Designing and Managing

Integrated Marketing
Channels
Baclay | Estabaya | Lopez
 TOPICS

1.) Marketing Channels and Value Networks

2.) The Role of Marketing Channels
3.) Channel-Design Decisions
4.) Channel-Management Decisions
5.) Channel Integration and Systems

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Successful value creation needs successful value delivery.

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 1

Marketing Channels and

Value Networks
 Marketing Channels

These are sets of interdependent organizations involved in the process of making a

product or service available for use or consumption.

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 Importance of Channels
• Converting potential buyers into profitable orders
• Not just serve markets, they must also make markets.
• Company’s pricing depends on whether it uses mass-merchandisers or high-quality
boutiques.
• Firm’s sales force and advertising decisions depend on how much training and
motivation dealers need.
• Channel decisions involve relatively long-term commitments to other firms as well
as a set of policies and procedures.

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How channels reduces the time and expenditure of
manufacturers

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 Push vs. Pull Marketing
⋆ Push strategy
⋆ manufacturer induces intermediaries to carry, promote, and sell
the product to end user

⋆ Pull strategy
⋆ manufacturer using induces consumers to ask intermediaries for
the product
 Hybrid Channels /
Multichannel Marketing
⋆ Occurs when a single firm two or more marketing channels
 Understanding Customer Needs

• Habitual shoppers
• High value deal seekers
• Variety-loving shoppers
• High-involvement shoppers
 Value Networks
• A system of partnerships and alliances that a firm creates to source, augment,
and deliver its offerings the company lies at its center.
 Demand chain planning
• A supply chain view of a firm sees markets as destination points and amounts to
a linear view of the flow.
 2

The Role of
Marketing Channels
 The Role of Marketing Channels
• 1. Many producers lack the financial resources to carry out direct marketing.
• 2. Help producers increasing investment in their main business.
• 3. In some cases, direct marketing simply is not feasible.
• 4. Making goods widely available and accessible to target markets.
• 5. Intermediaries contacts, experiences, specialization, and scale of operations,
usually offer the firm more than it can achieve on its own.
 Channel Functions and Flows

A manufacturer selling a physical product and services

might require three channels:

• sales channel
• delivery channel
• service channel

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Channel Levels

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 Direction of flow

⋆ Forward movement
⋆ Reverse-flow channels

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 Service Sector Channels

⋆ Marketing channels are not limited to the

distribution of physical goods.
⋆ As the Internet and other technologies
advance, service industries are operating
through new channels.

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 3

Channel Design Decisions

 Channel Design Decisions

⋆ Analyzing Customers’ Desired Service Output Levels

⋆ Establishing Objectives and Constraints
⋆ Identifying and Evaluating Major Channel Alternatives
⋆ Evaluating the Major Alternatives

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Analyzing Customers’ Desired Service Output
Levels

⋆ Channels produce five service outputs:

⋆ 1. Lot size: min qty
⋆ 2. Waiting and delivery time
⋆ 3. Spatial convenience: geographic coverage
⋆ 4. Product variety
⋆ 5. Service backup

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 Establishing Objectives and Constraints

⋆ 1. Channel institutions should minimize total channel costs and

still provide desired levels of service outputs.
⋆ 2. Planners can identify several market segments.
⋆ 3. Channel objectives vary with product characteristics.
⋆ 4. Channel design must take into account the strengths and
weaknesses of different types of intermediaries.

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 ⋆ sales forces
⋆ Agents
Identifying and ⋆ Distributors
Evaluating Major ⋆ Dealers
Channel Alternatives ⋆ direct mail
⋆ Telemarketing
⋆ the Internet

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 Number of Intermediaries

⋆ Exclusive distribution
⋆ Selective distribution
⋆ Intensive distribution

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 Terms and Responsibilities of Channel Members

1. Price policy
2. Conditions of sale
3. Distributors’ territorial rights
4. Mutual services and responsibilities

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 Evaluating the Major Alternatives
⋆ Economic Criteria: Each channel will produce a
different level of sales and costs.
⋆ Control and Adaptive Criteria: Using a sales
agency poses a control problem. To develop a
channel, members must make some degree of
commitment to each other for a specified period of
time lead to a decrease in the producer’s ability to
respond and adapt to a changing marketplace.

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 TOPICS

1.) Marketing Channels and Value Networks

2.) The Role of Marketing Channels
3.) Channel-Design Decisions
4.) Channel-Management Decisions
5.) Channel Integration and Systems

to be continued...

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http://ayemyomyintaung.blogspot.com/2013/02/designing-and-managing-integrated.html
https://www.quora.com/What-is-meant-by-upstream-and-downstream-Supply-Chain
http://docshare01.docshare.tips/files/5261/52610311.pdf
https://www.slideshare.net/Mehfuzpatel/marketing-channels-4947167
https://www.investopedia.com/terms/v/value-network.asp
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It is traditionally white with red
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 IN TWO OR THREE MERRY COLUMNS
Apple cider
This untreated cider is a
seasonally produced drink
of limited shelf-life that is
typically available only in
fall, although it is
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throughout the year.
Hot cocoa Pecan pie
Heated beverage typically Pecan pie is a pie made
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 LET’S REVIEW SOME CONCEPTS
Apple cider
This untreated cider is a seasonally
produced drink of limited shelf-life
that is typically available only in
fall, although it is sometimes frozen
for use throughout the year.
Apple cider
This untreated cider is a seasonally
produced drink of limited shelf-life
that is typically available only in
fall, although it is sometimes frozen
for use throughout the year.
Hot cocoa
Heated beverage typically
consisting of shaved chocolate,
melted chocolate or cocoa powder,
heated milk or water, and sugar.
Hot cocoa
Heated beverage typically
consisting of shaved chocolate,
melted chocolate or cocoa powder,
heated milk or water, and sugar.
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Pecan pie
Pecan pie is a pie made primarily
with corn syrup and pecan nuts.
Variations may include white or
brown sugar, sugar syrup, molasses,
maple syrup, or honey.
Pecan pie
Pecan pie is a pie made primarily
with corn syrup and pecan nuts.
Variations may include white or
brown sugar, sugar syrup, molasses,
maple syrup, or honey.
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