Managing Marketing Channels

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Presentation transcript:

Managing Marketing Channels Chapter 16 Selecting and Managing Marketing Channels Marketing Management Tenth Edition Philip Kotler

Objectives Work Performed by Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Dynamics

How a Distributor Reduces the Number of Channel Transactions A. Number of contacts without a distributor M x C = 3 X 3 = 9 1 3 2 4 5 6 7 8 9 = Manufacturer = Customer

How a Distributor Reduces the Number of Channel Transactions B. Number of contacts with a distributor M x C = 3 + 3 = 6 Store 1 2 3 4 5 6 = Manufacturer = Distributor = Customer

Distribution Channel Functions Information Transfer Communication Payments Negotiation Physical Distribution Ordering Risk Taking Financing

Consumer Marketing Channels Manufacturer 0-level channel Consumer 1-level channel Manufacturer Retailer Consumer  Mfg 2-level channel Wholesaler Retailer Consumer  Mfg 3-level channel Wholesaler Jobber Retailer Consumer 

Industrial Marketing Channels Manufacturer Consumer Industrial distributors Manufacturer’s representative Manufacturer’s sales branch

Customers’ Desired Service Levels Lot size Waiting time Spatial convenience Product variety Service backup

Level of sales (dollars) Break-Even Cost Chart Selling costs (dollars) Level of sales (dollars) Manufacturer’s sales agency Company sales force SB

Selecting Training Motivating Evaluating Channel Management Decisions FEEDBACK Training Motivating Evaluating

Common Ownership at Different Corporate Common Ownership at Different Levels of the Channel Types of Vertical Marketing Systems Administered Leadership is Assumed by One or a Few Dominant Members Contractual Contractual Agreement Among Channel Members

Conventional Distribution Channel vs. Vertical Marketing Systems Manufacturer Manufacturer Wholesaler Wholesaler Retailer Retailer Consumer Consumer

Causes of Channel Conflict Incompatibility Difference in Perception Dependence

Legal & Ethical Issues in Channel Relations Exclusive Dealing Exclusive Territories Tying Agreements Dealers’ Rights

Review Work Performed by Marketing Channels Channel-Design Decisions Channel-Management Decisions Channel Dynamics

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