Prof. Sandeep L.

Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana

Prominent Channel
Systems
s

Corporate Vertical Marketing System

n

Company
r

Production firm owns

a

a retail chain
d

(forward integration);
e

ga

in
gi

41
Distributionship
Company Dealership

or

A retail chain owns

a production firm

(backward integration). Prof. Sandeep L. Makwana

 Prominent Channel Systems
s

Administered Vertical Marketing System

n

Company
n

kr

a
a

d
M

d
Company
e n

t
a

r
g

g
n

in
e gi

t s

n e

D
g
:

i
41

ga
 distribution firms

Distributionship
is achieved by
Distributionship
the size and
influence
without
of the dominant firm,
a formal agreement

Dealership
Dealership
Coordination
between
production and
 ownership

Prof. Sandeep L. Makwana

or
Prominent Channel Systems
s

Contractual Vertical Marketing System

n

• Independent Production and

e

Company
k

Distribution firms formally agree to

M

integrate their resources.

e

• These are convenient arrangement

n

I
 g

between channel members when

n

they get together to obtain

n

economies of scale.
d

• Also known as
i

Dealers /
g

se

:
”.
41

Distributors
Prof. Sandeep L. Makwana
“Value-Added-Partnership

Prominent Channel Systems

s
l

Contractual Vertical Marketing System

n

• Manufacturer sponsored
n

Wholesaler Franchise
k

•
Manufacturer sponsored Retail
d

Franchise
a

• Service Firm sponsored Retail

g

Franchise
g

• Wholesaler sponsored Value

M

Desai Brothers
d

in
gi

:
41

Chains

• Retailer Co-operatives

Distributor for Nerolac Prof. Sandeep L. Makwana

Prof. Sandeep L. Makwana
Prof. Sandeep L. Makwana

Channel Design and Planning

Process
s

Training and Motivating Channel Partners

a

Power of Motivation
M

a
r

Expert Power
e

✔ Reward Power
g

✔ Support Power
g
a

✔ Referent Power
M

✔ Coercive Power
n

✔ Legitimate Power
n

✔ Competition Power
s

Prof. Sandeep L. Makwana

1

Channel Design and Planning

Process
s

l
e

Training and Motivating Channel Partners

a

Power of Motivation
n

✔ Expert Power
M

t
Company has some special knowledge .
Without
a

the training support, intermediary would

not be
g

able to perform.
n

✔ Reward Power
d

n
a

Company enjoys the right to select the criteria for

i

releasing incentives and other commissions.

g

1
 Prof. Sandeep L. Makwana

Channel Design and Planning

Process
s

Training and Motivating Channel Partners

a

Power of Motivation
n

i
t

✔ Support Power
M

Promotion, Subsidy in Distribution, Sales People

a

salary and many other support activities are

g

depended on company policy.

n

a
n

✔ Referent Power
M

Market Leaders having eminent position in

n

the market attract and

motivate channel
g

members to join and remain

in the chain.
n

:
4

Prof. Sandeep L. Makwana

1

Channel Design and Planning

Process
s

Training and Motivating Channel Partners

a

Power of Motivation
n

a
✔ Coercive Power
M

Power of threat is used by a company to put a

t

defaulting channel partner back on track by

r

taking away the support or by discontinuing

e

the channel partnership.

I

a
✔ Legitimate Power
M

The company compels the channel member to

n

follow the agreement terms and condition for g

inventory, sales, launching new products etc.

i

1
 Prof. Sandeep L. Makwana

Channel Design and Planning

Process
s

e
n

Training and Motivating Channel Partners

a

Power of Motivation
n

✔ Competition Power
d

The
company generates “Rivalry”
g

among channel members by

n

appointing other partners at the same

g

level.
i

1
 Prof. Sandeep L. Makwana

Channel Design and Planning

Process
s

Evaluating Channel Members

a

C
g

i
s

1
Prof. Sandeep L. Makwana
Channel Design and Planning
Process
s

Evaluating Channel Members

a

e
 t

ga u c
t
n
l i
i

a
o h
v

t
i
V
M
t

E
d
hs

c n

A o

a
it

g
le
g
R

n r

n
i

in e
gi t

s r

e
o

D p ts
:
u

C
4
u

n i e s st n o

e
f i

o s
h P
t t

i e
o t r
e
a e
t
r
g
g o
r n
e
u g r i
P
tc n
e e

b n a i v
M

n i i v

T a
i g
r
e u h
o
t a h
s
i
e
d s
G
l e
n u n

h
o u l
o a
o t B
e r
c f
P

C t l
M
p
x s
m g
r
a
t e
E
 Prof. Sandeep L. Makwana

1
Prof. Sandeep L. Makwana