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Designing and Managing Integrated Marketing Channels

Explore essential concepts in designing and managing integrated marketing channels with a focus on Philips Electronics. Learn about distribution, value networks, push and pull strategies, channel design decisions, and conflict management strategies. Discover the impact of e-business and e-commerce on marketing practices. Gain insights into channel management decisions, vertical and horizontal marketing systems, and multichannel marketing. Uncover the secrets behind successful marketing strategies at one of the world's biggest electronics companies.

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Designing and Managing Integrated Marketing Channels

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  1. Designing and Managing Integrated Marketing Channels Key Concepts

  2. Marketing Management at Royal Philips Electronics One of the world’s biggest electronics companies and Europe’s largest, with sales of over $36 billion. Secret of RPE’s success is Distribution

  3. Marketing Channels and Value Networks • Marketing channels—sets of interdependent organizations involved in the process of making a product or service available for use or consumption. • Value network—a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings.

  4. Push Sales force and trade promotion Pull Advertising and promotion Push and Pull Strategies

  5. Marketing Flows

  6. Commonalities Among All Channel Functions • They use up scarce resources • They can often be performed better through specialization • They can be shifted among channel members

  7. Consumer and Industrial Marketing Channels

  8. Channel-Design Decisions • Analyze customers’ desired service output levels • Establish objectives and constraints • Identify major channel alternatives • Evaluate the major alternatives

  9. Analyzing Customers’ Desired Service Output Levels Lot size Waiting and delivery time Spatial convenience Product variety Service backup

  10. Establishing Objectives and Constraints • State channel objectives in terms of targeted service output levels. • Objectives vary with product characteristics. • Environmental factors: • Competitors’ channels • Economic conditions • Legal regulations and restrictions

  11. Identifying Major Channel Alternatives • Types of intermediaries • Merchants • Facilitators • Number of intermediaries • Exclusive • Selective • Intensive • Terms and responsibilities of channel members • Price policy • Conditions of sale • Distributors’ territorial rights • Mutual services and responsibilities

  12. Evaluating the Major Alternatives Determine whether own sales force or a sales agency will produce more sales. Estimate the costs of selling different volumes through each channel.

  13. The Value-Adds vs. Costs of Different Channels

  14. Channel-Management Decisions • Selecting channel members • Training and motivating channel members • Evaluating channel members • Modifying channel arrangements

  15. Vertical marketing system Horizontal marketing system Multichannel marketing systems Channel Integration and Systems

  16. Corporate VMS Administered VMS Contractual VMS Vertical Marketing Systems (VMS)

  17. Wholesaler-sponsored voluntary chains Retailer cooperatives Franchise organizations Contractual VMSs

  18. Horizontal Marketing Systems Two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity.

  19. Integrated Multichannel Marketing Systems Multichannel marketing Occurs when a single firm uses two or more marketing channels to reach one or more customer segments. Integrated marketing channel system Strategies and tactics of selling through one channel reflect the strategies and tactics of selling through other channels.

  20. Conflict and Cooperation Channel conflict Generated when one channel member’s actions prevent another channel member from achieving its goals. Channel coordination Channel members are brought together to advance the goals of the channel.

  21. Vertical Multichannel Types of Conflict

  22. Goal incompatibility Unclear roles and rights Differences in perception Dependence Causes of Channel Conflict

  23. Strategies for Managing Channel Conflict • Adoption of superordinate goals • Exchange of employees • Joint membership in trade associations • Co-optation • Diplomacy, mediation, or arbitration • Legal recourse

  24. Exclusive dealing Exclusive territories Tying agreements Dealers’ rights Legal and Ethical Issues in Channel Relations .

  25. E-business E-commerce E-purchasing E-marketing Impact of Internet on Marketing Practices

  26. Breakthrough Marketing: Amazon Started as a bookseller, now a $10 billion company!

  27. Pure-Click Companies • Search engines • Internet service providers (ISPs) • Commerce sites • Transaction sites • Content sites • Enabler sites

  28. Supplier Web sites Infomediaries Market makers Consumer communities Internet Sources of Information

  29. Brick-and-Click Companies • Strategies for gaining acceptance from intermediaries when selling through intermediaries and online: • Offer different brands or products on the Internet. • Offer offline partners higher commissions to cushion the negative impact on sales. • Take orders on the Web site but have retailers deliver and collect payment.

  30. Convenience – 24/7 Ease of use Trust Availability Why E-Commerce Succeeds

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