Transcript ch 15 DEVELOPING VALUE NETWORK and

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15
Designing and Managing
Integrated Marketing
Channels
Chapter Questions
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What is a marketing channel system and value
network?
What work do marketing channels perform?
How should channels be designed?
What decisions do companies face in managing
their channels?
How should companies integrate channels and
manage channel conflict?
What is the future for e-commerce?
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Marketing Channels
Sets of interdependent organizations
involved in the process of making a
product or service available for use
or consumption.
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“Sourcing and logistics
would remain ‘the
darkest continent of
business’ – the least
exploited area of
business for competitive
advantage”
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Marketing channels
must not just serve
markets, they must
also make markets.
The channels chosen
affect all other
marketing decisions.
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Channels and Marketing Decisions
Push
Strategy
Pull
Strategy
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Categories of Buyers (having different needs
during the purchase process)
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Habitual shoppers
High value deal seekers
Variety-loving shoppers
High-involvement shoppers
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Hybrid Channels & Buyer Expectations for
Channel Integration
Ability to order a product online and pick it
up at a convenient retail location
 Ability to return an online-ordered product
to a nearby store
 Right to receive discounts based on total
online and offline purchases
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Value Networks
Think about the target
market, then design the
supply chain (demand
chain planning).
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Should the 4 P’s be replaced?
 Solutions
 Information
 Value
 Access
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Why Using Intermediaries?
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Many producers lack the financial resources to carry out
direct marketing.
Producers can earn a greater return by increasing
investment in their main business.
Direct marketing simply is not feasible.
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Channel Member Functions
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Gather information
Develop and disseminate persuasive
communications
Reach agreements on price and terms
Acquire funds to finance inventories
Assume risks
Provide for storage
Provide for buyers’ payment of their bills
Oversee actual transfer of ownership
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Designing a Marketing Channel System
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Analyze customers’ desired service output
levels
Establish channel objectives
Identify major channel alternatives
Evaluate major channel alternatives
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Channel Service Outputs
Lot size
 Waiting/delivery time
 Spatial convenience
 Product variety
 Service backup
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Identifying Channel Alternatives
Types of intermediaries
 Number of intermediaries
 Terms and responsibilities
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Number of Intermediaries
Exclusive
 Selective
 Intensive
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Channel-Management Decisions
Selecting channel members
 Training channel members
 Motivating channel members
 Evaluating channel members
 Modifying channel members
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Channel Power
Coercive
 Reward
 Legitimate
 Expert
 Referent
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Channel Integration and Systems
 Vertical
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marketing systems
Corporate VMS
Administered VMS
Contractual VMS
 Horizontal
marketing systems
 Multichannel systems
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Managing Channel Conflicts
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Adoption of superordinate goals
Cooptation
Diplomacy
Mediation
Arbitration
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e-Commerce Marketing Practices
Pure-click
 Brick-and-click
 Brick-and-mortar
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