Chapter 15: Designing and Managing Integrated Marketing Channels
Chapter 15: Designing and Managing Integrated Marketing Channels
Agents- search for customers and may negotiate on the producer’s behalf but do
not take title to the goods
- brokers, manufacturers’ representatives, sales agent
Facilitators- assist in the distribution process but neither take title to goods nor
negotiate purchases or sales
- transportation companies, independent warehouses, banks, advertising
agencies
Marketing Channel System- the particular set of marketing channels a firm employs, and
decisions about it are among the most critical on ones
management faces
*Marketing channels must not just SERVE markets, they must also MAKE markets
Push Strategy- uses the manufacturer’s sales force, trade promotion money, or other
means to induce intermediaries to carry, promote, and sell the product to
end users
Pull Strategy- the manufacturer uses advertising, promotion, and other forms of
communication to persuade consumers to demand the product from
intermediaries, thus including the intermediaries to order it
B. Channel Development
* Deciding on the best channels might not be a problem; the problem is often to
convince the available intermediaries to handle the firm’s line
* Multiple channels must work well together and match each target customer’s preffered
ways f doing business
E. Value Networks
Demand Chain Planning- the process of designing the supply chain based on adopting a
target market perspective and working backward
SIVA
- Solutions
- Information
- Value
- Access
Value Network- a system of partnerships and alliances that a firm creates to source,
augment, and deliver its offerings
Three Channels
1. Sales channel
2. Delivery channel
3. Service channel
* The question is not WHETHER various channel functions need to be performed—they
must be—but rather, WHO is to perform them
B. Channel Levels
Channel Flows
- Forward movement
- Reverse-flow Channels
Selective Distribution- relies on more than a few but less than all of the intermediaries
willing to carry a product
Intensive Distribution- the manufacturer places the goods or services in as many outlets
as possible
* The company must constantly communicate its view that the intermediaries are
partners in a joint effort to satisfy end users of the product
Channel Power- the ability to alter channel members’ behavior so that they take actions
they would not have take otherwise
1. Coercive Power
2. Reward Power
3. Legitimate Power
4. Expert Power
5. Referent Power
Horizontal Marketing Systems- two or more unrelated companies put together resources
or program to exploit an emerging marketing opportunity
Multichannel Marketing- occurs when a single firm uses two or more marketing channels
to reach one or more customer segments
Integrated Marketing Channel System- one in which the strategies and tactics of selling
through one channel reflects the strategies and
tactics of selling through other channels
Channel Conflict- generated when one channel member’s action prevent another channel
from achieving its goal
Channel Coordination- occurs when channel members are brought together to advance
the goals of the channel, as opposed to their own potentially
incompatible goals
Vertical Channel Conflict- conflict between different levels within the same channel
Horizontal Channel Conflict- conflict between members at the same level within the
channel
Multichannel Conflict- exists when the manufacturer has established two or more
channels that sell to the same market
Diplomacy- takes place when each side sends a person or group to meet with its
counterpart to resolve the conflict
Mediation- resorting to a neutral third party skilled in conciliating the two parties’
interests
Arbitration- occurs when two or more parties agree to present their arguments to
one or more arbitrators and accept the arbitration decision
Exclusive Distribution- a strategy in which the seller allows only certain outlets to
carry its products
Exclusive Dealing- when the seller requires that these dealers not handle
competitor’s products
- often includes exclusive territorial agreements
VII. E-Commerce Marketing Practices
A. Pure-click Companies
* E-commerce websites must be set-up and operated carefully because customer service
is critical
* The most significant inhibitors of online shopping are the absence of pleasurable
experiences, social interaction, and personal consultation with a company representative
* Another benefit of providing live sales assistance is the ability to sell additional items
* Ensuring security and privacy online remains important
* The purpose of B2B sites is to make markets more efficient
1. Supplier Websites
2. Infomediaries
3. Market Makers
4. Customer communities
B. Brick-and-Click Companies
* Adding an e-commerce channel creates the threat of a backlash from retailers,
brokers, agents, and other intermediaries
* It is difficult to launch a new brand successfully, so most companies brand their online
ventures under their existing brand names
1. Offer different brands or products on the Internet
2. Offer off-line partners higher commissions to cushion the negative impact of
sales
3. Take orders on the Website but have retailers deliver and collect payment
C. M-Commerce