1. C h a n n e l s
C h a n n e l s

2. CHANNELS FROM INSTITUTIONS TO RELATIONSHIPS
by Dr. Ted Mitchell

3. HOW DO GOODS GET FROM PRODUCERS TO MANUFACTURERS TO USERS?

4. DIFFERENT PERSPECTIVES
INSTITUTIONAL
FUNCTIONAL
SYSTEM FLOW
RELATIONSHIP

5. DIFFERENT PERSPECTIVES
INSTITUTIONAL
THE CLASSIC APPROACH TO UNDERSTANDING CHANNELS
FUNCTIONAL
SYSTEM FLOW
RELATIONSHIP

6. From An Institutional Perspective There Are Six Types of Public Warehouses
Special Commodity Warehouses
Field Warehousing
Cold Storage
Household Storage
General Warehouse
Bonded Warehouse

7. WHY DO MIDDLEMEN COME INTO THE SYSTEM?
The Institutional Perspective
Does Not Explain...

8. WHY DO MIDDLEMEN COME INTO THE SYSTEM?
The Institutional Perspective Does Not Explain
WHY DO MIDDLEMEN COME INTO THE SYSTEM?

9. WHY DO MIDDLEMEN COME INTO THE SYSTEM
WHY DO MIDDLEMEN COME INTO THE SYSTEM? MIDDLEMEN ARISE BECAUSE THEY ADD ECONOMIC VALUE TO THE ECONOMIC DELIVERY SYSTEM
The Institutional Perspective Does Not Explain

10. M M M M M M M M 8
PRODUCERS
CONSUMERS 8 C C C C C C C C

11. M M M M M M M M 8
PRODUCERS
CONSUMERS 8 C C C C C C C C

12. 64 TRANSACTIONS M M M M M M M M 8 8 PRODUCERS CONSUMERS C C C C C C C

13. 16 TRANSACTIONS M M M M M M M M MIDDLEMAN 8 8 PRODUCERS CONSUMERS C C

14. CHANGES IN PERSPECTIVE
INSTITUTIONAL
FUNCTIONAL
ORGANIZE INSTITUTIONS BY THE FUNCTIONS THEY PERFORM
SYSTEM FLOW
RELATIONSHIP

15. GENERAL FUNCTIONS OF MIDDLEMEN
PROVIDE CONTACT EFFICIENCY AND REDUCE TRANSACTION COSTS
ACCUMULATING, GRADING, STORING, BREAKING BULK, CREATING ASSORTMENTS
SEARCHING AND INFORMATION SERVICES

16. MIDDLEMAN IN THE MARKETING CHANNEL CONTINUE TO EXIST BECAUSE THEY PERFORM FUNCTIONS THAT ADD VALUE TO THE EXCHANGE SYSTEM

17. FUNCTIONS PROVIDED
Carrying Physical Inventory
Freight Consolidation Planning
Creating Assortments
Assembling
Packaging
Packing

18. FUNCTIONS CONTINUED Storing Goods in Transit
Controlling Goods in Transit
credit financing
revenue taxes and duties
Yard Storage
Handling and Storing Containers
Order Filling
Dry Bulk Commodity
handling, storage, bagging
ETC.....

19. MIDDLEMEN CAN BE ELIMINATED FROM A MARKETING CHANNEL
THE FUNCTIONS CAN NOT BE ELIMINATED AND MUST BE PERFORMED BY SOMEBODY

20. DIFFERENT PERSPECTIVES
INSTITUTIONAL
FUNCTIONAL
SYSTEM FLOW
ORGANIZING AND INTEGRATING FUNCTIONS
PLAYERS AND ROLES

21. INFORMATION
TITLE
PHYSICAL
MONEY
PROMOTION
RETURNS

22. WHAT FLOWS AM I IN?
WHAT FLOWS SHOULD I BE IN?

23. CHANNEL FLOWS AND VERTICAL MARKETING SYSTEMS
PHYSICAL PRODUCT FLOWS
TITLE/OWNERSHIP FLOWS
PAYMENT FLOWS
PROMOTION FLOWS
INFORMATION FLOWS
NEGOTIATION
ORDERING
CREDIT/RISK TAKING
FINANCIAL FLOWS

24. LENGTH OF TRADITIONAL CHANNELS WERE CONSTRAINED TO DISCUSSIONS OF CONSTANT PRODUCT FORM AND INSTITUTIONS THAT HANDLED THE PRODUCT.
SYSTEMS VIEW EXTENDED THE CHANNEL LENGTH FROM RAW MATERIAL TO LAND FILL.
SYSTEMS VIEW INCLUDES NEW PLAYERS SUCH AS TRANSPORTATION FIRMS, BANKS, MARKET RESEARCH HOUSES, GOVERNMENT AGENCIES.

25. RAW MATERIALS
RECYCLE & LAND FILL

26. TO STUDY ONE LEVEL AT A TIME
THE TRADITIONAL ECONOMIC VIEW OF CHANNELS WAS
TO STUDY ONE LEVEL AT A TIME

27. TO STUDY ONE LEVEL AT A TIME
THE TRADITIONAL ECONOMIC VIEW OF CHANNELS WAS
TO STUDY ONE LEVEL AT A TIME

28. TO STUDY ONE LEVEL AT A TIME
THE TRADITIONAL ECONOMIC VIEW OF CHANNELS WAS
TO STUDY ONE LEVEL AT A TIME

29. CHANNEL MEMBERS CAN MAKE MORE MONEY IF THEY COOPERATE THAN IF THEY COMPETE WITH EACH OTHER!

30. TO COOPERATE ALL THE CHANNEL MEMBERS MUST ADOPT THE MARKETING CONCEPT AND TARGET THE SAME MARKET SEGEMENT OR SEGMENTS

31. IDENTIFY TARGET MARKET

32. DESIGN BACKWARDS FROM TARGET MARKET

33. VERTICAL MARKETING SYSTEM

34. DIFFERENT PERSPECTIVES
INSTITUTIONAL
FUNCTIONAL
SYSTEM FLOW
RELATIONSHIP
INTERACTIVE EVOLUTION OF THE THINGS CHANNEL MEMBERS AND TRADING PARTNERS DO FOR EACH OTHER

35. Types of Vertical Marketing Systems p. 210
1) Administered System (Power-Based Leadership) Safeway, Walmart, P&G
2) Contractual Systems Most distribution systems Franchising system
3) Corporate vertical Gas stations Shell, BP Apple stores Ford, GM

36. RELATIONSHIP MANAGEMENT
A CHANNEL IS MADE OF PEOPLE AND GROUPS OF PEOPLE DOING THINGS FOR AND TO EACH OTHER
PLAYERS, ACTORS, COALITIONS
THE PATTERN OF INTERDEPENDENT ACTIONS THAT ARE DONE BETWEEN PEOPLE IN A CHANNEL ARE ANTICIPATED AND CO-INTENDED
ROLES, STRATEGIES, POLICIES, SCENARIOS
COMMUNICATION AND PROMOTIONAL FLOWS BETWEEN CHANNEL MEMBERS IS
BARGAINING, NEGOTIATION, JOINT PROBLEM SOLVING

37. THE NEED FOR A RELATIONSHIP THAT ALLOWS FOR CONTINUAL NEGOTIATION, BARGAINING, AND JOINT PROBLEM SOLVING