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Marketing Channels

Marketing Channels. 12. How Channel Members Add Value. Information Promotion Contact Matching. Nature & Importance of Marketing Channels. Key Functions Performed by Channel Members. Negotiation Physical Distribution Financing Risk taking. Consumer Marketing Channels.

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Marketing Channels

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  1. Marketing Channels 12

  2. How Channel Members Add Value

  3. Information Promotion Contact Matching Nature & Importance of Marketing Channels Key Functions Performed by Channel Members Negotiation Physical Distribution Financing Risk taking

  4. Consumer Marketing Channels

  5. Business Marketing Channels

  6. Nature & Importance of Marketing Channels • Number of Channel Levels • The number of intermediary levels indicates the length of a marketing channel. • Direct Channels • Indirect Channels • Producers lose more control and face greater channel complexity as additional channel levels are added.

  7. Physical Flow Payment Flow Nature & Importance of Marketing Channels Channel Members Are Connected Via A Variety of Flows Information Flow Promotion Flow Flow of Ownership

  8. Channel Behavior and Organization • Channel Conflict • Occurs when channel members disagree on roles, activities, or rewards. • Types of Conflict: • Horizontal conflict: occurs among firms at the same channel level • Vertical conflict: occurs among firms at different channel levels

  9. Conventional Versus Vertical Marketing System

  10. Channel Behavior and Organization • Vertical Marketing Systems • Corporate VMS • Contractual VMS • Manufacturer-sponsored retailer franchise system • Manufacturer-sponsored wholesaler franchise system • Service-firm-sponsored retailer franchise system • Administered VMS

  11. Channel Behavior and Organization • Horizontal Marketing Systems • Two or more companies at one level join together to follow a new marketing opportunity. Nestle and General Mills work together to market cereal outside of North America

  12. Channel Design Decisions Identifying Major Alternatives • Number of marketing intermediaries • Intensive distribution • Selective distribution • Exclusive distribution • Responsibilities of channel members

  13. Number ofintermediaries Few Many Number of Outlets INTENSIVE EXCLUSIVE SELECTIVE

  14. Public Policy and Distribution Decisions • Exclusive distribution • Only certain outlets are allowed to carry a firm’s products • Exclusive dealing • Exclusive territorial agreements • Tying agreements

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