MANAGING

MARKETING
CHANNELS AND
WHOLESALING

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

You can eliminate the middleman but you
can not eliminate its functions

• Defining Marketing Channels of

Distribution

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Marketing intermediaries

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 NATURE AND IMPORTANCE
OF MARKETING CHANNELS

• Value Created by Intermediaries

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

How intermediaries minimize transactions

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Marketing channel functions performed by
intermediaries

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL STRUCTURE
AND ORGANIZATION

• Marketing Channels for Consumer

Goods and Services
 Direct channel
 Indirect channels

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Common marketing channels for consumer marketing

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Common marketing channels for business marketing

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Representative electronic marketing channels

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL STRUCTURE
AND ORGANIZATION

• Direct Marketing Channels

• Multiple Channels and Strategic
Alliances
 Dual distribution
 Strategic channel alliances

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Nestlé and General Mills
Food industry’s first strategic alliance

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL STRUCTURE
AND ORGANIZATION

• A Closer Look at Channel Intermediaries

• Merchant Wholesalers
• Agents and Brokers
 Manufacturer’s agents
 Selling agents
 Brokers
• Manufacturer’s Branches and Offices

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL STRUCTURE
AND ORGANIZATION

• Vertical Marketing Systems and

Channel Partnerships

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Types of vertical marketing systems

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL STRUCTURE
AND ORGANIZATION

• Vertical Marketing Systems and Channel

Partnerships
• Corporate Systems
• Contractual Systems
 Franchising
• Administered Systems
• Channel Partnerships

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL CHOICE
AND MANAGEMENT

• Factors Affecting Channel Choice and

Management
• Environmental Factors
• Consumer Factors
• Product Factors
• Company Factors

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 CHANNEL CHOICE
AND MANAGEMENT

• Channel Design Considerations

• Target Market Coverage
 Intensive distribution
 Exclusive distribution
 Selective distribution
• Satisfying Buyer Requirements
• Profitability
• Global Dimensions of Marketing
Channels
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
 CHANNEL CHOICE
AND MANAGEMENT

• Channel Relationships: Conflict,

Cooperation, and Law
• Conflict in Marketing Channels
 Disintermediation
• Cooperation in Marketing Channels
 Channel captain
• Legal Considerations

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Channel strategies and practices affected by legal
restrictions

© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin