Kotler mm 14e 15 ippt

15
Designing and
Managing
Integrated Marketing
Channels
1

Chapter Questions

What is a marketing channel system and value
network?

What work do marketing channels perform?

How should channels be designed?

What decisions do companies face in
managing their channels?

How should companies integrate channels and
manage channel conflict?

What are the key issues with e-commerce and
m-commerce?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 15-2

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

Channels and
Marketing Decisions

A push strategy uses the manufacturer’s
sales force, trade promotion money, and
other means to induce intermediaries to
carry, promote, and sell the product to end
users

A pull strategy uses advertising, promotion,
and other forms of communication to
persuade consumers to demand the product
from intermediaries

REI Employs Hybrid Channels

Buyer Expectations for
Channel Integration

Ability to order a product online and pick it up
at a convenient retail location

Ability to return an online-ordered product to a
nearby store

Right to receive discounts based on total
online and offline purchases

Table 15.1 Channel Member
Functions

Gather information

Develop and disseminate persuasive
communications

Reach agreements on price and terms

Acquire funds to finance inventories

Assume risks

Provide for storage

Provide for buyers’ payment of their bills

Oversee actual transfer of ownership

Figure 15.1 Marketing Flows
in the Marketing Channel
for Forklift Trucks

Marketing Channel Levels

Figure 15.2 Consumer Markets

Figure 15.2 Industrial Markets

Reverse-Flow Channels

Designing a
Marketing Channel System

Analyze customer needs

Establish channel objectives

Identify major channel alternatives

Evaluate major channel alternatives

Figure 15.3 What European
Consumers Value

Service Outputs of Channels
Lot size
Waiting and delivery time
Spatial convenience
Product variety
Service backup

Identifying Channel Alternatives

Types of intermediaries

Number of intermediaries

Terms and responsibilities

Number of Intermediaries

Exclusive

Selective

Intensive

Terms and Responsibilities
of Channel Members

Price policy

Condition of sale

Distributors’ territorial rights

Mutual services and responsibilities

Figure 15.4 The Value-Adds
versus
Costs of Different Channels

Figure 15.5
Break-Even Cost Chart

Channel-Management Decisions

Selecting channel members

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members

Channel Power
Coercive
Reward
Legitimate
Expert
Referent

Channel Integration and Systems

Vertical marketing
systems

Corporate VMS

Administered VMS

Contractual VMS

Horizontal
marketing systems

Multichannel
systems

Integrated Marketing Channel
System

Figure 15.6 The Hybrid Grid

Channel Conflict

What types of conflict arise in channels?

What causes conflict?

What can marketers do to resolve it?

Causes of Channel Conflict

Goal incompatibility

Unclear roles and rights

Differences in perception

Intermediaries’ dependence on manufacturer

Table 15.3 Strategies for
Managing Channel Conflict

Strategic
justification

Dual compensation

Superordinate goals

Employee exchange

Joint memberships

Cooptation

Diplomacy

Mediation

Arbitration

Legal recourse

E-Commerce
Pure-click
Brick-and-click

M-Commerce

For Review

What is a marketing channel system and value
network?

What work do marketing channels perform?

How should channels be designed?

What decisions do companies face in
managing their channels?

How should companies integrate channels and
manage channel conflict?

What are the key issues with e-commerce and
m-commerce?

Kotler mm 14e 15 ippt

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