14_ippt.ppt

14
Designing and Managing
Integrated Marketing Channels

Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation from
the United States edition of Marketing Management, 14e.
14-2
Chapter Questions
 What is a marketing channel system and value
network?
 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?

14-3
What Is a Marketing Channel?
A marketing channel system is the
particular set of interdependent
organizations involved in the process of
making a product or service available for
use or consumption.

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Intermediaries

14-5
Channels and
Marketing Decisions
 Push strategy
 Pull strategy

14-6
Hybrid channels
Hybrid channels or multichannel marketing
occurs when a single firm uses two or more
marketing channels to reach customer
segments.

14-7
Buyer Expectations for
Channel Integration
 Ability to order a product online and pick it up
at a convenient retail location
 Ability to return an online-ordered product to a
nearby store
 Right to receive discounts based on total
online and offline purchases

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Table 14.1 Channel Member
Functions
 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

14-9
Figure 14.1 Marketing Flows
in the Marketing Channel
for Forklift Trucks

14-10
Marketing Channel Levels
 Zero-level channel (direct marketing channel)
 One-level channel
 Two-level channel
 Three-level channel

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Figure 14.2 Consumer Markets

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Figure 14.2 Industrial Markets

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Reverse-Flow Channels
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
Reverse-flow channels are important to:
(1)reuse products or containers (such as
refillable chemical-carrying drums);
(2)refurbish products for resale (such as circuit
boards or computers)
(3)recycle products (such as paper)
(4)dispose of products and packaging

14-14
Designing a
Marketing Channel System
 Analyze customer needs
 Establish channel objectives
 Identify major channel alternatives
 Evaluate major channel alternatives

14-15
Service Outputs of Channels
Lot size
Waiting and delivery time
Spatial convenience
Product variety
Service backup

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Identifying Channel Alternatives
 Types of intermediaries
 Number of intermediaries
 Terms and responsibilities

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Number of Intermediaries
 Exclusive
 Selective
 Intensive

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Terms and Responsibilities
of Channel Members
 Price policy
 Condition of sale
 Distributors’ territorial rights
 Mutual services and responsibilities

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Figure 14.3 The Value-Adds
versus
Costs of Different Channels
Source: Oxford Associates, adapted from Dr. Rowland T. Moriarty. Cubex Corp.

14-20
Figure 14.4
Break-Even Cost Chart

14-21
Channel-Management Decisions
 Selecting channel members
 Training channel members
 Motivating channel members
 Evaluating channel members
 Modifying channel members

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Channel Power
Coercive
Reward
Legitimate
Expert
Referent

14-23
Channel Integration and Systems
 Vertical marketing
systems
 Corporate VMS
 Administered VMS
 Contractual VMS
 Horizontal
marketing systems
 Multichannel
systems

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Integrated Marketing Channel
System
An integrated marketing channel system is
one in which the strategies and tactics of
selling through one channel reflect the
strategies and tactics of selling through one or
more other channels.

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Figure 14.5 The Hybrid Grid

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Channel Conflict
 What types of conflict arise in channels?
 What causes conflict?
 What can marketers do to resolve it?

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Causes of Channel Conflict
 Goal incompatibility
 Unclear roles and rights
 Differences in perception
 Intermediaries’ dependence on manufacturer

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Table 14.2 Strategies for
Managing Channel Conflict
 Strategic
justification
 Dual compensation
 Superordinate goals
 Employee exchange
 Joint memberships
 Cooptation
 Diplomacy
 Mediation
 Arbitration
 Legal recourse

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E-Commerce
Pure-click
Brick-and-click

14-30
M-Commerce

14-31
For Review
 What is a marketing channel system and value
network?
 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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