A FRAMEWORK for

MARKETING MANAGEMENT

Designing and Managing

Value Networks and Channels

Kotler Keller
 Marketing Channels

Marketing channels are sets

of interdependent organizations
involved in the process of making a
product or service available for use
or consumption

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 Channels and Marketing Decisions

Push strategy
Manufacturer use its sales force & trade
promotion money to pursue intermediaries
to carry, promote & sell the product to end
users.
Pull strategy
Manufacturer using advertising & promotion
to pursue consumers to ask intermediaries
for the product.
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 Value Networks

A system of partnerships and alliances

that a firm creates to source, augment
and deliver its offerings.
Its includes a firms suppliers and its
suppliers, suppliers, its immediate
customers and their end customers.
It include valued relations with others
such as university researchers and
government approval agencies.
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 Consumer Marketing Channels

• 0-level
• Manufacturer to consumer
• 1-level
• Manufacturer to retailer to consumer
• 2-level
• Manufacturer to wholesaler to retailer to consumer
• 3-level
• Manufacturer to wholesaler to jobber to retailer to
consumer.

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 Industrial Marketing Channels

• 0-level
• Manufacturer to industrial customer
• 1-level
• Manufacturer to industrial distributors to industrial
customer
• 2-level
• Manufacturer to manufacturer’s rep to industrial
distributors to industrial customer
• 3-level
• Manufacturer to manufacturer’s sales branch to
industrial distributors to industrial customer
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 Channel Design Decisions

• Analyze Customer Needs

• Establish Channel Objectives
• Identify Major Channel Alternatives
• Evaluate Major Channel Alternatives

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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 Integration and Systems
• Vertical Marketing Systems: Producer,
wholesaler and retailer acting as a unified
system.
• Horizontal Marketing Systems: Two or more
unrelated companies put together resources
to exploit an emerging marketing opportunity.
• Multichannel Marketing Systems: When a
single firm uses two or more marketing
channels to reach one or more customer
segments.
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 Managing Channel Conflict
• Adoption of super ordinate goals.
• Cooptation: winning support of leaders of other
organization by including them in BOD, etc.
• Diplomacy: when each side sends a person or
a group to meet with its counterpart to resolve
conflict.
• Mediation: resorting to a neutral third party who
is skilled in conciliating the two party interests.
• Arbitration: when parties agree to present their
arguments to one or more arbitrators and
accept the arbitration decision.
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