Transcript Marketing or Distribution Channel

10
Marketing Channels and Supply
Chain Management
Marketing or Distribution
Channel
• A set of interdependent organizations
involved in the process of making a
product or service available for use or
consumption by the consumer or business
user.
10-2
Channel Functions
These functions should be assigned to the channel
member who can add the most value for the cost
Information
Negotiation
Promotion
Physical
Distribution
Contact
Financing
Matching
Risk Taking
10-3
Consumer and Business Channels
10-4
Channel Behavior
• The channel will be most effective when:
– each member is assigned tasks it can do best.
– all members cooperate to attain overall channel
goals.
• If this does not happen, conflict occurs:
– Horizontal Conflict occurs among firms at the same
level of the channel (e.g., retailer to retailer).
– Vertical Conflict occurs between different levels of
the same channel (e.g., wholesaler to retailer).
• Some conflict can be healthy competition.
10-5
Channel Conflict
When it decided to sell its familiar containers at retail through Target stores,
Tupperware avoided conflicts with its army of in-home sales consultants by inviting
them into the stores to demonstrate the products.
10-6
Conventional vs. Vertical Marketing System
10-7
Types of Vertical Marketing Systems
Corporate VMS
Common Ownership at Different
Levels of the Channel (e.g., Sears)
High
Contractual VMS
Contractual Agreements Among
Channel Members (e.g., ACE Hardware)
Control
Administered VMS
Leadership is Assumed by One or
a Few Dominant Members (e.g., Kraft)
Low
10-8
Innovations in Marketing Systems
Horizontal Marketing
System
Two or more
companies at one
channel level join
together to follow a
new marketing
opportunity.
Example: Banks in
grocery stores
Hybrid Marketing
System
A single firm sets up
two or more marketing
channels to reach one
or more customer
segments.
Example: Retailers
and catalogs
10-9
Number of Intermediaries
• Intensive distribution
• Exclusive distribution
• Selective distribution
10-10