1. Designing and Managing Integrated Marketing Channels
Key Concepts

2. Marketing Management at Royal Philips Electronics
One of the world’s biggest electronics companies and Europe’s largest, with sales of over $36 billion.
Secret of RPE’s success is
Distribution

3. Marketing Channels and Value Networks
Marketing channels—sets of interdependent organizations involved in the process of making a product or service available for use or consumption.
Value network—a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings.

4. Push and Pull Strategies
Advertising and promotion
Push
Sales force and trade promotion

5. Marketing Flows

6. Commonalities Among All Channel Functions
They use up scarce resources
They can often be performed better through specialization
They can be shifted among channel members

7. Consumer and Industrial Marketing Channels

8. Channel-Design Decisions
Analyze customers’ desired service output levels
Establish objectives and constraints
Identify major channel alternatives
Evaluate the major alternatives

9. Analyzing Customers’ Desired Service Output Levels
Lot size
Waiting and delivery time
Spatial convenience
Product variety
Service backup

10. Establishing Objectives and Constraints
State channel objectives in terms of targeted service output levels.
Objectives vary with product characteristics.
Environmental factors:
Competitors’ channels
Economic conditions
Legal regulations and restrictions

11. Identifying Major Channel Alternatives
Types of intermediaries
Merchants
Facilitators
Number of intermediaries
Exclusive
Selective
Intensive
Terms and responsibilities of channel members
Price policy
Conditions of sale
Distributors’ territorial rights
Mutual services and responsibilities

12. Evaluating the Major Alternatives
Determine whether own sales force or a sales agency will produce more sales.
Estimate the costs of selling different volumes through each channel.

13. The Value-Adds vs. Costs of Different Channels

14. Channel-Management Decisions
Selecting channel members
Training and motivating channel members
Evaluating channel members
Modifying channel arrangements

15. Channel Integration and Systems
Horizontal marketing system
Vertical marketing system
Multichannel marketing systems

16. Vertical Marketing Systems (VMS)
Administered VMS
Corporate VMS
Contractual VMS

17. Contractual VMSs Wholesaler-sponsored voluntary chains
Retailer cooperatives
Wholesaler-sponsored voluntary chains
Franchise organizations

18. Horizontal Marketing Systems
Two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity.

19. Integrated Multichannel Marketing Systems
Multichannel marketing Occurs when a single firm uses two or more marketing channels to reach one or more customer segments.
Integrated marketing channel system Strategies and tactics of selling through one channel reflect the strategies and tactics of selling through other channels.

20. Conflict and Cooperation
Channel conflict
Generated when one channel member’s actions prevent another channel member from achieving its goals.
Channel coordination
Channel members are brought together to advance the goals of the channel.

21. Types of Conflict
Multichannel
Vertical

22. Causes of Channel Conflict
Unclear roles and rights
Differences in perception
Goal incompatibility
Dependence

23. Strategies for Managing Channel Conflict
Adoption of superordinate goals
Exchange of employees
Joint membership in trade associations
Co-optation
Diplomacy, mediation, or arbitration
Legal recourse

24. Legal and Ethical Issues in Channel Relations
Exclusive dealing
Exclusive territories
Tying agreements
Dealers’ rights .

25. Impact of Internet on Marketing Practices
E-business
E-commerce
E-purchasing
E-marketing

26. Breakthrough Marketing: Amazon
Started as a bookseller, now a $10 billion company!

27. Pure-Click Companies Search engines Internet service providers (ISPs)
Commerce sites
Transaction sites
Content sites
Enabler sites

28. Internet Sources of Information
Supplier Web sites
Infomediaries
Market makers
Consumer communities

29. Brick-and-Click Companies
Strategies for gaining acceptance from intermediaries when selling through intermediaries and online:
Offer different brands or products on the Internet.
Offer offline partners higher commissions to cushion the negative impact on sales.
Take orders on the Web site but have retailers deliver and collect payment.

30. Why E-Commerce Succeeds
Convenience – 24/7
Ease of use
Trust
Availability