This document provides a summary of chapters 13-14 from the textbook and chapter 8 from another source. It discusses key topics such as marketing channels, designing channel systems, managing intermediaries, and trends in retailing including the growth of e-commerce and mobile commerce. Major types of retailers and wholesalers are defined. The document also examines supply chain management, private label brands, and multichannel marketing strategies.

1. BMGT 411: Week #9
Kottler:
Chapters 13 - Integrated Marketing Channels
Chapter 14 - Retailing, Wholesaling, and Logistics
Wood:
Chapter 8 - Channel and Logistic Strategy
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2. BMGT 411: Chapter 13
Designing and Managing Integrated Marketing Channels
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3. Chapter Questions
• What is a marketing channel system and value network?
• What work do marketing channels perform?
• What decisions do companies face in designing, managing, and integrating
their channels?
• What key issues do marketers face with e-commerce and m-commerce?
3

4. 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.
• The set of pathways a product or service follows after production,
culminating in purchase and consumption of the final end user
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5. Path to Supermarket
http://www.youtube.com/watch?
v=CAbFLBM6uHM
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6. Channels and
Marketing Decisions
• A push strategy uses the manufacturer’s sales force, trade promotion money,
and other means to induce intermediaries to carry, promote, and sell the
product to end users
• A pull strategy uses advertising, promotion, and other forms of
communication to persuade consumers to demand the product from
intermediaries
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7. Push Strategy
Example: Paying for
Shelf Space
http://www.youtube.com/watch?
v=pDxSX-BAs0U
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8. Pull Strategy
Example: Advertising
and Branding
Apple iPhone and Carriers
8

9. Multi-Channel Marketing
• When a single firm uses two or more marketing channels to reach customer
segments
• 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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10. Table 13.1 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
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11. Figure 13.1 Marketing
Flows
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12. Figure 13.2 Consumer
Markets
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13. Figure 13.2 Consumer
Markets
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14. Figure 13.2 Consumer
Markets
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15. Figure 13.2 Industrial
Markets
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16. Reverse-Flow Channels
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17. Designing a
Marketing Channel System
• Analyze customer needs: based on price, product assortment, and
convenience, as well as shopping goals
• Establish channel objectives: Maximizing the desired level of output while
also reducing costs
• Identify major channel alternatives: The types of intermediaries, the number
needed, and terms and responsibilities of each
• Evaluate major channel alternatives: Comparing the costs of each channel
and customer expectations to decide on the best one
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18. Identifying Channel Alternatives
 Types of intermediaries:
 Merchants or Retailers: Buy take title of goods and resell
 Example: Mass Market Stores, Grocery Stores, etc
 Agents, Brokers, Sales Agents: Negotiating on the producers behalf,
but not taking ownership of the product
 Travel agencies, Financial Consultants
 Facilitators: Assist in getting the product to market, but do not take
ownership nor assist in the sales
 Trains, Trucking, Warehousing, etc
 Number of intermediaries
 Terms and responsibilities
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19. Identifying Channel Alternatives
 Number of intermediaries:
 Exclusive: Severely limiting the intermediaries, controlling the service
levels and outputs
 Ex. Product’s like Tiffany, sold only in their stores
 Selective: Gaining adequate market coverage by being selective
about who carries your product
 Ex. Whole Foods Vendors
 Intensive Distribution: Offering product in as many places as
possible, often in convenience goods
 Ex. Soft Drinks

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20. Figure 13.3 The Value-
Adds versus
Costs of Different
Channels
C
B
A
20

21. Channel-Management Decisions
• Selecting channel members: Negative experience at intermediary can cause a
negative reaction at the company
• Training channel members: The power has shifted in most cases from
producers to intermediaries
• Evaluating channel members: Constant evaluation of most profitable
intermediaries, reducing and adding intermediaries by Modifying channel
members over time
• Consolidation of stores
• Shifting to direct selling
21

22. P&G eStore
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23. Different Types of Companies and Intermediaries
• Wal Mart
• Starbucks
• Amazon
• Giant Eagle
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24. Channel Conflict (Page 208)
• What types of conflict arise in
channels?
• What causes conflict?
• Goal incompatibility
• Unclear roles and rights
• Differences in perception
• Intermediaries’ dependence on
manufacturer
• What can marketers do to resolve
it?
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25. E-Commerce
• Pure Click: No Physical Stores
• Brick and Click: Existing companies adding an online component
• M-Commerce: Selling directly to customers on smartphones and tablets
• Have any of you purchased something on your smartphone?
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26. M Commerce Trends
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27. M Commerce Trends
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28. M Commerce Trends
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29. BMGT 411: Chapter 14
Managing Retailing, Wholesaling, and Logistics
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30. Chapter Questions
• What major types of marketing intermediaries occupy this sector and what
marketing decisions do they face?
• What are the major trends with marketing intermediaries?
• What does the future hold for private label brands?
30

31. Table 14.1 Major Retailer Types
• Specialty store
• Department store
• Supermarket
• Convenience store
• Discount store
• Off-price retailer
• Superstore
• Catalog showroom
• Club
• Drug Stores
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32. Speciality Store
Narrow Product Lines
Lower Volume, Higher Margins
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33. Department Stores
Several Product Lines
High Volume/High Margins
(Depends on Store)
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34. Grocery Store
High Volume/Low Margin
Often Regional due to
Distribution Limitations
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35. Drug Stores
Lower Volume/Higher Margins
Convenient Locations
35

36. Convenience Stores
High Volume/Mixed Margins
Gas = low
Food = High
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37. Superstore Mass
Retailers
Very High Sales, Very Low
Margin, Low Price
Sells Groceries + Everything
Else
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38. Superstore: Built on
Distribution Systems
Walmart distribution system
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39. Supply Chain Management
• Supply chain management starts before physical distribution and means
strategically procuring the right inputs (raw materials, components, and
capital equipment); converting them efficiently into finished products; and
dispatching them to the final destinations.
• Integrated Logistics Systems: An integrated logistics system (ILS) includes
materials management, material flow systems, and physical distribution,
aided by information technology.
• http://www.youtube.com/watch?v=SUe-tSabKag
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40. Market Logistics
• Sales forecasting
• Distribution scheduling
• Production plans
• Finished-goods inventory decisions
• Packaging
• In-plant warehousing
• Shipping-room processing
• Outbound transportation
• Field warehousing
• Customer delivery and servicing
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41. Market Logistics Decisions
• How should orders be handled?
• Where should stock be located?
• How much stock should be held?
• How should goods be shipped?
41

42. Figure 14.1 Determining Optimal Order Quantity
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43. Levels of Retail Service
• Self service: Grocery stores, etc
• Self selection: Customers can find their own goods, can ask for assistance
• Specialty stores
• Limited service: limited service based on needs
• Full service: Service every step of the way (Most expensive)
• Cars, Luxury items
43

44. Trends in Retailing: Growth of Non-Store Selling
• Direct: Avon,
• Direct: 1-800 flowers
• Automatic Vending
44

45. Table 14.2 Major Types of Corporate
Retail Organizations
• Corporate chain store: Chain stores and wholesalers owned by the same
company
• Voluntary chain: A group of retailers owned by different companies that use
one wholesaler (IGA Group)
• Franchise organization: Independently owned, pay a fee to be part of the
franchise system. Reduction in marketing costs because of scale
(McDonald’s, Jiffy Lube)
• Merchandising conglomerate: Combines several retailing lines under one
central ownership group
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46. Top Retailing Trends
• Entering Urban Areas
• Getting smaller
• Temporary Stores, or pop up stores
• Integrating technology into the experience
• http://www.youtube.com/watch?v=qJWcX3huiZs
46

47. Urban Store Trend East Liberty Target/New York
Aldi
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48. Walmart - Getting
Smaller?
Walmart Express
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49. Pop Up Stores Starbucks
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50. Retailers’ Marketing Decisions
• Target market
• Product assortment
• Procurement
• Prices
• Services
• Store atmosphere
• Store activities
• Store experiences
• Communications
• Location
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51. Store Atmosphere and
Experiences
Bass Pro Shops
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52. Target Market Gap Inc
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53. Private Label Brands
• Private Label Brand: a brand that retailers or wholesalers develop
• Consumer accepts private labels
• Private-label buyers come from all socioeconomic strata
• Private labels are not a recessionary phenomenon
• Consumer loyalty shifts from manufacturers to retailers
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54. Private Label Brands are Often Manufactured by the Same Company
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55. Clean and Unique Style
Target’s Up and Up
Brand
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56. Aldi - Only Sells Private
Label
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57. Wood Chapter 8: Key Take Aways
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58. Multichannel
Marketing
• “Multichannel marketing” or
OmniChannel puts the
emphasis on providing a range
of choices for customers who
buy through different channels
at different times or for different
reasons.
• http://www.lincoln.com/
concierge-about/
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59. BMGT 411: Preparing for Week 10
• Review Chapter Notes:
• Kottler:
• Chapters 15 - Managing Integrated Marketing Communications
• Chapter 10 - Planning Metrics for Marketing
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