chapter 13 - designing and managing integrated marketing channels
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13Designing and Managing
Integrated Marketing Channels
Chapter Questions
What is a marketing channel system and value network?What work do marketing channels perform?What decisions do companies face in designing, managing and integrating their channels?What key issues do companies face in e-commerce?
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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.
Intermediaries
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Merchants
Agents
Facilitators
Hybrid Channels
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Direct
Online
Indirect
Customer expectations from channel integration
Ability to order a product online and pick it up at a convenient retail locationAbility to return an online-ordered product to a nearby storeRight to receive discounts based on total online and offline purchases
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Push vs. Pull Marketing
Push strategy – using manufacturer’s sales force, trade promotion money and other means to induce intermediaries to carry, promote and sell the product to end users.
Pull strategy - using advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries.
What European Consumers Value
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The Role of Marketing Channels
Gather customer and other informationDevelop and disseminate persuasive communications to stimulate purchasingReach agreements on price and other termsAcquire funds to finance inventoriesAssume risksProvide place for storageProvide buyers with payment optionsOversee actual transfer of ownership
Marketing Flows in the Marketing Channel
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Marketing Channel Levels
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Consumer Marketing Channels
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Industrial Marketing Channels
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Reverse-Flow Channels
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Designing a Marketing Channel System
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
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Analyzing Csstomers’ Desired Service Output Levels
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Service backup
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Establishing Objectives and Constraints
Targeted service output levelsMarkets chosen to serveProduct characteristicsStrengths and weaknesses of intermediariesCompetition’s channelsEnvironmental changes
Identifying Channel Alternatives
Types of intermediaries(merchants, agents, facilitators)
Number of intermediaries(exclusive, selective, intensive)
Terms and responsibilities(price policy, sale conditions, distributors’ territorial rights,
mutual services/responsibilities)13-17
Number of Intermediaries
Exclusive
Selective
Intensive
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Evaluating Major Channel Alternatives
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Break-Even Cost Chart
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Channel-Management Decisions
Selecting channel membersTraining and motivating channel membersEvaluating channel membersModifying channel members
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Channel Power
Coercive
Reward
Legitimate
Expert
Referent
Channel Integration and Systems
Vertical marketing systems
Corporate VMSAdministered VMSContractual VMS
Horizontal marketing systems
Integrated multi-channel systems
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Integrated Marketing Channel SystemThe Hybrid Grid
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Channel Conflict and Cooperation
Channel conflict occurs when one member’s actions prevent another channel from achieving its goal.Types: Vertical, Horizontal, MultichannelCauses: goal incompatibility, perception differences, dependence
Channel cooperation occurs when channel members are brought together to advance the goals of the channel, as exposed to their own potential incompatible goals.
Strategies for Managing Channel Conflict
Strategic justificationDual compensationSuperordinate goalsEmployee exchangeJoint memberships
CooptationDiplomacyMediationArbitrationLegal recourse
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E-Commerce
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Pure-click companies(search engines, ISPs, commerce / transaction /
content / enabler sites; B2C, B2B )
Brick-and-click companies
M-Commerce
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