Kotler Pom16e Inppt 12

Principles of Marketing
Kotler and Armstrong

Chapter 12:
Insert
Textbook
Cover Image
Marketing
Channels
Delivering Customer
Value
Copyright 2016 Pearson Education, Inc.
12-1
Marketing Channels
12-2
Marketing Channels
Learning Objectives
Objective 1: Explain why companies use
marketing channels and discuss the
functions these channels perform.
Objective 2: Discuss how channel members
interact and how they organize to perform
the work of the channel.
Objective 3: Identify the major channel
alternatives open to a company.
12-3
Marketing Channels
Learning Objectives
Objective 4: Explain how companies select,
motivate, and evaluate channel members.
Objective 5: Discuss the nature and
importance of marketing logistics and
integrated supply chain management.
12-4
Marketing Channels
Learning Objective 1
Explain why companies use marketing
channels and discuss the functions these
channels perform.
Supply Chains and the Value Delivery
Network
The Nature and Importance of Marketing
Channels
12-5
Supply Chains and the

Value Delivery Network
Upstream partners are firms that supply raw
materials, components, parts, information,
finances, and expertise needed to create a
product or service.
Downstream partners include the marketing
channels or distribution channels that look toward
the customer, including retailers and wholesalers.
12-6

Supply chain make and sell view
includes the firms raw materials,
productive inputs, and factory capacity.
Demand chain sense and respond view
suggests that planning starts with the
needs of the target customer.
12-7

Value delivery
network is composed
of the company,
suppliers, distributors,
and, ultimately,
customers who partner
with each other to
improve the
performance of the
entire system.Copyright 2016 Pearson Education, Inc.
12-8
The Nature and Importance of

Marketing Channels
Marketing channel (distribution

channel) is a set of interdependent
organizations that help make a product or
service available for use or consumption
by the consumer or business user.
12-9

Marketing Channels
How Channel Members Add Value
Transform the assortment of products into

assortments wanted by consumers
Bridge the major time, place, and
possession gaps that separate goods and
services from users
12-10

Marketing Channels
12-11

Marketing Channels
Informat
ion
Promoti
on
Contact
Matchin
g
Negotiat
ion
Physical
distribut
ion
Financin
g
Risk
taking
12-12

Marketing Channels
Number of Channel
Levels
12-13

Marketing Channels
Number of Channel
Levels
Connected by several
types of flows
Physical flow of products
Flow of ownership
Payment flow
Information flow
Promotion flow
12-14
Marketing Channels
Explain why companies use marketing
channels and discuss the functions these
channels perform.
Supply Chains
Number of Channel Levels
12-15
Marketing Channels
Discuss how channel members interact and
how they organize to perform the work of the
channel.
Channel Behavior and Organization
12-16

Channel Behavior
Marketing channels consist of firms that

have partnered for their common good with
each member playing a specialized role.
12-17

Channel Behavior
Channel conflict refers to disagreement

among channel members over goals, roles,
and rewards.
Horizontal conflict
Vertical conflict
12-18

Vertical Marketing Systems
Conventional distribution systems consist

of one or more independent producers,
wholesalers, and retailers, each separate
business seeking to maximize its own profits,
perhaps even at the expense of profits for
the system as a whole.
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12-20

Vertical marketing systems (VMSs)

provide channel leadership and consist
of producers, wholesalers, and retailers
acting as a unified system.
Corporate marketing systems
Contractual marketing systems
Administered marketing systems
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Corporate vertical marketing

systems combine successive stages
of production and distribution under
single ownership.
12-22

Contractual vertical marketing

systems consist of independent firms
at different levels of production and
distribution who join together through
contracts.
12-23

Franchise
organization is
a contractual
vertical
marketing
system in which
a channel
member, called
a franchisor,
links several
stages in the
12-24

An administered vertical marketing

system is a VMS that coordinates successive
stages of production and distribution through the
size and power of one of the parties.
12-25

Horizontal Marketing Systems
Horizontal marketing
system is a channel
arrangement in which
two or more
companies at one
level join together to
follow a new
marketing
opportunity.
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Multichannel Distribution
Systems
Multichannel distribution systems

are systems in which a single firm
sets up two or more marketing
channels to reach one or more
customer segments.
12-27
Multichannel Distribution
Systems
12-28

Changing Channel Organization
Disintermediation
is the cutting out
of marketing
channel
intermediaries by
producers or the
displacement of
traditional
resellers by new
intermediaries.
12-29
Marketing Channels
Discuss how channel members interact and
how they organize to perform the work of the
channel.
Channel Behavior
Horizontal Marketing Systems
Multichannel Distribution Systems
Changing Channel Organization
12-30
Marketing Channels
Identify the major channel alternatives open
to a company.
Channel Design Decisions
12-31
12-32

Analyzing Consumer Needs
Find out what target consumers want

from the channel
Identify market segments
Determine the best channels to use
Minimize the cost of meeting customer
service requirements
12-33

Setting Channel Objectives
Determine targeted levels of

customer service
Balance consumer needs against
costs and customer price preferences
12-34

Identifying Major Alternatives
Types of intermediaries refers to

channel members available to carry
out channel work. Most companies
face many channel member choices.
12-35

Number of Marketing Intermediaries
12-36

Responsibilities of Channel Members
A producer and the intermediaries need to
agree on
Price policies
Conditions of sale
Territory rights
Specific services
12-37
Evaluating the Major

Alternatives
Economic criteria
Control issues
Adaptability criteria
12-38
signing International Distribution Chann

Channel
systems can
vary from
country to
country.
Marketers must
be able to adapt
channel
strategies to
structures
within each
country.
12-39
Marketing Channels
Identify the major channel alternatives open
to a company.
Analyzing consumer needs
Setting channel objectives
Identifying major channel alternatives
Evaluating channel alternatives
12-40
Marketing Channels
Explain how companies select, motivate, and
evaluate channel members.
Channel Management Decisions
Public Policy and Distribution Decisions
12-41
Channel Management
Decisions
12-42

Exclusive distribution is when the producer gives only a
limited number of dealers the exclusive right to distribute
its products in their territories.
Exclusive dealing is when the seller requires that the
exclusive distribution sellers not handle competitors
products.
Exclusive territorial agreements are where producer or
seller limit territory.
Tying agreements are agreements where the dealer must
take most or all of the line.
12-43
Marketing Channels
Explain how companies select, motivate, and
evaluate channel members.
Channel Management Decisions
12-44
Marketing Channels
Discuss the nature and importance of
marketing logistics and integrated supply
chain management.
Marketing Logistics and Supply Chain
Management
12-45
Marketing Logistics and

Supply
Chain Management
Nature
and Importance
of Marketing
Logistics
Marketing logistics
(physical distribution)
involves planning,
implementing, and
controlling the physical
flow of goods, services,
and related information
from points of origin to
points of consumption to
meet consumer
requirements at a profit.
12-46

Supply Chain Management
Nature and Importance of Marketing

Logistics
12-47


Logistics
Supply chain management involves
managing upstream and downstream valueadded flows of materials, final goods, and
related information among suppliers, the
company, resellers, and final consumers.
Goal of marketing logistics should be to
provide a targeted level of customer service
at the least cost.
12-48

Major Logistics
Functions
12-49

Integrated Logistics Management
Integrated logistics
management is the
recognition that
providing customer
service and trimming
distribution costs
requires teamwork
internally and
externally.
12-50
Marketing Channels
Discuss the nature and importance of
marketing logistics and integrated supply
chain management.
Logistics
Major Logistics Functions
Integrated Logistics Management
12-51
Principles of Marketing
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Principles of Marketing

Kotler and Armstrong

Copyright 2016 Pearson Education, Inc.

Copyright 2016 Pearson Education, Inc.

Copyright 2016 Pearson Education, Inc.

Copyright 2016 Pearson Education, Inc.

Supply Chains and the

Copyright 2016 Pearson Education, Inc.

Supply Chains and the

Supply Chains and the

The Nature and Importance of

Marketing channel (distribution

Copyright 2016 Pearson Education, Inc.

The Nature and Importance of

Transform the assortment of products into

Copyright 2016 Pearson Education, Inc.

The Nature and Importance of

Copyright 2016 Pearson Education, Inc.

The Nature and Importance of

Copyright 2016 Pearson Education, Inc.

The Nature and Importance of

Copyright 2016 Pearson Education, Inc.

The Nature and Importance of

Copyright 2016 Pearson Education, Inc.

Copyright 2016 Pearson Education, Inc.

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Marketing channels consist of firms that

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Channel conflict refers to disagreement

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Conventional distribution systems consist

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Vertical marketing systems (VMSs)

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Corporate vertical marketing

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Contractual vertical marketing

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Channel Behavior and Organization

An administered vertical marketing

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Multichannel distribution systems

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Copyright 2016 Pearson Education, Inc.

Channel Behavior and Organization

Copyright 2016 Pearson Education, Inc.

Channel Design Decisions

Copyright 2016 Pearson Education, Inc.

Channel Design Decisions

Find out what target consumers want

Copyright 2016 Pearson Education, Inc.