MANAGING MARKETING CHANNELS

Channel functions and flows

Gather information
Communication
Agreement
Order
Finance inventories
Risk
Successive storage and movement
Finance for buyers payment
Transfer of ownership
Channel levels

Analyzing customers’ desired service:

•Lot size
•Waiting time
•Convenience
•Product variety
•Service backup

Establishing objectives and constraints

Identifying major channel alternatives:
•Types of intermediaries (company sales force,
manufacturers’ agent, industrial distributors, OEM
market, dealer market)

• Number of intermediaries (intensive distribution,

selective distribution, exclusive distribution)

•Terms and responsibilities (price policy, payment

terms, territorial rights, mutual services and
responsibilities
EVALUATING THE MAJOR ALTERNATIVES:

Economic criteria

Control criteria

Adaptive criteria
CHANNEL MANAGEMENT DECISIONS
Selecting channel members

Training channel members

Motivating channel members (coercive power,

reward power, legitimate power, expert power,
referent power)

Evaluating channel members

Modifying channel arrangements

Conflict, cooperation and competition
Vertical Marketing Systems

 Corporate
 common ownership at different channel levels
 Contractual
 contractual agreement among channel members
 Administered
 leadership assumed by dominant members
Innovations in Marketing Systems

Horizontal
HorizontalMarketing
Marketing Hybrid
HybridMarketing
Marketing
System
System System
System

Two or more companies A single firm sets up two

at one channel level join or more marketing
together to increase channels to increase
coverage coverage
Example:Banks in Example:Retailers,
Grocery Stores Catalogs, and Sales
Force
 Evaluating
Evaluating the
the Major
Major Alternatives
Alternatives
Exclusive
Exclusive Selective
Selective Intensive
Intensive
Distribution
Distribution Distribution
Distribution Distribution
Distribution
Identifying
Identifying Major
Major Alternatives
Alternatives
Setting
Setting Channel
Channel Objectives
Objectives &
& Constraints
Constraints
Analyzing
Analyzing Consumer
Consumer Service
Service Needs
Needs
Channel Design
Channel Decisions
Design Decisions