Marketing Channels:

Delivering Customer Value

Student: Stratan Olivia
 Supply Chain Partners
Upstream partners include raw material
suppliers, components, parts, information,
Supply Chains finances, and expertise to create a product or
service
and the
Value Delivery Downstream partners include the marketing
Network channels or distribution channels that look
toward the customer
 Supply Chain Views
Upstream partners include raw material
Supply Chains suppliers, components, parts, information,
finances, and expertise to create a product or
and the service.
Value Delivery
Network Downstream partners include the marketing
channels or distribution channels that look
toward the customer.
 How Channel Members Add Value

The Nature  Intermediaries offer producers greater

efficiency in making goods available to target
and markets. Through their contacts, experience,
Importanc specialization, and scale of operations,
e of intermediaries usually offer the firm more

Marketing than it can achieve on its own.

Channels
 Number of Channel Levels

The Nature
and
Importance of
Marketing
Channels
 Channel Behavior
Marketing channel consists of firms that
have partnered for their common good with
Channel each member playing a specialized role
Behavior Channel conflict refers to disagreement over
goals, roles, and rewards by channel
and members
• Horizontal conflict
Organizati • Vertical conflict
on
 Conventional Distributions Systems
 Conventional distribution systems
consist of one or more independent
Channel producers, wholesalers, and retailers. Each
Behavior and seeks to maximize its own profits, and there
is little control over the other members and
Organization no formal means for assigning roles and
resolving conflict.
 Vertical Marketing Systems

Vertical marketing systems (VMSs) provide

channel leadership and consist of producers,
wholesalers, and retailers acting as a unified
Channel system and consist of:
• Corporate marketing systems
Behavior and • Contractual marketing systems
Organization • Administered marketing systems
 Vertical Marketing Systems

Channel  Corporate vertical marketing system

Behavior and integrates successive stages of production
and distribution under single ownership .
Organization
 Vertical Marketing Systems

Contractual vertical marketing system

consists of independent firms at different
Channel levels of production and distribution who join
Behavior and together through contracts to obtain more
Organization economies or sales impact than each could
achieve alone. The most common form is the
franchise organization.
 Vertical Marketing Systems

Franchise organization links several stages

in the production distribution process
Channel – Manufacturer-sponsored retailer franchise
Behavior and system
Organization – Manufacturer-sponsored wholesaler
franchise system
– Service firm-sponsored retailer franchise
system
 Vertical Marketing Systems

 Administered vertical marketing system

Channel has a few dominant channel members
Behavior and without common ownership. Leadership
comes from size and power.
Organization
 Multichannel Distribution System

Channel
Behavior and
Organization
Channel
Design
Decisions
 Setting Channel Objectives

• Targeted levels of customer service

• What segments to serve
Channel • Best channels to use
Design • Minimizing the cost of meeting customer
Decisions service requirements
 Identifying Major Alternatives

• Types of intermediaries
Channel • Number of marketing intermediaries
Design • Responsibilities of channel members
Decisions
 Identifying Major Alternatives

Channel
Design
Decisions
 Exclusive distribution is when the seller
allows only certain outlets to carry its
products
Public Policy Exclusive dealing is when the seller requires
and that the sellers not handle competitor’s

Distribution products
Exclusive territorial agreements are where
Decisions producer or seller limit territory
Tying agreements are agreements where the
dealer must take most or all of the line
 Nature and Importance of Marketing
Logistics

 Marketing logistics (physical distribution)

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

Marketing
Logistics and
Supply Chain
Management
 Nature and Importance of Marketing Logistics
 Supply chain management is the process
Marketing of managing upstream and downstream
Logistics and value-added flows of materials, final goods,
Supply Chain and related information among suppliers, the
Management company, resellers, and final consumers.
 Major Logistics Functions

Marketing
Logistics and
Supply Chain
Management
 Warehousing Decisions

• How many
Marketing • What types
Logistics and • Location
Supply Chain • Distribution centers
Management
 Inventory Management

• Just-in-time systems
Marketing • RFID
Logistics and – Knowing exact product location
Supply Chain
Management • Smart shelves
– Placing orders automatically
 Logistics Information Management

Logistics information management is the

Marketing management of the flow of information,
Logistics and including customer orders, billing, inventory
levels, and customer data

Supply Chain • EDI (electronic data interchange)

Management • VMI (vendor-managed inventory)

The END