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Designing and Managing Integrated Marketing Channels
Anthony T. MedallaAteneo Graduate School of Business
December 1, 2009
Outline:Designing and Managing Integrated Marketing Channels
1. Importance of marketing channels and values network
Channel development Hybrid Channels
2. Understanding customer needs and value network
Factors that consumers consider Buyers/shoppers category Value Network
Outline:Designing and Managing Integrated Marketing Channels
SIVA replaced the traditional marketing 4 P’s
3. The role of marketing channels Channel functions and flows Channel levels Service sector channels
4. Channel design decisions
5. Establishing objectives and Constraints
Outline:Designing and Managing Integrated Marketing Channels
6. Identifying and Evaluating Major Channel Alternatives
Types of Intermediaries Strategies
7. Channel management decisions Selecting Channel Members Training and Motivating Channel Member
8. Channel integration systems Vertical Marketing Systems
Outline:Designing and Managing Integrated Marketing Channels
Integrated Multichannel Marketing System Horizontal Marketing Systems
9. Conflict, cooperation and competition Types of conflict and competition Causes of Channel Conflict Managing Channel Conflict Dilution and Cannibalization Legal and ethical issues in channel relations
Outline:Designing and Managing Integrated Marketing Channels
10. E-commerce marketing practices Pure-Click Companies Brick and Click Companies M-Commerce
Importance of marketing channels and values network
The importance of Channels Affect all other marketing decisions Represent a substantial opportunity cost Convert potential buyers to profitable customers Channels consist of intermediaries or trade
channels Strategies in managing intermediaries
Push strategy - intermediaries’ promotional initiative Pull strategy – manufacturer’s promotional initiative
Channel Development Successful firm branch into new markets Test new channel approach
Hybrid Channels Also known as go-to-market (direct to
customers style)
Importance of marketing channels and values network
Factors that consumers consider Price Product assortment Convenience of a channel option Own particular shopping goals (economic,
social or experiential)
Understanding customer needs and value network
Buyers/shoppers category Habitual shoppers High-value deal seekers Variety-loving shoppers High-involvement shoppers
Understanding customer needs and value network
Value Network Think of a target market Design the backward supply chain from the target market
SIVA replaced the traditional marketing 4 P’s Solutions Information Value access
Understanding customer needs and value network
Channel functions and flows Performs the moving goods from producers to consumers
Channel levels Zero level (direct marketing)- manufacturer selling directly
to consumer One level – contains one selling intermediary e.g. retailer Two level – contains two intermediary (wholesaler, retailer)
The role of marketing channels
Three level – contains three intermediary (wholesaler, jobber, retailer)
Service sector channels Services that needs to be delivered to
consumers (e.g. health/medical service, education, etc)
The role of marketing channels
System requires… Analyzing Customer needs Establishing channel objectives
Channel Design Decisions
Lot size Waiting and delivery time Spatial convenience Product variety Service backup
Analyzing Customer’s Desired Service Output Levels
Should state the channel objectives Establish targeted service output levels Put in mind objectives vary with product
characteristics Should prepare the objectives to larger environment
Establishing Objectives and Constraints
Types of Intermediaries Strategies Exclusive Distribution – limiting the number of intermediaries Selective Distribution – relies on more than a few but less
than all of the available intermediaries Intensive Distribution – places goods/products to all available
outlets.
Identifying and Evaluating Major Channel Alternatives
Selecting Channel Members- Producers should determine the selected
intermediaries- Evaluate the intermediaries reputation (yrs of
experience, carried growth, profit record, etc.)
Channel Management Decisions
Training and Motivating Channel Member Coercive power – relation withdrawal Reward power – extra benefit Legitimate power – contract/SLA ‘s Expert power – manufacturer’s expert knowledge Referent power – intermediaries’ reputation
Channel Management Decisions
Vertical Marketing Systems Corporate VMS Administered VMS Contractual VMS
Horizontal Marketing SystemsIntegrated Multichannel Marketing Systems
Channel Integration and Systems
Types of conflict and competition Vertical Channel conflict Horizontal Channel conflict Multichannel conflict
Causes of Channel Conflict Goal incompatibility Unclear roles and rights
Conflict, Cooperation and Competition
Differences in preception Intermediaries’ dependence on the manufacturer
Managing Channel Conflict Adaptation of superordinate goals Exchange of employees Joint membership in trade associations Co-optation
Conflict, Cooperation and Competition
Diplomacy, mediation, or arbitration Legal recourse
Dilution and Cannibalization-avoid to dilute brand/product due to inappropriate channels
Legal and ethical issues in channel relations
Conflict, Cooperation and Competition
Pure-Click Companies search engines Internet service providers (ISP) Commerce sites Transaction sites Content sites Enabler sites
E-Commerce Marketing Practices
Brick and Click Companies Combination of internet and retail selling
M-Commerce Purchasing thru cell phone or PDA’s
E-Commerce Marketing Practices
Summary: Designing and Marketing Integration Marketing Channels
1. Importance of marketing channels and values network
2. Understanding customer needs and value network
3. The role of marketing channels 4. Channel design decisions
5. Establishing objectives and Constraints
Summary: Designing and Marketing Integration Marketing Channels
6. Identifying and Evaluating Major Channel Alternatives
7. Channel management decisions8. Channel integration systems9. Conflict, cooperation and competition10. E-commerce marketing practices
Conclusion: Designing and Marketing Integration Marketing Channels
Successful value creation needs successful value delivery thru various marketing channels