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Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Chapter Nine

Business Marketing Channels:

Partnerships for Customer Service

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KEY OBJECTIVES OFMARKETING CHANNELS

• DELIVERNEEDED GOOD OR SERVICE

• PLACE THE GOOD/SERVICE WHERE IT IS WANTED

• HAVE THE GOOD/SERVICE WHEN IT IS WANTED

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MARKETING CHANNEL DIFFICULTIES

• CHANNELS AREEXPENSIVE TO ESTABLISH

• CHANNELS ARECOSTLY TO COORDINATE

• CHANNELS ARESLOW TO ADAPT TO ENVIRONMENTAL CHANGES

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WHAT DISTRIBUTORS DO

CONTRIBUTIONTO MANUFACTURERS

MARKET COVERAGE

SALES CONTACTS

INVENTORY AVAILABILITY

ORDER PROCESSING

MARKET INTELLIGENCE

CUSTOMER SUPPORT

CONTRIBUTIONTO CUSTOMERS

PRODUCT AVAILABILITY

PRODUCT ASSORTMENT

FITTING ORDER QUANTITY

CREDIT

SERVICE

TECHNICAL SUPPORT

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HOW TO DESIGN A CHANNEL

Identify andforecast

user serviceneeds

Identify andforecast

user serviceneeds

Evaluatecurrent channels

and otheroptions

Evaluatecurrent channels

and otheroptions

Createa vision of

the ideal channel

Createa vision of

the ideal channel

Implementthe best option

and managethe system

Implementthe best option

and managethe system

GapAnalysis

GapAnalysis

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SOURCES OF CONFLICT INMARKETING CHANNELS

• GOAL CONFLICTSALES GROWTH VS. PROFITS

• HOW THINGS GET DONEWHO DOES WHAT & WHEN IS IT DONE

• CONFLICTING VIEWPOINTSOUR VIEWPOINT VS. YOUR VIEWPOINT

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HOW CHANNEL MEMBERS CANREACT TO CONFLICT

• EXIT—Can leave the relationship

• VOICE—Can find a means to articulate dissatisfaction

• LOYALTY—Can continue to persevere in face of

conflict

• AGGRESSION—Can openly or covertly take actions to

injure the conflict party

• NEGLECT—Can leave the conflict untreated and fade

away

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OPTIONS FOR RESOLVING CONFLICT

1. PRIVATE REFEREES—Panel of channel members serve as a forum

2. THIRD PARTY SOLUTIONS—Mediated resolution

3. EMPATHIC MECHANISMS• Use of a specialist• Join Partner’s Industry Association• Exchange personnel

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SOURCES OF CHANNEL POWER

1. REWARD POWER—Ability to provide days off for specific outcome/behavior

2. COERCIVE POWER—Ability to punish for failure to perform

3. INFORMATION POWER—Ability to obtain information others do not have

4. EXPERT POWER—Ability to gain an advantage by what you know

5. REFERENT POWER—Ability to influence by serving as the model of best practices