Marketing Channels and E- Marketing Chapter Nine M arket-Based Management, 4 th edition

9-2 Marketing Channels and E-Marketing Chapter Nine – Marketing Channels and Channel Strategy – Alternative Channel Systems – Building Value with Channel Systems – Profit Impact of Channel Strategies

9-3 Marketing Channels and Channel Strategy What are Marketing Channels? What Types of Marketing Channels exist? –Direct –Indirect –Mixed What is the primary objective of a Marketing Channel? What three areas of performance will the choice of channel impact? 1.Customer Value 2.Sales Revenues 3.Profitability How can Marketing Channels serve as a source of Competitive Advantage?

9-4 Marketing Channel Performance Channel Performance Customer Reach (Volume) Operating Efficiency (Cost to Serve) Service Quality (Retention)

9-5 Alternative Channel Systems Direct Channel Systems Mixed Channel Systems Indirect Channel Systems Which Channel system is most preferred by firms? Channel Intermediaries Target Market Customers

9-6 Direct Channel Systems Direct Sales Direct Marketing Online Marketing Tele- Marketing Reps/ Agents Consumer Markets

9-7 Indirect Channel Systems Why do firms use Indirect Channel Systems? When is it appropriate to use Mixed Channel Systems? Indirect Channel Systems Reps/ Agents Wholesalers Retailers Consumer Markets

9-8 Channel Systems that Build Customer Value Brand Benefits Service Benefits Product Benefits Price Customer Value How does a channel system enhance customer value? –Increasing Customer Benefits –Lowering Cost of Purchase Non-price Costs

9-9 Building Value Delivering Product Benefits –Product Quality –Product Assortment –Product Form Delivering Service Benefits –After-Sale Services –Availability/Delivery –Transaction Services Improving Cost Efficiency –i.e. making a product readily available

9-10 Channel Systems and Competitive Advantage Sales Force Advantage Sales Productivity Distribution Advantage

9-11 Profit Impact of Alternative Marketing Channels $15.08

9-12 Takeaways / Review Building Customer Value and a Competitive Advantage with Channels Profit Impact of Channel Selection Marketing Channels and Systems Channel Performance Alternative Systems –Direct –Indirect –Mixed

9-13 Marketing Performance Tools Channel Marketing Profitability

9-14 Marketing Performance Tools Channel Break-Even Volume/Price