1. Presented by Diego Ruiz Jeffery Botwinick Karina Ramos Yanmi Wang
Marketing Channels
Presented by
Diego Ruiz
Jeffery Botwinick
Karina Ramos
Yanmi Wang

2. Agenda Marketing Channel Levels of Channel Channel Design
Types of Marketing System
Logistics
1.agenda
2.mktg channel/ value added
3 channel levels: direct/ indirect
4. types(befor types: conflict?)
5 Logistics

3. What is a Marketing Channel?
Producer
Channel
Customer
A set of interdependent organizations
Making products available to consumers or businesses.
Creating greater efficiency on making goods available to target markets.
A marketing channel is a set of interdependent organizations that make a product or service available for use or consumption by the customer or business user. In other words, it is the processes and partners that move a product from the producer to the consumer
Producers use intermediaries because they create greater efficiency on making goods available to target markets. It answers the question: where and how will the customer obtain the product or service?

4. The Importance of Marketing Channel
Each channel member adds value
Connect producers with customers
Complete transactions
Manufacturer
Customer
Number of contacts without a distributor
Distributor
Number of contacts with a distributor
Each channel member adds value: Through their contracts, experience, specialization, and scale of operation, intermediaries offer the producer more that it can achieve on its own.
It makes the process easier (explain the diagrams)
It connects producers with the customers: Many times the channel knows where the customers are and how to reach them, and the producer does not.
It completes complicated transaction, such as billing people and collecting their money.

5. Marketing Channel Levels
Direct Marketing Channel
Wholesaler
Producer
Consumer
Retailer
Channel 1
Channel 3
Channel 2
Manufacturer’s Representatives
Business Distributor
Business Customer
Channel 4
Channel 6
Channel 5
Consumer Marketing Channels
Business Marketing Channels
Indirect Marketing Channel
no intermediary levels
company sells directly to consumers
one or more intermediary levels
The number of intermediary levels indicates the length of a channel.
Direct Marketing Channel: It has no intermediary levels, company sells directly to consumers.
Mary Kay Cosmetics and Amway sell their products door-to-door, through home and office sales parties, and on the Internet
The remaining channels in Figure are indirect marketing channels, containing one or more intermediaries. 12.2B shows some common business distribution channels. The business marketer can use its own sales force to sell directly to business customers. Or it can sell to various types of intermediaries, who in turn sell to these customers.

6. Types of Marketing System
Conventional distribution channel
Vertical marketing system
One or more independent member
Seeking to maximize its own profits
no much control over other members
All members acting as a unified system
One channel member owns the others
Dominated by the producer the wholesaler, or the retailer
Conventional distribution channel: consists of One or more independent producers, wholesaler, and retailers. each is a separate business seeking to maximize its own profits, perhaps even at the expense of the system as a whole. no channel member has much control over the other members, and no formal means exists for assigning roles and resolving channel conflict
Vertical marketing system: consists of producers, wholesalers and retailers acting as a unified system. 1 channel member owns the others, has contracts with them, or wields so much power that they must all cooperate. VMS dominated by the producer the wholesaler, or the retailer.
A corporate VMS integrates successive stages of production and distribution under single ownership. Coordination and conflict management are attained through regular organizational channels.
A contractual VMS consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone. Channel members coordinate their activities and manage conflict through contractual agreements.
In an administered VMS, leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members.
Wholesaler
Producer
Consumer
Retailer
Conventional marketing channel
Producer
Wholesaler
Retailer
Consumer
Vertical Marketing System

7. Types of Marketing System
Horizontal Marketing Systems
Multi-channel distribution channel
Two or more companies at one level
Accomplish more than any one company could alone
A single firm sets up two or more marketing channels
To reach one or more customer segments
Horizontal system - A distribution channel arrangement where two or more companies at one level join together to follow a new marketing opportunity. By working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could alone.
Companies might join forces with competitors or noncompetitors. They might work with each other on a temporary or permanent basis, or they may create a separate company
ex:Competitors Microsoft and Yahoo! have joined forces to create a horizontal Internet search alliance. Until 2020, Microsoft’s Bing will power Yahoo! searches.
Multi-channel distribution channel - In the past, many companies used a single channel to sell to a single market or market segment. Today, with the proliferation of customer segments and channel possibilities, more and more companies have adopted multichannel distribution systems. Such multichannel marketing occurs when a single firm sets up two or more marketing channels to reach one or more customer segments.
Channel Conflict can be Vertical and horizontal
Vertical conflict is between different levels of the same channel
Horizontal is conflict that  happens between firms at the same level.

8. Marketing channels Taylor Farms WalMart Buyers Sysco Applebee's
PRODUCER
WalMart
RETAILER
Buyers
CONSUMER
Sysco
BUSINESS DISTRIBUTOR
Applebee's
BUSINESS CUSTOMER
Consumer marketing channels
Business marketing channels

9. Marketing Channel Design
Analyzing Customer Needs
Nearby locations
Buy in person, by phone or online
Range of assortments or specialization
Add-on services
Setting Channel Objectives
Segments to serve
Nature of the company/products
Competitors
Environment
Analyzing customer need: What target consumers want from the channel. Examples:
Responsibilities of Channel Members: Agree on price policies, conditions of sale, and territory rights.

10. Marketing Channel Design
Identifying Major Alternatives
Types of intermediaries
Number of intermediaries
Intensive distribution
Exclusive distribution
Selective distribution
Responsibilities of Channel Members
Evaluating Major Alternatives
Economic criteria
Control issues
Adaptability criteria
Types of intermediaries: The types of channel members available to carry out its product.
Number of intermediaries: intensive distribution.
Responsibilities of Channel Members:
After defining its channels objectives, a company should next identify its major channel alternatives in terms of:
Types of intermediaries: The different channel members available to carry out the producer’s product. Example: retailers,

11. Channel Considerations
Does the channel fit the target customers?
Is the channel going allow for profit?
How many intermediaries will be involved?
How will each add value?
Jeff
Taylor farms has 65% share fo the foodservice market
Taylor farms customers are the businesses that use their salads and mixes as a factor of production or as a togo saled
To allow for profit taylor farms must negotiate with intermediaries on how much of the profit margin they are willing to give up.
As the number of intermediaries grows the profit margin for each level shrinks. Also Being that taylor farms sells produce the channel must be as short as possible to allow quick passage of goods from the field to the customer
It is important to understand how

12. Marketing Logistics Warehousing
Taylor Farm has storage warehouses, and distribution centers.
Produce has a limited shelf life.
Distributions centers need to fill orders efficiently to ensure fresh produce.
Taylor Farms operates nine Rapid deployment Centers (RDCs) through the country.
Marketing logistics is also known as physical distribution. (p Para, 3)

13. Inventory Management Balance inventory Affect customer satisfaction
Product availability
Ability to track product

14. Transportation Choice of carriers affect product pricing
Affect the condition of goods
Delivery performance
Truck 40% of cargo ton-miles in the U.S.
Rail    40% of cargo ton-miles in the U.S
Water >5% of cargo ton-miles in the U.S
Pipeline >1% of cargo ton-miles in the U.S
Air >1 % of cargo ton-miles in the U.S
Internet carries digital products

15. Logistics Information Management
Companies manage their supply through information.
Channels share information
Customer transactions
Billing
Shipment & inventory
Customer data
keeping track of information will lead to a more efficient distribution.
knowing what items are being sold.
most data is shared through electronic data interchange(EDI)
this data is transmitted through the internet, making data easily available to each other

16. Motivating Intermediaries
Opportunity for profit
Price, terms, conditions
Support and  training
Products line future
Attractive brand
Co-marketing
(McCarthy, 2013)
How can a producer motivate intermediaries to deliver their product with the same dedication?

17. Reflection Marketing channels connect producers to customers.
There are two major types of channel Direct and indirect
Channels are opportunities for value add in a target market
The complexities that make a product available for consumers.
What did we learn?
Marketing channels connect producers to customers.
There are two major types of channel Direct and indirect
Channels are opportunities for value add in a target market
The complexities that make a product available for consumers. (Please edit)f channel Direct and indirect
The complex process that takes to have a product/salad available for consumers. (Please edit)

18. References
Kolter, P. & Armstrong, G. (2014)  Principles of Marketing. Upper Saddle NJ:Pearson
Mckarthy, Brian K. (2013 February 24). Marketing Channels of Distribution. [Video file]. Retrieved from
Hegedus World. (2012). Taylor Farms[Video file]. Vemo.