1. Introduction Berman Chapter 1 Version 3.0
MARKETING CHANNELS
Introduction
Berman Chapter 1
Version 3.0 1

2. Introduction 1. Marketing Channels defined
2. Functions Performed by Intermediaries
3. Alternative Channel Structures
4. Characteristics of Channel Relationships
5. Importance of Channel Management to the Firm
6. Importance of Channel Management to the Economy 2

3. 1. Channel Management Definition
an organized network or system
of agencies and institutions
performing activities
to link producers with users 3

4. 1. Marketing Channels Components
organized network or system
sharing common objectives
concerning customer service and product image
independently owned / integrated strategy
long term contracts
common goals 4

5. 1. Marketing Channels Participants
Channel Participants
agencies and institutions
intermediaries
manufacturers
wholesalers
retailers
facilitators
research, physical distribution, financing, advertising 5

6. 1. Marketing Channels Activities
physical possession
ownership
promotion
negotiation
financing
risking
ordering
payment
linkage of producers and users
conventional channels
franchises
contract pricing 6

7. 1. Marketing Channels Relationships
Retailing - sales of goods and services to end users
Wholesaling - sales for resale
Physical Distribution - movement of finished goods inventory to channel members 7

8. 2. Intermediary Functions
sorting - breaking bulk and contactual efficiency
mass distribution
customer contact
credit
market research 8

9. 2. Channel Functions can be shifted among members cannot be eliminated
Bucklin’s system of service outputs
spatial convenience or market decentralization
lot size
product variety or assortment breadth
waiting or delivery time 9

10. 3. Alternative Channel Structures
channel specialization
competitive advantage tasks
short (direct) vs long (indirect) channels
channel width - intensity
intensive - selective - exclusive
dual channels 10

11. 4. Special Channel Characteristics
member divided loyalty - suppliers and customers
selling to (push) and selling through (pull)
long term relationships
relationship marketing ( partnering)
high switching costs
direct and indirect 11

12. 5. Channel Importance Competitive Advantage Channel Based Strategy
Relationships of firms
areas of management levels, marketing, sales, advertising, products, physical distribution, market research, legal, controller, manufacturing, production control, engineering, etc 12

13. 5. Channel Importance Competitive Advantage
exclusive distribution
dual channels
non-traditional channels
access to broad network
technology
superb customer service
low cost distribution
access to a specialized markets 13

14. 6. Channel Management Importance to the Economy
Product Planning
Pricing Management
Promotion Management
Channel Values
Employment
Sales 14

15. 6. Channel Importance Product Planning
new products / same channel
new products / same members
existing members / new channels
channel members / product recall
new products / shelf space
products services/ franchises / image
specialized products / small markets
refusal to sell 15

16. 6. Channel Importance Pricing Management
wholesaler / retailer profit margins
price reductions / retailers list price
gray markets / transshipping
quantity discounts / maximize share
discounters pricing / full service retailers
seasonal discount structure / retailer order 16

17. 6. Channel Importance Promotion Management
push / pull budgeting
advertising, public relations, sales promotion mix
coop advertising plan
sales contests, other promotions
wholesaler quotas 17