Chapter 17 - kisi.deu.edu.trkisi.deu.edu.tr/sumeyra.duman/MBA 5011 STR.MRK.MAN/PPT/Kotler_mm15e... · 30-Nov-17 17 Copyright © 2016 Pearson Education Ltd. 17-33. Title: Consumers

30-Nov-17

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Copyright © 2016 Pearson Education Ltd. 17-1

Chapter

17

Designing

And Managing

Integrated

Marketing

Channels


Learning Objectives

1. What is a marketing channel system and value

network?

2. What work do marketing channels perform?

3. How should channels be designed?

4. What decisions do companies face in managing

their channels?

5. How should companies integrate channels?

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Learning Objectives

6. What are the key channel issues in e-

commerce?

7. What are the key channel issues in m-

commerce?

8. How should companies manage channel

conflict?


Marketing Channels

and Value Networks• Marketing channels

– Sets of interdependent

organizations participating

in the process of making a

product or service

available for use or

consumption

– Intermediaries:

merchants, agents, and

facilitators

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Marketing Channels

and Value Networks• A marketing channel system

– The particular set of marketing channels a

firm employs

– Push vs. pull strategy


Marketing Channels

and Value Networks• Multichannel marketing

– Using two or more

marketing channels to

reach customer segments

in one market area

– Omnichannel marketing

– Integrated marketing

channel system

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Figure 17.1

The Hybrid Grid


Marketing Channels

and Value Networks• Value network

– A system of partnerships and alliances that a

firm creates to source, augment, and deliver

its offerings

– Demand chain planning

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Marketing Channels

and Value Networks• The digital channels

revolution

– Customer support in

store/online/phone

– Check online for product

availability at local stores

– Order product online to

pick up at store

– Return a product

purchased online to a

nearby store


The Role of

Marketing Channels• Channel functions and flows

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Figure 17.2

Marketing Flows For Forklift Trucks


The Role of

Marketing Channels• Channel levels

– Zero-level channel

(direct)

– One/two/three-level

channels

(intermediaries)

– Reverse-flow channels

• Service sector channels

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Figure 17.3

Consumer/Industrial Marketing

Channels


Channel-Design Decisions

• Analyzing customer needs and wants

Desired lot size

Waiting and delivery time

Spatial convenience

Product variety

Service backup

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• Establishing objectives and constraints



• Identifying major channel alternatives

Types of intermediaries

Number of intermediaries

Terms/responsibilities of

channel members

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Identifying major channel

alternatives

• Number of

intermediaries

– Exclusive

distribution

– Selective

distribution

– Intensive

distribution


Identifying Major Channel

Alternatives

• Terms and responsibilities of channel

members

Price policy

Conditions of sale

Distributors’ territorial rights

Mutual services and responsibilities

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• Evaluating major channel alternatives

– Economic criteria

– Control and adaptive criteria


Figure 17.5

Break-Even For Sales Force

vs. Sales Agency

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Channel-Management

Decisions

Selecting

channel

members

Training

channel

members

Evaluating

channel

members

Modifying

channel

design

Channel

modification

decisions

Global channel

considerations


Training and Motivating Channel

Members

Coercive

Reward

Legitimate

Expert

Referent

• Channel power

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Training and Motivating Channel

Members

• Channel partnerships

and ECR practices

– Demand-side

management

– Supply-side

management

– Enablers and

integrators


Channel Integration and

Systems

• Conventional

marketing channel

• Vertical marketing

systems

• Horizontal

marketing systems

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Vertical

Marketing Systems• Corporate VMS

• Administered VMS

• Contractual VMS

– Wholesaler-sponsored voluntary chains

– Retailer cooperatives

– Franchise organizations

• New competition in retailing


E-Commerce

Marketing Practices• E-commerce

– Uses a Web site to transact or facilitate the

sale of products and services online

• Pure-click vs. brick-and-click companies

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M-Commerce

Marketing Practices• Mobile channels and media can keep

consumers as connected and interacting

with a brand as they choose

– Advertising and promotion

– Geofencing

• Privacy issues


Conflict, Cooperation,

and Competition• Channel conflict

– Generated when one channel member’s

actions prevent another channel member from

achieving its goal

• Channel coordination

– Occurs when channel members are brought

together to advance the goals of the channel

instead of their own potentially incompatible

goals

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and Competition

• Types of conflict and competition

Horizontal channel conflict

Vertical channel conflict

Multichannel conflict



and Competition

• Causes of channel conflict

Goal incompatibility

Unclear roles and rights

Differences in perception

Intermediaries’ dependence on

manufacturer

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and Competition



and Competition

• Dilution and cannibalization

– Marketers must be careful not to dilute their

brands through inappropriate channels

• Legal and ethical issues in channel

relations

– Exclusive dealing/territories, tying

agreements, and dealers’ rights

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Documents

Chapter 17 - kisi.deu.edu.trkisi.deu.edu.tr/sumeyra.duman/MBA 5011 STR.MRK.MAN/PPT/Kotler_mm15e... · 30-Nov-17 17 Copyright © 2016 Pearson Education Ltd. 17-33. Title: Consumers