Business Marketing Channels:

Partnerships
for Customer Service

DBA. Nguyễn Thiện Hùng

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NUMBER OF TRANSACTIONS WITHOUT
INTERMEDIATES

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NUMBER OF TRANSACTIONS WITH
INTERMEDIATES

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LINES IN B2B DISTRIBUTION CHANNEL

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DIFFERENCES B2C AND B2B DISTRIBUTION CHANNEL

FACTORS B2C MARKET B2B MARKET

Importance Important because consumers Very important because there is no

appreciate the reputation of inventory, or the contract cannot be
retailers in the market fulfilled, late delivery will cause a lot
of costs for customers.
Channel Control Channels are often controlled by The channel is usually controlled by
large manufacturers or retailers the manufacturers, although industrial
distributors also play a controlling
role
Channel length Usually long and through many Usually short and direct, without
levels of independent intermediaries. Even with an
intermediaries intermediate channel it's still pretty
short
Types of There are many types (wholesale, There are two most common types:
intermediates retail and agency…) industrial distributors and
manufacturer representatives
Volume of goods Most products are sold through The majority (more than 75%) of
sold through intermediaries, only 5% of products are sold directly to customers,
intermediaries products are sold through especially high value products
consumers
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DIFFERENCES B2C AND B2B DISTRIBUTION CHANNEL

FACTORS B2C MARKET B2B MARKET

Customer Retailer selection based on Choices are based less on feelings, but
characteristics emotion and image/impression on performance
Inventory Focus on wholesalers and Focus on multiple channels
retailers
Direct sales Can it be important depending on Very important, often the basic
the product type? distribution channel in industrial
marketing
Important customer Usually only with large Regularly with large and
intermediary channels such as intermediate customers
wholesalers and retailers
Relationship with Relationships built on customer Close relationship between
customers loyalty and satisfaction manufacturers and intermediate
channel

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B2B DISTRIBUTION CHANNEL

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 IMPORTANT OBJECTIVES OF
MARKETING CHANNEL

• DISTRIBUTION OF PRODUCTS/SERVICES THAT

MEET NEEDS
• DISTRIBUTE PRODUCTS TO THE WHERE OF
DEMAND
• HAVE PRODUCTS/SERVICES WHEN THEY WANT
TO HAVE

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 DIFFICULTY OF MARKETING CHANNEL

• HIGH CHANNEL BUILDING COST

• LINKING CHANNEL MEMBERS NORMAL COST

• CHANNELS ACCEPTABLE TO SLOW

ENVIRONMENTAL CHANGE

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 WHAT DO DISTRIBUTORS DO?

CONTRIBUTION TO CONTRIBUTION TO
MANUFACTURERS CUSTOMERS
MARKET COVERAGE PRODUCTS AVAILABLE
SALES EXPOSURE CATEGORIES OF PRODUCTS
AVAILABLE IN STOCK FITS ORDER NUMBERS
ORDER PROCESS CREDIT
SPY IN MARKETING SERVICE
SUPPORT CUSTOMERS TECHNICAL ASSISTANCE

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 CHOOSE MODE OF DISTRIBUTION –
ADDED VALUE VS TRANSACTION COST

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THE COMPANY'S SALES FORCE AND
SALES AGENTS

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CLASSIFICATION OF INTERMEDIATE
CHANNEL (kênh trung gian)

BY FORM OF OWNERSHIP

SELLERs (INDUSTRIAL DISTRIBUTOR)

AGENT, BROKER

OFFICE, BRANCH OF THE MANUFACTURER

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FUNCTIONS OF THE SELLERs

FULL SERVICE

SELECTIVE SERVICE

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FUNCTIONS OF THE SELLER

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FUNCTIONS OF AGENTS, BROKERS

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 CHANNEL DESIGN MODEL

Identify and
forecast
Create a
service needs
vision of
clients
ideal channel

Gap
Channel Reviews Analysis
Current and Implement method
other options best judgment and
system management

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 IDENTIFICATION AND FORECAST OF
CUSTOMERS NEEDS

DETERMINATE THE DEMAND OF CUSTOMERS

IN EVERY SEGMENT
CONVENIENT
SUPPORT SERVICES
EXPENSE
…

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 BUILDING THE IDEAL CHANNEL

FEATURES

LOW COST SALES FORCE

EQUIP KNOWLEDGE ABOUT PRODUCTS

INSTALLATION SUPPORT

TRAINING

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 ECONOMIC BENEFITS OF DIRECT
CHANNEL AND INDIRECT CHANNEL

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CHOOSE CHANNEL BASED ON THE
DISTANCE ANALYSIS

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 ORGANIZATION AND CHANNEL
MANAGEMENT

Competitors

DESTROY

SPEED AND Redundancy

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 CHANNEL MANAGEMENT –
DISTRIBUTION POLICIES

TO BUILD A RELATIONSHIP

CONFLICT MANAGEMENT

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 CHANNEL CONFLICT

CHANNEL CONFLICTS AGAIN WHEN ONE MEMBER's

ACTION prevented OTHER MEMBERS TO ACHIEVE THE
OBJECTIVE.
TYPES OF CONFLICT IN SMALL CHANNEL
 VERTICAL CONFLICT
 HORIZONTAL CONFLICT
MULTI-CHANNEL CONFLICT

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 CAUSES OF CONFLICTS IN CHANNEL
MANAGEMENT

• CONFLICT PURPOSE:
REVENUE DEVELOPMENT SPEED VS. PROFIT
• EXPEDIENCY CONFLICT:
HOW EVERYTHING IS ACHIEVEMENT AND WHO DOES
WHAT & WHEN IT IS ACCEPTANCE
• CONFLICT OF OPINION:
OUR POINTS VS. YOUR OPINION

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 HOW DO CHANNEL MEMBERS RESPONSE TO
CONFLICT?

• GIVING — It is possible to give up on a relationship

• PRESENTATION OF COMMENTS — Means can be
found to explain dissatisfaction
• LOYALTY — Able to overcome conflicts
• ATTACK — Can open or mask actions that hurt
• IGNORE — Unresolved conflicts can be abandoned and
deleted

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 OPTIONS TO RESOLVE CONFLICTS

1. Individual Referee — Make a list of channel members

2. Third Party solution — Intermediate solution

3. Sympathy Mechanism

Use expert

Associations

Personal exchange

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 SOURCE OF CHANNEL POWER

1. BONUS - Can provide vacation for customers

2. REQUIRED - Forced to perform (may produce failure)
3. INFORMATION - It is possible to obtain information that
others do not have
4. SPECIALIST - Can gain advantage what you want to know
5. REFERENCES - Can be influenced based on the desire to be
identified according to the image of the company
6. LEGAL - Latent power granted by contract

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FORMS OF RELATIONSHIP IN CHANNEL

• TYPE OF TRANSACTION - Members buy and sell

transactions
• MANAGEMENT - Interactions that do not follow formal
rules
• CONTRACT - Closely combined according to official
procedures
• COOPERATION - High degree of vertical integration of
sales and distribution functions

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