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Designing and Managing Integrated Marketing Channels Marketing Management, 13 th ed 15.

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Presentation on theme: "Designing and Managing Integrated Marketing Channels Marketing Management, 13 th ed 15."— Presentation transcript:

1 Designing and Managing Integrated Marketing Channels Marketing Management, 13 th ed 15

2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-2 Chapter Questions 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 and manage channel conflict? What are the key issues with e-commerce?

3 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-3 Philips Emphasizes Value Delivery

4 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-4 What is a Marketing Channel? A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption.

5 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-5 Channels and Marketing Decisions A push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users. A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries.

6 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-6 Aldi Adjusted Its Strategy for the U.S. Market

7 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-7 Buyer Expectations for Channel Integration Ability to order a product online and pick it up at a convenient retail location Ability to return an online- ordered product to a nearby store Right to receive discounts based on total online and offline purchases

8 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-8 Categories of Buyers Habitual shoppers High value deal seekers Variety-loving shoppers High-involvement shoppers

9 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-9 Types of Shoppers Service/quality customers Price/value customers Affinity customers

10 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Channel Member Functions Gather information Develop and disseminate persuasive communications Reach agreements on price and terms Acquire funds to finance inventories Assume risks Provide for storage Provide for buyers’ payment of their bills Oversee actual transfer of ownership

11 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 15.2 Marketing Channel Flows

12 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 15.3 Consumer Marketing Channels

13 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 15.3 Industrial Marketing Channels

14 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Designing a Marketing Channel System Analyze customer needs Evaluate major channel alternatives Identify major channel alternatives Establish channel objectives

15 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Channel Service Outputs Lot size Waiting/delivery time Spatial convenience Product variety Service backup

16 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Identifying Channel Alternatives Types of intermediaries Number of intermediaries Terms and responsibilities

17 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Number of Intermediaries Exclusive Selective Intensive

18 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Terms and Responsibilities of Channel Members Price policy Condition of sale Distributors’ territorial rights Mutual services and responsibilities

19 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 15.4 The Value-Adds vs. Costs of Different Channels

20 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 15.5 Break-Even Chart for the Choice Between a Company Sales Force and Manufacturer’s Sales Agency

21 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Channel-Management Decisions Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members

22 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Channel Power Coercive Reward Legitimate Expert Referent

23 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Channel Integration and Systems  Vertical marketing systems Corporate VMS Administered VMS Contractual VMS  Horizontal marketing systems  Multichannel systems

24 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall What is Channel Conflict? Channel conflict occurs when one member’s actions prevent another channel from achieving its goal. Types of channel conflict Vertical Horizontal Multichannel

25 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Causes of Channel Conflict Goal incompatibility Unclear roles and rights Differences in perception Intermediaries’ dependence on the manufacturer

26 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Table 15.3 Strategies for Managing Channel Conflict Adoption of superordinate goals Exchange of employees Joint membership in trade associations Cooptation Diplomacy Mediation Arbitration Legal recourse

27 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Coach Avoids Brand Dilution

28 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall e-Commerce Marketing Practices Pure-click Brick-and-click

29 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Debate Does it matter where you are sold? Take a position: 1.Channel images do not really affect the brand images of the products they they sell that much. or 2. Channel images must be consistent with the brand image.

30 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Marketing Discussion Think of your favorite retailers. How have they integrated their channel system? How would you like their channels to be integrated? Do you use multiple channels from them? Why?


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