1. Chapter 13: Marketing Channels 1 Copyright Cengage Learning 2013 All Rights Reserved Designed & Prepared by Laura Rush B-books, Ltd. Introduction to

2. Learning Outcomes LO 1 LO2 LO3 Explain what a marketing channel is and why intermediaries are needed Define the types of channel intermediaries and describe their functions and activities Describe the channel structures for consumer and business products and discuss alternative channel arrangements Discuss the issues that influence channel strategy LO4 2 Copyright Cengage Learning 2013 All Rights Reserved

3. Learning Outcomes Describe the different channel relationship types and their unique costs and benefits Explain channel leadership, conflict, and partnering Discuss channels and distribution decisions in global markets Identify the special problems and opportunities associated with distribution in service organizations LO 5 LO 6 LO 8 LO 7 3 Copyright Cengage Learning 2013 All Rights Reserved

4. Marketing Channels A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer. 4 Copyright Cengage Learning 2013 All Rights Reserved

5. Marketing Channel Functions Specialization and division of labor Overcoming discrepancies Providing contact efficiency 5Copyright Cengage Learning 2013 All Rights Reserved

6. Channel Intermediaries Retailers Merchant Wholesalers Merchant Wholesalers Agents and Brokers Agents and Brokers Take Title to Goods Do NOT Take Title to Goods 6Copyright Cengage Learning 2013 All Rights Reserved

7. Factors Suggesting Type of Wholesaling Intermediary to Use Product characteristics Buyer considerations Market characteristics 7Copyright Cengage Learning 2013 All Rights Reserved

8. Logistics The efficient and cost-effective forward and reverse flow as well as storage of goods, services, and related information, into, through, and out of channel member companies. 8Copyright Cengage Learning 2013 All Rights Reserved

9. Business Exchanges on the Internet Agents link buyers and sellers Companies drop the intermediary from the supply chain “Private exchanges” with select suppliers automate the supply chain Online http://www.sherwinwilliams.com 9 Copyright Cengage Learning 2013 All Rights Reserved

10. Alternative Channel Arrangements Multiple channels Strategic channel alliances Nontraditional channels 10Copyright Cengage Learning 2013 All Rights Reserved

11. Channel Strategy Decisions FactorsAffectingChannelChoiceFactorsAffectingChannelChoice Producer Factors Product Factors Market Factors Exclusive Distribution Selective Distribution Intensive Distribution Level of Distribution Intensity 11Copyright Cengage Learning 2013 All Rights Reserved

12. Types of Channel Relationships Cooperative Integrated Arm’s Length 12Copyright Cengage Learning 2013 All Rights Reserved

13. Managing Channel Relationships Partnering Conflict Leadership Control Power 13Copyright Cengage Learning 2013 All Rights Reserved

14. Channel Conflict Conflicts may occur if channel members: Have conflicting goals Fail to fulfill expectations of other channel members Have ideological differences Have different perceptions of reality 14Copyright Cengage Learning 2013 All Rights Reserved

15. Channel Partnering Supplier / Manufacturer Relationships Short-term Adversarial Independent Price important Long-term Cooperative Dependent Value-added services Number of Suppliers Many Few Transaction-Based Partnership-Based Information Sharing Minimal High Investment Required Minimal High 15Copyright Cengage Learning 2013 All Rights Reserved

16. Channels and Distribution Decisions for Global Markets Global Channel Development Global Channel Development Channel structure and type differ Gray marketing channels 16Copyright Cengage Learning 2013 All Rights Reserved

17. Channels and Distribution Decisions for Services Minimizing wait times Managing service capacity Improving service delivery 17Copyright Cengage Learning 2013 All Rights Reserved