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Designing the Marketing Channel

Channel Design . . 6. . Objective 1:. . . . Decisions involving the development of new marketing channels either where none had previously existed or to the modification of existing channels. Channel Design:. . . . . . 6. . . . . . . . . . . . Channel Design. . A decision made by the marketer

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Designing the Marketing Channel

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    1. Chapter 6 Designing the Marketing Channel

    2. Channel Design

    3. Channel Design A decision made by the marketer The creation or modification of channels The active allocation of distribution tasks in an attempt to develop an efficient structure The selection of channel members A strategic tool for gaining a differential advantage

    4. Who Engages in Channel Design?

    5. Channel Design Paradigm

    6. When to Make a Channel Design Decision Developing a new product or product line Aiming an existing product at a new market Making a major change in some other component of the marketing mix Establishing a new firm Adapting to changing intermediary policies that may inhibit attainment of distribution objectives Dealing with changes in availability of particular kinds of intermediaries Opening up new geographic marketing areas Facing the occurrence of major environmental changes Meeting the challenge of conflict or other behavioral problems Reviewing and evaluating

    7. Distribution Objectives

    8. The Need for Congruency

    9. Distribution Tasks

    10. Channel Structure Dimensions

    11. Number of Levels Range from two to five or more Number of alternatives is limited to two or three choices Limitations result from the following factors: Particular industry practices Nature & size of the market Availability of intermediaries

    12. Intensity at the Various Levels

    13. Types of Intermediaries Numerous types Manager’s emphasis on types of distribution tasks performed by these intermediaries Watch emerging types Electronic online auction firms (eBay) Industrial products sold in B2B markets (Chemdex, Converge.com)

    14. Variables Affecting Channel Structure Market Variables Product Variables Company Variables Intermediary Variables Environmental Variables Behavioral Variables

    15. Market Variables

    16. Product Variables Bulk & Weight Perishability Unit Value Degree of Standardization Technical versus Nontechnical Newness

    17. Company Variables

    18. Intermediary Variables

    19. Environmental Variables

    20. Behavioral Variables

    21. Heuristics in Channel Design Benefit Fairly simple prescriptions for channel structure Limitation Mostly useful as rough guide to decision making

    22. Choosing an Optimal Channel Structure

    23. Approaches for Choosing Channel Structure “Characteristics of Goods & Parallel Systems” Approach Financial Approach Transaction Cost Analysis Approach Management Science Approaches Judgmental-Heuristic Approach

    24. Judgmental-Heuristic Approaches

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