MARKETING CHANNELS

D E L I V E R I N G C U S T O M E R VA L U E

PRINCIPLES OF MARKETING
Abbi-Jo Newman
Shipping & Logistics Professional
2020
 THE BROAD PERSPECTIVE 2

THE MARKETING MIX - FOUR Ps

PRODUCT PRICE

PROMOTION PLACE
THE MARKETING MIX 3

PLACE

Place
/pleIs/
noun

marketing channel, distribution

 THE PLAN 4

SETTING THE SCOPE

01 02 03 04 05

CHANNEL
SUPPLY CHAINS & CHANNEL DESIGN CHANNEL MARKETING
VALUE DELIVERY BEHAVIOUR & DECISIONS MANAGEMENT LOGISTICS &
NETWORKS ORGANIZATION DECISIONS SUPPLY CHAINS
Nature & purpose of Interaction between Assessing channel Selecting and evaluating Logistics and integrated
marketing channels channel members alternatives channel partners supply chains
 SUPPLY CHAINS & VALUE DELIVERY NETWORKS 5

01

SUPPLY CHAINS &

VALUE DELIVERY
NETWORKS
Nature & purpose of
marketing channels
 SUPPLY & DEMAND CHAINS 6

& VA L U E D E L I V E RY N E T W O R K S

RAW MATERIALS

CONSUMER SUPPLIER
Logistics

Logistics
RETAILER MANUFACTURER

DISTRIBUTOR
 VALUE DELIVERY NETWORKS 7

U P S T E A M & D O W N S T R E A M PA RT N E R S

Upstream
partners supply
raw materials, D
O
info, finances,
W
and expertise MANUFACTURER NS
needed to create
products
T R
AM
EA
M
RE

SUPPLIER
DISTRIBUTORS
ST

S
UP

Downstream
RAW MATERIALS CONSUMERS partners connect
the firm to its
customers
 VALUE DELIVERY NETWORKS 8

U P S T E A M & D O W N S T R E A M PA RT N E R S

MANUFACTURER

SUPPLIERS DISTRIBUTORS

RAW MATERIALS CONSUMERS

MARKETING CHANNELS 9

DISTRIBUTION CHANNELS

Interdependent
organizations that help
make a product or service
available for use or
consumption by the
consumer or business user
 DISTRIBUTION CHANNELS 10

DISTRIBUTION CHANNELS

A chain of businesses
or intermediaries RETAILERS
through which a good DUAL / MULTI
or service passes until CHANNEL
it gets to the final
buyer or the end user

INDIREC
T
CUSTOMER

PRODUCER
DIRECT
WHOLESALER

AGENT
 CHANNEL LEVELS 11

DISTRIBUTION CHANNELS FOR CONSUMER PRODUCTS

 DIRECT CHANNELS 12

S E L L I N G D I R E C T LY TO E N D U S E R S

PRODUCE
R CONSUMER

A direct marketing channel is one which has no intermediary levels

 INDIRECT CHANNELS 13

ONE OR MORE CHANNEL LEVELS

PRODUCE WHOLESALE CONSUMER

RETAILER
R R

Indirect marketing channels are those which contain one or more intermediary levels
PEPSI’S DISTRIBUTION NETWORK 14

M U LT I - C H A N N E L S E L L I N G
PEPSI’S DISTRIBUTION NETWORK 15

M U LT I - C H A N N E L S E L L I N G
BUSINESS MARKETING CHANNELS 16

DIRECT CHANNELS

PRODUCE BUSINESS
R CUSTOMER
BUSINESS MARKETING CHANNELS 17

INDIRECT CHANNELS

PRODUCE MANUFACTURER’
BUSINESS
BUSINESS
S
R REPRESENTATIVE
DISTRIBUTOR CUSTOMER
MULTI-CHANNEL DISTRIBUTION SYSTEM 18
OMNI-CHANNEL DISTRIBUTION SYSTEM 19

The integration between

physical and online stores,
known as Omni-channel,
has become stronger and
stronger. 
IMPORTANCE OF MARKETING CHANNELS 20

REDUCING NUMBER OF CHANNEL TRANSACTIONS

 HOW CHANNEL MEMBERS ADD VALUE 21

I M P O RTA N C E O F I N T E R M E D I A R I E S

INFORMATION
Gathering & distributing information
needed for planning and aiding
exchange

DISTRIBUTION FINANCING
Fulfill the completed transaction by Acquiring & using funds to cover the
offering physical distribution - costs of the channel work and
transporting and storing goods assuming the risks of carrying out the
channel work

MARKETING MATCHING
Developing and spreading persuasive Shaping and fitting offers to buyers’
communications about an offer. needs and entering into negotiation to
transfer ownership
PULSE CHECK 24

OBJECTIVE # 1
PULSE CHECK 25

OBJECTIVE # 1
 CHANNEL BEHAVIOUR & ORGANIZATION 26

01 02

SUPPLY CHAINS & CHANNEL

VALUE DELIVERY BEHAVIOUR &
NETWORKS ORGANIZATION
Nature & purpose of Interaction between
marketing channels channel members
 CHANNEL BEHAVIOUR & ORGANIZATION 27

Marketing channels consist

of firms that have
partnered for their
common good with each
member playing a
specialized role
 CONVENTIONAL DISTRIBUTION CHANNEL 28

PRODUCE WHOLESALE CONSUMER

RETAILER
R R

Horizontal conflict – between firms at the same level of the

channel

Vertical conflict – between different levels of the same

CONSUMER channel
 VERTICAL MARKETING SYSTEMS 29

CHANNEL LEADERSHIP & MANAGEMENT

PRODUCER

WHOLESALER
PRODUCE WHOLESALE CONSUMER
Three major typesRof VMSs:  RETAILER
R RETAILER
1. Corporate
2. Contractual
3. Administered

CONSUMER
 VERTICAL MARKETING SYSTEMS 30

CHANNEL LEADERSHIP & MANAGEMENT

CORPORATE CONTRACTUAL ADMINISTERED

Types:
Integrates successive stages of Independent firms at different
1. Wholesaler-sponsored levels ofChains
Voluntary Leadership is assumed through size
production and distribution under production and distribution who join and power of one or few dominant
2. Retailer-sponsored Cooperatives
single ownership together through contracts to obtain channel members.
3.more
Franchise Organizations
economies or sales impact
VERTICAL MARKETING SYSTEMS 31
FRANCHISE ORGANIZATIONS 32
HORIZONTAL MARKETING SYSTEMS 33
CHANGING CHANNEL ORGANIZATION 34
DISINTERMEDIATION 35
DISRUPTION 36
PULSE CHECK 37

OBJECTIVE # 2
PULSE CHECK 38

OBJECTIVE # 2
 CHANNEL DESIGN DECISIONS 39

01 02 03

CHANNEL
SUPPLY CHAINS & CHANNEL DESIGN
VALUE DELIVERY BEHAVIOUR & DECISIONS
NETWORKS ORGANIZATION
Nature & purpose of Interaction between Assessing channel
marketing channels channel members alternatives
 CHANNEL DESIGN DECISIONS 40

1. ANALYZING CONSUMER NEEDS

1
CONSUMER NEEDS

2. SETTING CHANNEL OBJECTIVES

4
E VA L U AT E
2
A LT E R N AT I VE CHANNEL OBJECTIVES
S
3. IDENTIFYING CHANNEL ALTERNATIVES

3
IDENTIFY
A LT E R N AT I V E 4. EVALUATING CHANNEL ALTERNATIVES
S
 ANALYZING CONSUMER NEEDS 41

KNOW YOUR CUSTOMERS

SEGMENTS PERSONAS
Who are your target What is the personality of each
customers? customer segment?

ADAPTIVE
CONJOINT
ANALYSIS SURVEYS
What do they value? Can you walk in their shoes

PREDICTIVE ANALYTICS SOCIAL LISTENING

How do you discover unmet What do your customers value
customer needs? in interactions?

JOURNEY MAPS TOUCH POINT MAPS

How can you become more How do you uncover hidden
relevant for your customers? satisfiers/ dissatisfiers?
 SETTING CHANNEL OBJECTIVES 42

CUSTOMER CHANNEL PREFERENCE

• Do they want to buy from nearby locations or travel to more distant and centralized
locations?
• Would they rather buy in person, by phone, or online?
• Do they value breadth of assortment or do they prefer specialization?
• Do consumers want many add-on services (delivery, installation, repairs), or will they
obtain these services elsewhere?

CUSTOMER COST TO SERVE

What will it cost to deliver the target
audience’s needs & wants?
IDENTIFYING ALTERNATIVES 43

TYPE | NUMBER | RESPONSIBILITIES

TYPES OF INTERMEDIARIES
Direct, indirect, multi-channel

NUMBER OF INTERMEDIARIES
• Intensive distribution
• Exclusive distribution
• Selective distribution

RESPONSIBILITIES OF MEMBERS
Channel members should agree on the terms and
responsibilities of each channel member
 EVALUATING THE ALTERNATIVES 44

E C O N O M I C | C O N T R O L | A D A P TA B I L I T Y

ECONOMIC
The likely sales, costs, and
profitability of different channel
1
alternatives

CONTROL

2 Some intermediaries take more

control than others. The company
prefers to keep as much control as
possible

ADAPTABILITY
3 Keep the channel flexible so that it
can adapt to environmental
changes, despite the long-term
commitments involved
INTERNATIONAL DISTRIBUTION CHANNELS 45
JAPANESE CULTURE 46
INTERNATIONAL DISTRIBUTION CHANNELS 47
 INTERNATIONAL DISTRIBUTION CHANNELS 48

ADDITONAL COMPLEXITIES IN DESIGNING CHANNELS

INDIA UNITED STATES

Difficult to navigate. Complex distribution systems with many
Discount and department stores are still large and small players
few Race and ethnicity and the associated
Kirana shops – offer personal service and cultural norms and practices
credit

CHINA JAMAICA???
highly decentralized, made of
many distinct submarkets, each
with its own subculture
inadequate distribution systems
 INTERNATIONAL DISTRIBUTION CHANNELS 49

ADDITONAL COMPLEXITIES IN DESIGNING CHANNELS

INDIA UNITED STATES

Difficult to navigate. Complex distribution systems with many
Discount and department stores are still large and small players
few Race and ethnicity and the associated
Kirana shops – offer personal service and cultural norms and practices
credit

CHINA JAMAICA???
highly decentralized, made of
many distinct submarkets, each
with its own subculture
inadequate distribution systems
DISTRIBUTION IN JAMAICA 50

ADDITONAL COMPLEXITIES IN DESIGNING CHANNELS

PULSE CHECK 51

OBJECTIVE # 3
PULSE CHECK 52

OBJECTIVE # 3
 CHANNEL MANAGEMENT DECISIONS 53

01 02 03 04

CHANNEL
SUPPLY CHAINS & CHANNEL DESIGN CHANNEL
VALUE DELIVERY BEHAVIOUR & DECISIONS MANAGEMENT
NETWORKS ORGANIZATION DECISIONS
Nature & purpose of Interaction between Assessing channel Selecting and evaluating
marketing channels channel members alternatives channel partners
 CHANNEL MANAGEMENT DECISIONS 54

INPLEMENTING, & MANAGING THE SELECTED CHANNEL

SELECTING
01
MANAGING
04 02

EVALUATING 03

MOTIVATING
 SELECTING CHANNEL MEMBERS 55

INPLEMENTING, & MANAGING THE SELECTED CHANNEL

SELECTING CHANNEL MEMBERS

Identify desired criteria:
• channel member’s years in
business 01
• other lines carried
• location
• growth and profit record
• cooperativeness, and
reputation 04 02

03
 MANAGING CHANNEL MEMMBERS 56

INPLEMENTING, & MANAGING THE SELECTED CHANNEL

SELECTING CHANNEL MEMBERS MANAGING THE MEMBERS

Identify desired criteria: • Partner relationship management
• channel member’s years in
business 01 •
(PRM)
Supply chain management (SCM)
• other lines carried
• location
• growth and profit record
• cooperativeness, and
reputation 04 02

03
 CHANNEL MANAGEMENT DECISIONS 57

INPLEMENTING, & MANAGING THE SELECTED CHANNEL

SELECTING CHANNEL MEMBERS MANAGING THE MEMBERS

Identify desired criteria: • Partner relationship management
• channel member’s years in
business 01 •
(PRM)
Supply chain management (SCM)
• other lines carried
• location
• growth and profit record
• cooperativeness, and
reputation 04 02

MOTIVATING
03 THE MEMBERS
Convince suppliers and
distributors that they can
succeed better by working
together as a part of a
cohesive value delivery
system. 
MANAGING & MOTIVATING CHANNEL MEMBERS 58
 CHANNEL MANAGEMENT DECISIONS 59

INPLEMENTING, & MANAGING THE SELECTED CHANNEL

SELECTING CHANNEL MEMBERS MANAGING THE MEMBERS

Identify desired criteria: • Partner relationship management
• channel member’s years in
business 01 •
(PRM)
Supply chain management (SCM)
• other lines carried
• location
• growth and profit record
• cooperativeness, and
reputation 04 02

MOTIVATING
03 THE MEMBERS
Convince suppliers and
EVALUATING distributors that they can
CHANNEL MEMBERS succeed better by working
Regularly check channel member together as a part of a
performance against standards cohesive value delivery
system. 
PUBLIC POLICY & DISTRIBUTION DECISIONS 60

EXCLUSIVE DISTRIBUTION

EXCLUSIVE DEALING

EXCLUSIVE TERRITORIAL AGREEMENTS

TYING AGREEMENTS (Full-line forcing)

PULSE CHECK 61

OBJECTIVE # 4
PULSE CHECK 62

OBJECTIVE # 4
 MARKETING LOGISTICS & SUPPLY CHAINS 63

01 02 03 04 05

CHANNEL
SUPPLY CHAINS & CHANNEL DESIGN CHANNEL MARKETING
VALUE DELIVERY BEHAVIOUR & DECISIONS MANAGEMENT LOGISTICS &
NETWORKS ORGANIZATION DECISIONS SUPPLY CHAINS
Nature & purpose of Interaction between Assessing channel Selecting and evaluating Logistics and integrated
marketing channels channel members alternatives channel partners supply chains
 MARKETING LOGISTICS 64

& S U P P LY C H A I N M A N A G E M E N T

SUPPLIERS PRODUCER RESELLERS CUSTOMERS

INBOUND OUTBOUND REVERSE

LOGISTICS LOGISTICS LOGISTICS
Upstream leg of Value Downstream leg of Value
Delivery Network
• Returns
Delivery Network
• Recycle
SUSTAINABLE SUPPLY CHAINS 65
 GOALS OF THE LOGISTICS SYSTEMS 66

S U P P LY C H A I N M A N A G E M E N T

MANUFACTURER

SUPPLIERS DISTRIBUTORS

RAW MATERIALS CONSUMERS

THE GOAL IS TO:

provide a targeted
level of customer
service at the least
cost.
 MAJOR LOGISTICS FUNCTIONS 67

INVENTORY INFORMATION
MANAGEMENT MANAGEMENT

WAREHOUSING TRANSPORTATION

Just-in-time, EDI, VMI or

RFID, smart continuous
shelves
inventory
replenishment 
What type, where Truck, rail, water,
pipeline, and air, systems
& how many the Internet or
Multi-modal
INTEGRATED LOGISTICS MANAGEMENT 68

B U I L D I N G L O S G I S T I C S PA RT N E R S H I P S

CROSS-FUNCTIONAL TEAMS
Assigning responsibility for various logistics activities to many
different departments—marketing, sales, finance, operations,
and purchasing.

CROSS-COMPANY TEAMS
Employees from different companies working together to achieve
goals

SHARED PROJECTS
Channel members partner together to bring value to the
consumer. For instance, Home Depot allows key suppliers to
use its stores as a testing ground for new merchandising
programs
THIRD-PARTY LOGISTICS (3PL) 69
PULSE CHECK 70

OBJECTIVE # 5
PULSE CHECK 71

OBJECTIVE # 5
 72

MARKETING CHANNELS
D E L I V E R I N G C U S T O M E R VA L U E
THANK YOU &
GOOD LUCK ON YOUR EXAMS!

Abbi-Jo Newman |
Shipping & Logistics Professional
2020