial marketing channels, customers' desired service levels, and decisions involved in managing marketing channels.

1. Chapter 16: Selecting & Managing Marketing Channels Otterbein College Winter 2000

2. Objectives Work Performed by Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Dynamics

3. How a Distributor Reduces the Number of Channel Transactions = Customer = Manufacturer A. Number of contacts without a distributor M x C = 3 X 3 = 9 1 3 2 4 5 6 7 8 9

4. How a Distributor Reduces the Number of Channel Transactions = Distributor = Customer = Manufacturer B. Number of contacts with a distributor M x C = 3 + 3 = 6 Store 1 2 3 4 5 6

5. Distribution Channel Functions Ordering Payments Communication Transfer Negotiation Financing Risk Taking Physical Distribution Information

6. Consumer Marketing Channels Wholesaler Jobber Retailer Consumer     Consumer Retailer Consumer  Mfr. 0-level channel Wholesaler Retailer Consumer   Mfr. 2-level channel Mfr. 3-level channel 1-level channel Mfr.

7. Industrial Marketing Channels Industrial distributors Manufacturer Consumer Manufacturer’s representative Manufacturer’s sales branch

8. Customers’ Desired Service Levels Lot size Waiting time Spatial convenience Product variety Service backup

9. Channel Management Decisions Selecting FEEDBACK Motivating Training Evaluating

10. Types of Vertical Marketing Systems Corporate Common Ownership at Different Levels of the Channel Contractual Contractual Agreement Among Channel Members Administered Leadership is Assumed by One or a Few Dominant Members