Designing and Managing
Integrated
Marketing Channels
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?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-3
Categories of Buyers
Habitual shoppers
High value deal seekers
Variety-loving shoppers
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
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-5
Figure 15.3
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-7
Figure 15.3
Designing a
Marketing Channel System
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-9
Channel Service Outputs
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Identifying Channel Alternatives
Types of
intermediaries
Number of
intermediaries
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-11
Number of Intermediaries
Exclusive
Selective
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-13
Figure 15.5 Break-Even Chart for the
Choice Between a Company Sales Force
Channel-Management Decisions
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-15
Channel Power
• Coercive
• Reward
• Legitimate
• Expert
Channel Integration and Systems
Vertical marketing
systems
• Corporate VMS
• Administered VMS
• Contractual VMS
Horizontal
marketing systems
Multichannel
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-17
What is Channel Conflict?
•
Channel conflict
occurs when one
member’s actions prevent another
channel from achieving its goal.
• Types of channel conflict
• Vertical
Causes of Channel Conflict
Goal incompatibility
Unclear roles and rights
Differences in perception
