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Marketing Channel

Marketing Channel

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Published by Vikram Panwar

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Published by: Vikram Panwar on Feb 22, 2011
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04/11/2015

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Designing and Managing Integrated Marketing Channels

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

15-1

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?
Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 15-2

Raymond presents world-class experience through its stores Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 15-3 .

Ltd. Copyright © 2009 Dorling Kindersley (India) Pvt.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. 15-4 .

promotion. trade promotion money. 15-5 . Ltd. and other forms of communication to persuade consumers to demand the product from intermediaries. promote.Channels and Marketing Decisions ‡ A push strategy uses the manufacturer¶s sales force. and other means to induce intermediaries to carry. and sell the product to end users. Copyright © 2009 Dorling Kindersley (India) Pvt. ‡ A pull strategy uses advertising.

Ltd. 15-6 .Categories of Buyers Habitual shoppers High value deal seekers Variety-loving shoppers High-involvement shoppers Copyright © 2009 Dorling Kindersley (India) Pvt.

customer service.Why Are Intermediaries used? ‡ Provide financial resources to take title up front ‡ Direct marketing may require producer to become middleman for complimentary products (Wrigley Ex. 15-7 . as overheads are high in distribution ‡ Reach / availability of products to customers ‡ Reduces amount of work needed for Copyright © 2009 Dorling Kindersley (India) Pvt.) ‡ More ROI from production. Ltd.

Ltd. 15-8 .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 Copyright © 2009 Dorling Kindersley (India) Pvt.

Ltd.Marketing Channel Flows Copyright © 2009 Dorling Kindersley (India) Pvt. 15-9 .

Ltd.Consumer Marketing Channels Copyright © 2009 Dorling Kindersley (India) Pvt. 15-10 .

15-11 .Designing a Marketing Channel System Analyze customer needs Establish channel objectives Identify major channel alternatives Evaluate major channel alternatives Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Establish channel objectives ‡ ‡ ‡ ‡ ‡ Product Characteristics Middleman Characteristics Competitive Characteristics Company Characteristics Environmental Characteristics Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 15-12 .

Ltd.Identifying Channel Alternatives Types of intermediaries Number of intermediaries Terms and responsibilities Copyright © 2009 Dorling Kindersley (India) Pvt. 15-13 .

Ltd.Number of Intermediaries Exclusive Selective Intensive Copyright © 2009 Dorling Kindersley (India) Pvt. 15-14 .

Terms and Responsibilities of Channel Members ‡ ‡ ‡ ‡ Price policy Condition of sale Distributors¶ territorial rights Mutual services and responsibilities Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 15-15 .

Ltd.Channel Service Outputs Lot size Waiting/delivery time Spatial convenience Product variety Service backup Copyright © 2009 Dorling Kindersley (India) Pvt. 15-16 .

Costs of Different Channels Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.The Value-Adds vs. 15-17 .

Break-Even Chart for the Choice Between a Company Sales Force and Manufacturer¶s Sales Agency Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 15-18 .

Ltd.Channel-Management Decisions Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members Copyright © 2009 Dorling Kindersley (India) Pvt. 15-19 .

Channel Power ‡ ‡ ‡ ‡ ‡ Coercive Reward Legitimate Expert Referent Copyright © 2009 Dorling Kindersley (India) Pvt. 15-20 . Ltd.

Channel Integration and Systems Vertical marketing systems ‡ Corporate VMS ‡ Administered VMS ‡ Contractual VMS Horizontal marketing systems Multichannel systems Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 15-21 .

15-22 . ‡ Types of channel conflict ‡ Vertical ‡ Horizontal ‡ Multichannel Copyright © 2009 Dorling Kindersley (India) Pvt.What is Channel Conflict? ‡ Channel conflict occurs when one member¶s actions prevent another channel from achieving its goal. Ltd.

15-23 .Causes of Channel Conflict Goal incompatibility Unclear roles and rights Differences in perception Intermediaries¶ dependence on the manufacturer Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.

Ltd. 15-24 .Strategies for Managing Channel Conflict ‡ Adoption of superordinate goals ‡ Exchange of employees ‡ Joint membership in trade associations ‡ ‡ ‡ ‡ ‡ Cooptation Diplomacy Mediation Arbitration Legal recourse Copyright © 2009 Dorling Kindersley (India) Pvt.

15-25 . Ltd.e-Commerce Marketing Practices ‡ Pure-click ‡ Brick-and-click Copyright © 2009 Dorling Kindersley (India) Pvt.

Buyer Expectations for Channel Integration ‡ Ability to order a product online and pick it up at a convenient retail location ‡ Ability to return an onlineordered product to a nearby store ‡ Right to receive discounts based on total online and offline purchases Copyright © 2009 Dorling Kindersley (India) Pvt. 15-26 . Ltd.

Rural Distribution Innovative Distribution Channels for Rural Markets ‡ Hub and Spoke Model ‡ Mobile shops and offices ‡ Linkage with community based organizations (SHGs. and cooperatives Traditional Channels for Reaching Out to Rural Customers ‡ Haats ‡ Mandis ‡ Melas Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. NGOs. 15-27 .

15-28 .  How have they integrated their channel system?  How would you like their channels to be integrated?  Do you use multiple channels from them? Why? Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd.Marketing Discussion  Think of your favorite retailers.

Ltd. Channel images do not really affect the brand images of the products they they sell that much. 15-29 . or 2.Marketing Debate  Does it matter where you are sold? Take a position: 1. Copyright © 2009 Dorling Kindersley (India) Pvt. Channel images must be consistent with the brand image.

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