Phillip Kevin Lane

Kotler • Keller
Marketing Management • 14e
 1 5
e r
pt
a
Ch

Designing and Managing

Integrated Marketing Channels
Discussion Questions

1. What is a marketing channel system

and value network?
2. What work do marketing channels
perform?
3. How should channels be designed?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 36

Discussion Questions
4. What decisions do companies face in
managing their channels?
5. How should companies integrate
channels and manage channel conflict?
6. What are the key issues with e-
commerce and m-commerce?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 4 of 36

 ed
fi n
De
Marketing Channels
Sets of interdependent organizations
participating in the process of
making a product or service
available for use or consumption.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 5 of 36

 Intermediaries

Merchants

Agents

Facilitators
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 6 of 36
Importance of Channels

Ultimate Selling Price

30% - 50% 5% - 7%
Channel Members Advertising

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 7 of 36

Importance of Channels

Push strategy

Pull strategy
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 36
 Multichannel Marketing (Hybrid)
Internet

Sales Force
Telemarketing

Direct Mail
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 9 of 36
Value Networks

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 10 of 36

 Role of Marketing Channels
Merchants

Contacts
Experience
Specialization
Agents Scale of operation

Facilitators
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 11 of 36
 Time
Channel Functions and Flows Place
Possession

Forward Flow
Transportation, communication

Information, negotiation,
finance, risk taking

Backward Flow
Ordering, payment
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 12 of 36
 .1
1 5
re
Fi g u Five Marketing Flows in the
Marketing Channel

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 13 of 36

 Channel Levels
Zero-level (Direct marketing) channel

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 14 of 36

 .2
1 5
re
u
Fi g Channel Levels – Consumer

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 15 of 36

 .2
1 5
re Channel Levels – B2B
g u
Fi

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 16 of 36

Channel-Design Decisions
Customer wants and needs
Objectives and constraints
Identifying and evaluate alternatives

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 17 of 36

Customer Needs and Wants

Price
Product Assortment

Shopping Goals
•Economic
•Social
Convenience •Experiential
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 18 of 36
 .3
1 5
re
g u
Fi What do European Consumers Value

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 19 of 36

 Channels Service Outputs
Spatial Convenience Waiting/
Deliver Time

Service Backup

Product Variety Lot Size

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 20 of 36
 Objectives and Constraints
Service Costs
Nonstandard Products

Bulky Products

Installation / Maintenance
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 21 of 36
Identify Channel Alternatives
Sales Force

Distributors
Direct Mail

Channel Alternatives
•Type of Intermediaries
•Number of Intermediaries
Telemarketing •Terms and Responsibilities
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 22 of 36
Identify Channel Alternatives

Channel Alternatives
•Type of Intermediaries
•Number of Intermediaries
•Terms and Responsibilities
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 23 of 36
 Types of Intermediaries
Satellite Radio OEMs
Manufacturer

Dealers Ray’s Cars

Direct to Consumers
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 24 of 36
Number of Intermediaries
Exclusive Distribution

Intensive Distribution

Selective Distribution

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 25 of 36

 Evaluating Channel Alternatives
Economic Criteria

$4.07
(Face-to-Face Transaction)

$0.27
(ATM Transaction)

$0.54 $0.01
(Phone Transaction) (Online Transaction)
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 26 of 36
 .4
1 5
re
i g u Value-Adds vs. Costs of
F
Different Channels

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 27 of 36

 .5
1 5
re
g u Break-Even Cost Chart: Company
Fi
Sales Force vs. Sales Agency

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 28 of 36

 Channel-Management Decisions
Training and Motivating

Selecting Channel Members

Modifying Evaluating
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 29 of 36
 Channel Integration and Systems
Horizontal Marketing Systems
Integrating Multichannel
Marketing Systems
Best Buy Blockbuster

Disney .com

Amazon Disney Store

Vertical Marketing Systems

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 30 of 36

 .6
1 5
re
g u The Hybrid Grid
Fi

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 31 of 36

Conflict, Cooperation & Competition
Channel Coordination

Channel Conflict

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 32 of 36

 Channel Conflict
Multichannel Conflict

Vertical Channel Conflict

Horizontal Channel Conflict

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 33 of 36

Managing Channel Conflict
Employee Exchange

Dual Compensation

Legal Recourse
Mediation

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 34 of 36

 E-Commerce Marketing Practices

Brick-and-Click Firms

B2B E-Commerce

Pure-Click Firms
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 35 of 36
 M-Commerce Marketing Practices
M-Commerce

Text Promotions

GPS Features

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 36 of 36