This document discusses marketing channels and channel management. It covers how distributors can reduce the number of transactions in a channel. It also discusses different types of consumer and industrial marketing channels, as well as customers' desired service levels. Additionally, it examines channel management decisions like selecting, motivating and evaluating channels. Finally, it reviews legal and ethical issues that can arise in channel relations.

1. Chapter 16 Selecting and Managing Marketing Channels Marketing Management Tenth Edition Philip Kotler

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  Manufacturer 0-level channel Wholesaler Retailer Consumer   Mfg 2-level channel Mfg 3-level channel 1-level channel Manufacturer

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

9. Break-Even Cost Chart Selling costs (dollars) Level of sales (dollars) Company sales force Manufacturer’s sales agency S B

10. Channel Management Decisions Selecting FEEDBACK Motivating Training Evaluating

11. 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

12. Conventional Distribution Channel vs. Vertical Marketing Systems Vertical marketing channel Manufacturer Retailer Conventional marketing channel Manufacturer Wholesaler Consumer Consumer Retailer Wholesaler