Kotler MM 13e Overheads 15

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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall