This document discusses different types of integrated marketing channel systems. It describes vertical marketing systems, where one channel member exerts control over other members. There are three types: corporate, administrative, and contractual. Horizontal marketing systems involve unrelated firms collaborating at the same channel level. Hybrid systems use multiple channel levels. The document outlines considerations for designing and managing hybrid systems, and compares advantages and disadvantages of different integrated approaches.

1. Chapter - 19
Channel Integration

2. Channel Integration 2
Objectives
 Importance of channel integration
 Vertical marketing systems
 Types of vertical marketing systems
 Benefits and costs of vertical marketing
systems
 Horizontal marketing systems
 Hybrid channel systems

3. Channel Integration 3
Importance of Channel Integration
 Bridge the gaps prevailing between production consumption
 Streamline the physical and information flow among channel
members
 Reduces the levels of opportunities
 In case of exports, reduces the level of uncertainty
 Important component of company’s marketing channel strategy
 Better utilization of limited resources
 Affect a company’s competitive positioning and strategy in different
markets
 Can be used as a barrier to enter into a market
 Can be used in differentiation strategy
 Promotional campaigns can be coordinated

4. Channel Integration 4
Vertical Marketing System
 In vertical marketing system one of the channel
member owns the or exert a substantial
influence or control over the activities of the
members along the channel
 This ‘channel leader’ oversee the functions of
channel members and ensures that every one
performs only those functions in which they are
good

5. Channel Integration 5
Types of Vertical Marketing System
 Corporate VMS
 Administrative VMS
 Contractual VMS

6. Channel Integration 6
Horizontal Marketing System
 A horizontal marketing system is an
arrangement within a distribution channel in
which two or more firms at the same channel
level work towards a common goal
 In this system, the two firms are unrelated to
each other and come together with the objective
of cashing in on a market opportunity

7. Channel Integration 7
Hybrid Channel System
 When a company use more than one level of
channel to sell its products than this type of
channel arrangement is called hybrid marketing
system

8. Channel Integration 8
Designing and Managing Hybrid Channel
System
 Designing hybrid channel system
 Managing hybrid channel system
 Advantage and disadvantage of hybrid channel
systems

9. Channel Integration 9
Summary
 Importance of channel integration
 Vertical marketing systems
 Types of vertical marketing systems
 Benefits and costs of vertical marketing
systems
 Horizontal marketing systems
 Hybrid channel systems

10. Thank you