1. MARKETING MANAGEMENT 12th edition15
Designing and Managing
Value Networks and Channels
Kotler Keller

2. 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?
What is the future for e-commerce?

3. Marketing Channels Sets of interdependent organizations
involved in the process of making a
product or service available for use
or consumption.

4. Channels and Marketing Decisions
Push
Strategy
Pull
Strategy

5. Categories of Buyers Habitual shoppers High value deal seekers
Variety-loving shoppers
High-involvement shoppers

6. Buyer Expectations for Channel Integration
Ability to order a product online and pick it up at a convenient retail location
Ability to return an online-ordered product to a nearby store
Right to receive discounts based on total online and offline purchases

7. Should the 4 P’s be replaced?
Solutions
Information
Value
Access

8. Figure 15.1 Increasing Efficiency

9. 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
Provide for buyers’ payment of their bills
Oversee actual transfer of ownership

10. Figure 15.2 Marketing Channel Flows

11. Figure 15.3 Consumer Marketing Channels

12. Figure 15.3 Industrial Marketing Channels

13. Designing a Marketing Channel System
Analyze customer needs
Establish channel objectives
Identify major channel alternatives
Evaluate major channel alternatives

14. Channel Service Outputs
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Service backup

15. Identifying Channel Alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities

16. Number of Intermediaries
Exclusive
Selective
Intensive

17. Figure 15.4 The Value-Adds Versus Costs of Different Channels

18. Figure 15.5 Break-Even Chart for the Choice Between A Company Sales Force and Manufacturer’s Sales Agency

19. Channel-Management Decisions
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members

20. Channel Power
Coercive
Reward
Legitimate
Expert
Referent

21. Channel Integration and Systems
Vertical marketing systems
Corporate VMS
Administered VMS
Contractual VMS
Horizontal marketing systems
Multichannel systems

22. Figure 15.6 The Hybrid Grid

23. Managing Channel Conflict
Adoption of superordinate goals
Cooptation
Diplomacy
Mediation
Arbitration

24. e-Commerce Marketing Practices
Pure-click
Brick-and-click
Brick-and-mortar

25. Marketing Debate Does it matter where you are sold? Take a position:
Channel images do not really affect
the brand images of the products they
they sell that much.
2. Channel images must be consistent with
the brand image.

26. Marketing Discussion Think of your favorite retailers.
How have they integrated their
channel system? How would you
like their channels to be integrated?
Do you use multiple channels
from them? Why?