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DESIGNING AND
MANAGING
INTEGRATED
MARKETING
CHANNELS
WHAT IS A MARKETING
CHANNEL?
Marketing Channel
The particular set of interdependent
organizations involved in the
process of making a product or
service available for use or
consumption.
CHANNELS AND
MARKETING DECISIONS
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.
uses advertising, promotion, and other forms of
communication to persuade consumers to demand
the product from intermediaries.
Pull strategy
Push & pull strategy
UNDERSTANDING
CUSTOMER NEEDS
Categories of Buyers
Habitual shoppers
High value deal seekers
Variety-loving shoppers
High involvement shoppers
Types of shoppers
Service/quality customers
Price/value customers
Affinity customers
ROLE OF MARKETING
CHANNELS
Channel Member Functions
Gather information
Channel Member Functions
Gather information
Develop and disseminate persuasive communications
Channel Member Functions
Gather information
Develop and disseminate persuasive communications
Reach agreements on price and terms
Channel Member Functions
Gather information
Develop and disseminate persuasive communications
Reach agreements on price and terms
Acquire funds to finance inventories
Channel Member Functions
Gather information
Develop and disseminate persuasive communications
Reach agreements on price and terms
Acquire funds to finance inventories
Assume risks
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
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
Channel Member Functions
Provide for buyers’ payment of their bills
Channel Member Functions
Provide for buyers’ payment of their bills
Oversee actual transfer of ownership
Marketing Channel Flows Example
Consumer Marketing Channels
Industrial Marketing Channels
CHANNEL DESIGN
DECISIONS
Designing a
Marketing Channel System
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
Designing a
Marketing Channel System
Analyze customer needs
Designing a
Marketing Channel System
Analyze customer needs
Lot size
Designing a
Marketing Channel System
Analyze customer needs
Lot size
Waiting/
delivery
time
Designing a
Marketing Channel System
Analyze customer needs
Lot size
Waiting/
delivery
time
Spatial
convenience
Designing a
Marketing Channel System
Analyze customer needs
Lot size
Waiting/
delivery
time
Spatial
convenience
Product
variety
Designing a
Marketing Channel System
Analyze customer needs
Lot size
Waiting/
delivery
time
Spatial
convenience
Product
variety
Service
back up
Designing a
Marketing Channel System
Identify major channel alternatives
Types of
intermediaries
Designing a
Marketing Channel System
Identify major channel alternatives
Types of
intermediaries
Number of
intermediaries
Designing a
Marketing Channel System
Identify major channel alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities
Designing a
Marketing Channel System
Number of
intermediaries
Designing a
Marketing Channel System
Number of
intermediaries
Exclusive
Designing a
Marketing Channel System
Number of
intermediaries
Exclusive
Selective
Designing a
Marketing Channel System
Number of
intermediaries
Exclusive
Selective
Intensive
Designing a
Marketing Channel System
Identify major channel alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities
Designing a
Marketing Channel System
Terms and
responsibilities
Designing a
Marketing Channel System
Terms and
responsibilities
Price policy
Conditions of sale
Distributor’s territorial rights
Mutual services and responsibilities
The Value-Adds vs. Costs of Different
Channels
CHANNEL MANAGEMENT
DECISIONS
Channel-Management
Decisions
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
CHANNEL INTEGRATION
AND SYSTEMS
Channel Integration & Systems
Vertical marketing
systems
Horizontal
marketing systems
Multichannel
systems
Channel Integration & Systems
Vertical marketing
systems
Horizontal
marketing systems
Multichannel
systems
• Corporate VMS
• Administered VMS
• Contractual VMS
■ Channel conflict occurs when one
member’s actions prevent another
channel from achieving its goal.
■ Types of channel conflict
– Vertical
– Horizontal
– Multichannel
Causes of channel conflict
Goal incompatibility
Unclear roles and rights
Differences in perception
Intermediaries’ dependence on the manufacturer
Strategies for Managing Channel Conflict
■ Adoption of
superordinate goals
■ Exchange of
employees
■ Joint membership
in trade
associations
■ Cooptation
■ Diplomacy
■ Mediation
■ Arbitration
■ Legal recourse
E-COMMERCE
MARKETING
PRACTICES
Pure-Click Companies
those that have launched a
Web site without any
previous existence as a
firm
Brick-and-Click
Companies
existing companies that
have added an online site
for information and/or
e-commerce
THANK YOU FOR
LISTENING!

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Designing marketing channels