This document discusses marketing channel flows including product, promotion, information, ownership, and negotiation flows. It also discusses factors that determine the role of intermediaries such as specialization and division of labor as well as contractual efficiency. An example is given of Granada Guitar Co.'s negotiation efforts and costs to distribute a new guitar line through 500 music stores. Finally, it introduces the concepts of channel structure versus ancillary structure and asks questions about why single channels are currently rare and why managing ancillary structure is likely less complex than managing channel structure.

1. Objective 4: 1
Marketing Channel Flows
Product Flow
Promotion Flow
Information Flow
Ownership Flow
Negotiation Flow

2. 1
Product Flow
Manufacturer
Transportation Company
Wholesalers
Retailers
Consumers

3. 1
Manufacturer
Wholesalers
Retailers
Consumers
Negotiation Flow

4. Ownership Flow
1
Manufacturer
Wholesalers
Retailers
Consumers

5. Information Flow
1
Manufacturer
Wholesalers
Retailers
Consumers
Transportation Company

6. Promotion Flow
1
Manufacturer
Wholesalers
Retailers
Consumers
Advertising Agency

7. Distribution through intermediaries
Objective 5:
1
Technology the Internet
Economic Specialization &
Considerations Division of Labor
Contactual Efficiency
Factors that determine the role of intermediaries

8. 1
Specialization & Division of Labor
Distribution Tasks Production Tasks
Distributed
interorganizationally
Distributed
intraorganizationally

9. Contactual Efficiency
Granada Guitar Co.
1
Negotiation Effort Estimated Dollar Costs
of Inputs
Distribution
Objective
(Output)
Contactual
Efficiency
100 sales visits
100 phone calls
20 magazine
ads
@ $50 = $5,000
@ 3 = 300
@1,000 = 20,000
$25,300
Get 500 music
stores to carry
new guitar
line
Negotiation
effort in dollar
terms relative
to achieving
the distribution
objective =
$25,300

10. Objective 6:
1
Channel Structure v. Ancillary Structure
Channel Structure
The group of channel members to which a
set of distribution tasks has been allocated
Ancillary Structure
The group of institutions that
assist channel members in performing
distribution tasks
Why are single-
channel
structures currently
the exception?
Why is managing the
ancillary structure
most likely to be less
complex than
managing the channel
structure?