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How Channel Members Add Value

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Presentation on theme: "How Channel Members Add Value"— Presentation transcript:

0 Marketing Channels 12

1 How Channel Members Add Value

2 Nature & Importance of Marketing Channels
Key Functions Performed by Channel Members Information Promotion Contact Matching Negotiation Physical Distribution Financing Risk taking

3 Consumer Marketing Channels

4 Business Marketing Channels

5 Nature & Importance of Marketing Channels
Number of Channel Levels The number of intermediary levels indicates the length of a marketing channel. Direct Channels Indirect Channels Producers lose more control and face greater channel complexity as additional channel levels are added.

6 Nature & Importance of Marketing Channels
Channel Members Are Connected Via A Variety of Flows Physical Flow Payment Flow Information Flow Promotion Flow Flow of Ownership

7 Channel Behavior and Organization
Channel Conflict Occurs when channel members disagree on roles, activities, or rewards. Types of Conflict: Horizontal conflict: occurs among firms at the same channel level Vertical conflict: occurs among firms at different channel levels

8 Conventional Versus Vertical Marketing System

9 Channel Behavior and Organization
Vertical Marketing Systems Corporate VMS Contractual VMS Manufacturer-sponsored retailer franchise system Manufacturer-sponsored wholesaler franchise system Service-firm-sponsored retailer franchise system Administered VMS

10 Channel Behavior and Organization
Horizontal Marketing Systems Two or more companies at one level join together to follow a new marketing opportunity. Nestle and General Mills work together to market cereal outside of North America

11 Channel Design Decisions
Identifying Major Alternatives Number of marketing intermediaries Intensive distribution Selective distribution Exclusive distribution Responsibilities of channel members

12 Number of intermediaries

13 Public Policy and Distribution Decisions
Exclusive distribution Only certain outlets are allowed to carry a firm’s products Exclusive dealing Exclusive territorial agreements Tying agreements

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