1. Designing and Managing Integrated Marketing Channels15
Designing and Managing Integrated Marketing Channels
Marketing Management, 13th ed

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 are the key issues with e-commerce?
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3. Philips Emphasizes Value Delivery
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4. What is a Marketing Channel?
A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption.
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5. Channels and Marketing Decisions
A push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users.
A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries.
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6. Aldi Adjusted Its Strategy for the U.S. Market
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7. 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
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8. Categories of Buyers Habitual shoppers High value deal seekers
Variety-loving shoppers
High-involvement shoppers
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9. Types of Shoppers Service/quality customers Price/value customers
Affinity customers
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10. 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
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11. Figure 15.2 Marketing Channel Flows
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12. Figure 15.3 Consumer Marketing Channels
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13. Figure 15.3 Industrial Marketing Channels
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14. Designing a Marketing Channel System
Analyze customer needs
Establish channel objectives
Identify major channel alternatives
Evaluate major channel alternatives
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15. Channel Service Outputs
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Service backup
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16. Identifying Channel Alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities
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17. Number of Intermediaries
Exclusive
Selective
Intensive
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18. Terms and Responsibilities of Channel Members
Price policy
Condition of sale
Distributors’ territorial rights
Mutual services and responsibilities
Video icon links to snippet on Hasbro’s product bundling for different channel members.
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19. Figure 15.4 The Value-Adds vs. Costs of Different Channels
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20. Figure 15.5 Break-Even Chart for the Choice Between a Company Sales Force and Manufacturer’s Sales Agency
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21. Channel-Management Decisions
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
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22. Channel Power Coercive Reward Legitimate Expert Referent
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23. Channel Integration and Systems
Vertical marketing systems
Corporate VMS
Administered VMS
Contractual VMS
Horizontal marketing systems
Multichannel systems
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24. What is Channel Conflict?
Channel conflict occurs when one member’s actions prevent another channel from achieving its goal.
Types of channel conflict
Vertical
Horizontal
Multichannel
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25. Causes of Channel Conflict
Goal incompatibility
Unclear roles and rights
Differences in perception
Intermediaries’ dependence
on the manufacturer
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26. Table 15.3 Strategies for Managing Channel Conflict
Adoption of superordinate goals
Exchange of employees
Joint membership in trade associations
Cooptation
Diplomacy
Mediation
Arbitration
Legal recourse
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27. Coach Avoids Brand Dilution
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28. e-Commerce Marketing Practices
Pure-click
Brick-and-click
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29. 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. or
2. Channel images must be consistent with
the brand image.
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30. 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?
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