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Chapter 17

Chapter 17. Designing And Managing Integrated Marketing Channels. Learning Objectives. 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?

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Chapter 17

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  1. Chapter 17 Designing And Managing Integrated Marketing Channels

  2. Learning Objectives • 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?

  3. Learning Objectives • What are the key channel issues in e-commerce? • What are the key channel issues in m-commerce? • How should companies manage channel conflict?

  4. Marketing Channelsand Value Networks • Marketing channels • Sets of interdependent organizations participating in the process of making a product or service available for use or consumption • Intermediaries: merchants, agents, and facilitators

  5. Marketing Channelsand Value Networks • A marketing channel system • The particular set of marketing channels a firm employs • Push vs. pull strategy

  6. Marketing Channelsand Value Networks • Multichannel marketing • Using two or more marketing channels to reach customer segments in one market area • Omnichannel marketing • Integrated marketing channel system

  7. Figure 17.1The Hybrid Grid

  8. Marketing Channelsand Value Networks • Value network • Asystem of partnerships and alliances that a firm creates to source, augment, and deliver its offerings • Demand chain planning

  9. Marketing Channelsand Value Networks • The digital channels revolution • Customer support in store/online/phone • Check online for product availability at local stores • Order product online to pick up at store • Return a product purchased online to a nearby store

  10. The Role ofMarketing Channels • Channel functions and flows

  11. Figure 17.2Marketing Flows For Forklift Trucks

  12. The Role ofMarketing Channels • Channel levels • Zero-level channel (direct) • One/two/three-level channels (intermediaries) • Reverse-flow channels • Service sector channels

  13. Figure 17.3Consumer/Industrial Marketing Channels

  14. Channel-Design Decisions • Analyzing customer needs and wants • Desired lot size • Waiting and delivery time • Spatial convenience • Product variety • Service backup

  15. Channel-Design Decisions • Establishing objectives and constraints

  16. Channel-Design Decisions • Identifying major channel alternatives Types of intermediaries Number of intermediaries Terms/responsibilities of channel members

  17. Identifying major channel alternatives • Number of intermediaries • Exclusive distribution • Selective distribution • Intensive distribution

  18. Identifying Major Channel Alternatives • Terms and responsibilities of channel members • Price policy • Conditions of sale • Distributors’ territorial rights • Mutual services and responsibilities

  19. Channel-Design Decisions • Evaluating major channel alternatives • Economic criteria • Control and adaptive criteria

  20. Figure 17.5Break-Even For Sales Forcevs. Sales Agency

  21. Channel-Management Decisions Selecting channel members Training channel members Evaluating channel members Global channelconsiderations Channel modification decisions Modifying channel design

  22. Training and Motivating Channel Members • Channel power Coercive Reward Legitimate Expert Referent

  23. Training and Motivating Channel Members • Channel partnerships and ECR practices • Demand-side management • Supply-side management • Enablers and integrators

  24. Channel Integration and Systems • Conventional marketing channel • Vertical marketing systems • Horizontal marketing systems

  25. VerticalMarketing Systems • Corporate VMS • Administered VMS • Contractual VMS • Wholesaler-sponsored voluntary chains • Retailer cooperatives • Franchise organizations • New competition in retailing

  26. E-CommerceMarketing Practices • E-commerce • Uses a Web site to transact or facilitate the sale of products and services online • Pure-click vs. brick-and-click companies

  27. M-CommerceMarketing Practices • Mobile channels and media can keep consumers as connected and interacting with a brand as they choose • Advertising and promotion • Geofencing • Privacy issues

  28. Conflict, Cooperation,and Competition • Channel conflict • Generated when one channel member’s actions prevent another channel member from achieving its goal • Channel coordination • Occurs when channel members are brought together to advance the goals of the channel instead of their own potentially incompatible goals

  29. Conflict, Cooperation,and Competition • Types of conflict and competition Horizontal channel conflict Vertical channel conflict Multichannel conflict

  30. Conflict, Cooperation,and Competition • Causes of channel conflict • Goal incompatibility • Unclear roles and rights • Differences in perception • Intermediaries’ dependence on • manufacturer

  31. Conflict, Cooperation,and Competition

  32. Conflict, Cooperation,and Competition • Dilution and cannibalization • Marketers must be careful not to dilute their brands through inappropriate channels • Legal and ethical issues in channel relations • Exclusive dealing/territories, tying agreements, and dealers’ rights

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