15

Designing and Managing

Integrated
Marketing Channels

Marketing Management, 13th ed

 Chapter Questions

• What is a marketing channel system and

value network?
• What work do marketing channels perform?
• How should channels be designed?
• What decisions do companies face in
managing their channels?
• How should companies integrate channels
and manage channel conflict?
• What are the key issues with e-commerce?

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 Categories of Buyers

Habitual shoppers

High value deal seekers

Variety-loving shoppers

High-involvement shoppers

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 Channel Member Functions

• Gather information
• Develop and disseminate persuasive
communications
• Reach agreements on price and terms
• Acquire funds to finance inventories
• Assume risks
• Provide for storage
• Provide for buyers’ payment of their bills
• Oversee actual transfer of ownership
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Figure 15.2 Marketing Channel Flows

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 Figure 15.3
Consumer Marketing Channels

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 Figure 15.3
Industrial Marketing Channels

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 Designing a
Marketing Channel System

Analyze customer needs

Establish channel objectives

Identify major channel alternatives

Evaluate major channel alternatives

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 Channel Service Outputs

Lot size

Waiting/delivery time

Spatial convenience

Product variety

Service backup
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 Identifying Channel Alternatives

Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities

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 Number of Intermediaries

Exclusive

Selective

Intensive

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 Figure 15.4 The Value-Adds vs. Costs
of Different Channels

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 Figure 15.5 Break-Even Chart for the
Choice Between a Company Sales Force
and Manufacturer’s Sales Agency

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 Channel-Management Decisions

Selecting channel members

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members

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 Channel Power

• Coercive
• Reward
• Legitimate
• Expert
• Referent

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 Channel Integration and Systems

 Vertical marketing
systems
• Corporate VMS
• Administered VMS
• Contractual VMS
 Horizontal
marketing systems
 Multichannel
systems

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 What is Channel Conflict?

• Channel conflict occurs when one

member’s actions prevent another
channel from achieving its goal.
• Types of channel conflict
• Vertical
• Horizontal
• Multichannel

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 Causes of Channel Conflict

Goal incompatibility

Unclear roles and rights

Differences in perception

Intermediaries’ dependence
on the manufacturer

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