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Marketing Channels: Delivering Customer Value
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Session Outline Supply Chains and the Value Delivery Network
The Nature and Importance of Marketing Channels Channel Behaviour and Organization Channel Design Decisions Channel Management Decisions
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Supply Chains and the Value Delivery Network
The network made up of the company, suppliers, distributors and ultimately customers who “partner” with each other to improve the performance of the entire system in delivering customer value.
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The Nature and Importance of Marketing Channels
Marketing Channel (Distribution Channel) A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.
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How Channel Members Add Value
Number of Contacts without a Distributor Manufacturer 1 Customer 3 Customer 2 Customer 1 Manufacturer 2 Manufacturer 3
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Number of Contacts with a Distributor
Manufacturer 1 Customer 3 Customer 2 Customer 1 Manufacturer 2 Manufacturer 3 Distributor
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Key Functions Performed by Members of the Marketing Channel
Information Promotion Contact Matching Negotiation Physical Distribution Financing Risk Taking
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Number of Channel Levels
A layer of intermediaries that performs some work in brining the product and its ownership closer to the final buyer. Direct Marketing Channel A marketing channel that has no intermediary levels. Indirect Marketing Channel Channel containing one or more intermediary levels.
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Customer Marketing Channels
0-Level 1-Level 2-Level 3-Level Manufacturer Manufacturer Manufacturer Manufacturer Wholesaler Wholesaler Jobber Retailer Retailer Retailer Consumer Consumer Consumer Consumer
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Industrial Marketing Channels
0-Level 1-Level 2-Level 3-Level Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer’s Representative Manufacturer’s Representative Industrial Distributor Industrial Customer Industrial Customer Industrial Customer Industrial Customer
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Channel Design Decisions
Analyzing Consumer Needs Setting Channel Objectives Identifying Major Alternatives Evaluating the Major Alternatives
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Analyzing Consumer Needs
Designing the marketing channel starts with finding out what target consumers want from the channel. From where do customers willing to buy? Buy in person, by phone or online? Breadth of assortment? Add-on services?
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Setting Channel Objectives
Companies should state their marketing channel objectives in terms of targeted levels of customer service. Company can identify several segments wanting different levels of service. The company should decide which segments to serve and the best channels to use in each case.
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Identifying Major Alternatives
Types of Intermediaries Number of Intermediaries Intensive Distribution Exclusive Distribution Selective Distribution Responsibilities of Channel Members
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Evaluating the Major Alternatives
Each alternative should be evaluated against, Economic Criteria Control Criteria Adaptive Criteria
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Channel Management Decisions
Selecting Channel Members Managing and Motivating Channel Members Evaluating Channel Members
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Summary and Conclusions
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