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Designing and Managing Integrated Marketing Channels

.Chapter Questions • What is a marketing channel system and value network? • What work do marketing channels perform? • How should channels be designed? | Designing and Managing Integrated Marketing Channels Marketing Management, 13th ed 15 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? 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. 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 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 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 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 Designing a Marketing Channel System Analyze customer needs Establish channel objectives Identify major channel alternatives Evaluate major channel alternatives Channel Service Outputs Lot size Waiting/delivery time Spatial convenience Product variety Service backup Identifying Channel Alternatives Types of intermediaries Number of intermediaries Terms and responsibilities Number of Intermediaries Exclusive Selective Intensive Terms and Responsibilities of Channel Members Price policy Condition of sale Distributors’ territorial rights Mutual services and responsibilities Channel-Management Decisions Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members Channel Power Coercive Reward Legitimate Expert Referent Channel Integration and Systems Vertical marketing systems Corporate VMS Administered VMS Contractual VMS Horizontal marketing systems Multichannel systems What is Channel Conflict? 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 manufacturer Table 15.3 Strategies for Managing Channel Conflict Adoption of superordinate goals Exchange of employees Joint membership in trade associations Cooptation Diplomacy Mediation Arbitration Legal recourse