kotler basic of marketing

7/29/2019 Kotler Basic of marketing

1/28

Copyright 2009, Prentice-Hall, Inc. 13-1

A Framework for

Marketing Management

Chapter 13

Designing and Managing IntegratedMarketing Channels


2/28


Chapter Questions

What are marketing channel systems and

value networks?

What functions 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?


3/28


Marketing Channels and Value

Networks Marketing channelssets of interdependent

organizations involved in the process of

making a product or service available for use

or consumption. Value networka system of partnerships

and alliances that a firm creates to source,

augment, and deliver its offerings.


4/28


Push and Pull Strategies

Push strategyuses the manufacturers

sales force and trade promotion to induce

intermediaries to carry, promote, and sell the

products to end users. Pull strategymanufacturer uses

advertising and promotion to persuade

consumers to ask intermediaries for theproduct, thus inducing the intermediaries to

order it.


5/28


Role of Marketing Channels

Performs the work of moving products from

producers to consumers, overcoming time,

place, and possession gaps.

Forward flowfunctions

Backward flowfunctions

Both directions


6/28


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.


7/28


Channel Levels

Zero-level channel

One-level channel

Two-level channel

Three-level channel


8/28


Channel-Design Decisions

Analyze customers desired service output

levels

Establish objectives and constraints

Identify major channel alternatives

Evaluate the major alternatives


9/28


Analyzing Customers Desired Service

Output Levels Lot size

Waiting and delivery time

Spatial convenience

Product variety

Service backup


10/28


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


11/28


Identifying Major Channel Alternatives

Types of intermediaries

Merchants

Facilitators

Number ofintermediaries

Exclusive

Selective

Intensive

Terms and

responsibilities of

channel members

Price policy Conditions of sale

Distributors territorial

rights

Mutual services and

responsibilities


12/28


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.


13/28


Channel-Management Decisions

Selecting channel members

Training and motivating channel members

Evaluating channel members

Modifying channel arrangements


14/28


Channel Integration and Systems

Vertical marketing system

Horizontal marketing system

Multichannel marketing system


15/28


Vertical Marketing System (VMS)

Producer, wholesaler(s), and retailer(s) acting

as a unified system.

Types:

Corporate VMS

Administered VMS

Contractual VMS

Wholesaler-sponsored voluntary chains Retailer cooperatives

Franchise organizations


16/28


Horizontal Marketing Systems

Two or more unrelated companies put

together resources or programs to exploit an

emerging marketing opportunity.


17/28


Integrated Multichannel Marketing

Systems Multichannel marketinga single firm uses two or

more marketing channels to reach one or morecustomer segments.

Integrated marketing channel systemthe

strategies and tactics of selling through one channelreflect the strategies and tactics of selling throughother channels.

Benefits: Increased market coverage Lower channel costs

More customized selling


18/28


Conflict, Cooperation, and Competition

Channel conflictgenerated when one

channel members actions prevent another

channel member from achieving its goal.

Channel coordinationchannel membersare brought together to advance the goals of

the channel.


19/28


Types of Conflict

Vertical channel conflictbetween different

levels within the same channel.

Multichannel conflictmanufacturer has

established two or more channels that sell tothe same market.


20/28


Causes of Channel Conflict

Goal incompatibility

Unclear roles and rights

Differences in perception

Dependence


21/28


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


22/28


Legal and Ethical Issues in Channel

Relations Exclusive dealing

Exclusive territories

Tying agreements

Dealers rights


23/28


E-Commerce Marketing Practices

E-businessuse of electronic means and platforms

to conduct a companys business.

E-commercethe company or site transacts or

facilitates the online selling of products and services. E-purchasingcompanies buy goods, services,

and information from online suppliers.

E-marketingcompany efforts to inform buyers,

communicate, promote, and sell its offerings online.


24/28


25/28


Internet Sources of Information

Supplier Web sites

Infomediaries

Market makers

Customer communities


26/28


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.


27/28


M-Commerce

Mobile commerce

Using cellular phones or personal digital

assistants to wirelessly connect to the

Internet.

Success will be driven by:

Convenience

Ease of use Trust

Widespread availability


28/28


All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc.Publishing as Prentice Hall

kotler basic of marketing

Documents