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ƥ A set of interdependent organizations

involved in the process of making a
product or service available for use or
consumption by the consumer or business
user.

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These functions should be assigned to the channel
member who can add the most value for the cost

Information Negotiation

Physical
Promotion
Distribution

aontact Financing

Matching Risk Taking

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ƥ The channel will be most effective when:
ƛ each member is assigned tasks it can do best.
ƛ all members cooperate to attain overall channel
goals.
ƥ If this does not happen, conflict occurs:
ƛ Horizontal Conflict occurs among firms at the same
level of the channel (e.g., retailer to retailer).
ƛ Vertical Conflict occurs between different levels of
the same channel (e.g., wholesaler to retailer).
ƥ Some conflict can be healthy competition.
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rhen it decided to sell its familiar containers at retail through Target stores,
Tupperware avoided conflicts with its army of in-home sales consultants by inviting
them into the stores to demonstrate the products. i

   
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aorporate VMS
aommon Ownership at Different High
Levels of the ahannel (e.g., Sears)

aontractual VMS
aontractual Agreements Among aontrol
ahannel Members (e.g., Aa Hardware)

Administered VMS
Low
Leadership is Assumed by One or
a Few Dominant Members (e.g., Kraft)
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Horizontal Marketing Hybrid Marketing

System System

Two or more A single firm sets up

companies at one two or more marketing
channel level join channels to reach one
together to follow a or more customer
new marketing segments.
opportunity.

ample: Retailers

ample: Banks in and catalogs
grocery stores

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ƥ Intensive distribution

ƥ
clusive distribution

ƥ Selective distribution

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