UNIT 9: MARKETING CHANNELS

CONTENTS

• Marketing channel basics

• Channel behavior and organization
• Logistics and supply chain management
 OBJECTIVES
Understanding:
üunderstand basic terms and expressions
related to marketing channels and
marketing logistics
üapply and develop specialist vocabulary
further
 DISCUSS

Consumers can buy Apple products online through its Apple

online store. If you were to purchase an Apple product from the
Apple online store (http://store.Apple.Com/us),
(a) What are channels members?
(b) What type of channel strategy is used by Apple?
 MARKETING CHANNEL
A set of
interdependent
organizations
that help make
a product or service
available for use or
consumption by the
consumer or business user
 MARKETING CHANNEL BASICS

• Name some types of MARKETING CHANNELS you know.

• Think of an example of a company that does not use
intermediary in their distribution channel.
THE NATURE AND IMPORTANCE OF MARKETING CHANNEL
 NUMBER OF CHANNEL LEVELS

² Channel level:
A layer of intermediaries that
performs some work in bringing the
product and its ownership closer to
the final buyer
² Direct marketing channel
Has no intermediary levels
² Indirect marketing channel
Channel containing one or more
intermediary levels
CHANNEL BEHAVIOR AND ORGANIZATION

Disagreement among marketing channel

Channel conflict
members on goals, roles and rewards

Horizontal Horizontal conflict occurs among firms at

conflict the same level of the channel

Conflict between different levels of the same

Vertical conflict
channel
 CONVENTIONAL AND VERTICAL MARKETING SYSTEM
Vertical Marketing System

producers,
A channel consisting of wholesalers, and
one or more independent retailers in the
producers, wholesalers, channel act as a
and retailers, each a unified system. One
separate business channel member
seeking to maximize its owns the others, has
own profits, perhaps even contracts with them,
at the expense of profits or has so much
for the system as a whole. power that they all
cooperate.
Comparison Vertical Marketing System Horizontal Marketing System

operates businesses in the same

Definition all businesses work on the same level.
industry.

Components manufacturer, wholesaler, & retailer. either one of these components.

Audience small audience. larger audience.

Competition Compete among each other. Do not compete among each other.

banking, real estate, hospitals, food

Examples Walmart & McDonalds
& beverages…
Multichannel distribution systems are systems in which a single firm sets
up two or more marketing channels to reach one or more customer
segments.
•Disintermediation is the cutting out of
marketing channel intermediaries by
producers or the displacement of
traditional resellers by new
intermediaries.
 Channel Design Decisions
CHANNEL DESIGN DECISIONS
Designing effective marketing channels by analyzing
customer needs, setting channel objectives,
identifying major channel alternatives, and
evaluating those alternatives

Analyzing Consumer Needs

Setting Channel Objectives

Identifying Major Alternatives

Evaluating the Major Alternatives

 MARKETING CHANNEL MANAGEMENT

Selecting, managing, and motivating individual

channel members and evaluating their
performance over time

Selecting Channel Members

Managing and Motivating
Channel Members
Evaluating Channel Members
 LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics 4.0?
1. Visibility. The logistics sector, driven by advanced technology can lead to an increase in
visibility and transparency from digitization across the entire supply chain management. Various
smart ports around the globe have begun implementing advanced solutions that give access to
real-time tracking of shipments and viewing documents, along with some mission-critical
information for freight transporters and customers.
2. Smart Utilities. The traditional logistics components have been quickly replaced by “smarter”
versions in recent times, which has largely transformed how shipments are circulated all the way
from suppliers to their end-users. Installing technological solutions like smart containers and smart
pallets into logistics utilities has transformed traditional shipping workflows.
3. IoT Adoption. Since industry 4.0 has already been introduced in the market, several IoT
development organizations have pledged to develop advanced digital devices, which can be
seamlessly deployed and embedded in warehouse facilities.
4. Industry 4.0 Integration. What stands out for Logistics 4.0 is that it is capable of
collaborating and integrating with Industry 4.0 procedures and systems. This integration would
create an environment for building a communal and synergetic relationship between all three:
shippers, manufacturers, as well as end-users.
 VIDEO CASE

AMAZON: DELIVERING
THE GOODS…MILLIONS
OF TIMES A DAY

Amazon
Video case

12-29
1. How do Amazon.com’s logistics
and supply chain management
activities help the company create
value for its customers?

12-30
2. Why will logistics and supply
chain management play an
important role in the future
success of Amazon.com?

12-31