MARKETING AN INTRODUCTION Armstrong/Kotler MARKETING AN INTRODUCTION Armstrong/Kotler
10
Marketing Channels:
Delivering Customer Value
10
10- 2
Chapter Outline
• Supply Chains and the Value Delivery Network
• The Nature and Importance of Marketing Channels
• Channel Behavior and Organization
• Channel Design Decisions
• Channel Management Decisions
• Marketing Logistics and Supply Chain
Management
Value Delivery Network
A value delivery network is made up of the company, suppliers,
distributors, and
ultimately customers who “partner” with each other to
improve the
performance
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Marketing Channel
Marketing channel is a set of interdependent
organizations that help make a
product or service available for use
or consumption by the
consumer or business user.
Channel Members Add Value
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Discussion Question How do
manufacturers use online
distributors for
their products?
Channel Members Add Value
Information Promotion Contact
Matching Negotiation Physical distribution
Financing Risk taking
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Number of Channel Levels
Discussion Question Why might a
company like Dell have several
types of channels
including direct?
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Channel Behavior
Channel conflict is disagreement among marketing channel members
on goals, roles, and rewards.
Horizontal conflict
Vertical
conflict
Vertical Marketing Systems
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Types of Vertical Marketing Systems
Corporate VMS
• Integrates successive stages of production and distribution under single ownership
Contractual VMS
• Consists of independent firms at different levels of production and distribution who join together through contracts – includes franchises
Administered VMS
• Leadership is assumed not through common ownership or
contractual ties but through the size and power of one or a few
dominant channel members.
Types of Franchises
Manufacturer- sponsored
retailer
Manufacturer- sponsored wholesaler Service-firm-
sponsored
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Horizontal Marketing Systems
Horizontal marketing system is a channel
arrangement in
which two or more companies at one
level join together to follow a new
marketing
opportunity.
Multichannel Distribution Systems
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Changing Channel Organization
Disintermediation is the cutting out of marketing channel
intermediaries by product or service producers, or the displacement of traditional
by radical new types of intermediaries.
Discussion Question In what types of
industries do we see the most
disintermediation?
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Channel Design Decisions
Marketing channel design includes designing
effective marketing channels by analyzing consumer
needs, setting channel
objectives, identifying major channel alternatives, and
evaluating them.
Number of Marketing Intermediaries
Selective Distribution
Exclusive Distribution
Intensive
Distribution
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Channel Management Decisions
Marketing channel
management involves selecting, managing, and motivating individual
channel members and evaluating their
performance over time.
Public Policy and Distribution Decisions
Be careful when using:
Exclusive dealing Territorial agreements
Tying
agreements
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Marketing Logistics
Marketing logistics (or physical distribution)
involves the planning, implementing, and
controlling the physical flow of materials, final goods, and related information from points of
origin to points of consumption to meet customer
requirements at a profit.
Supply Chain management
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Major Logistics Functions
Warehousing Inventory
management
Transportation Logistics Information
management
Integrated Logistics Management
Integrated logistics management is the logistics
concept that emphasizes teamwork, both inside the company and among all the marketing channel
organizations, to maximize
