8/10/2019 Kotler Mm13e Media 15
1/30
Designing and Managing
Integrated
Marketing Channels
Market ing Management, 13thed
15
8/10/2019 Kotler Mm13e Media 15
2/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-2
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 channelsand manage channel conflict?
What are the key issues with e-commerce?
8/10/2019 Kotler Mm13e Media 15
3/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-3
Philips Emphasizes Value Delivery
8/10/2019 Kotler Mm13e Media 15
4/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-4
What is a Marketing Channel?
A marketing channelsystem is the
particular set of interdependent
organizations involved in the process of
making a product or service available
for use or consumption.
8/10/2019 Kotler Mm13e Media 15
5/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-5
Channels and
Marketing Decisions
A push strategyuses the manufacturerssales force, trade promotion money, andother means to induce intermediaries to
carry, promote, and sell the product to endusers.
A pull strategyuses advertising, promotion,and other forms of communication to
persuade consumers to demand the productfrom intermediaries.
8/10/2019 Kotler Mm13e Media 15
6/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-6
Aldi Adjusted Its Strategy
for the U.S. Market
8/10/2019 Kotler Mm13e Media 15
7/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-7
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 andoffline purchases
8/10/2019 Kotler Mm13e Media 15
8/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-8
Categories of Buyers
Habitual shoppers
High value deal seekers
Variety-loving shoppers
High-involvement shoppers
8/10/2019 Kotler Mm13e Media 15
9/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-9
Types of Shoppers
Service/quality customers
Price/value customers
Affinity customers
http://www.wegmans.com/8/10/2019 Kotler Mm13e Media 15
10/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-10
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
8/10/2019 Kotler Mm13e Media 15
11/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-11
Figure 15.2 Marketing Channel Flows
8/10/2019 Kotler Mm13e Media 15
12/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-12
Figure 15.3
Consumer Marketing Channels
8/10/2019 Kotler Mm13e Media 15
13/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-13
Figure 15.3
Industrial Marketing Channels
8/10/2019 Kotler Mm13e Media 15
14/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-14
Designing a
Marketing Channel System
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
8/10/2019 Kotler Mm13e Media 15
15/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-15
Channel Service Outputs
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Service backup
8/10/2019 Kotler Mm13e Media 15
16/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-16
Identifying Channel Alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities
8/10/2019 Kotler Mm13e Media 15
17/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-17
Number of Intermediaries
Exclusive
Selective
Intensive
8/10/2019 Kotler Mm13e Media 15
18/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-18
Terms and Responsibilities
of Channel Members
Price policy
Condition of sale
Distributors territorial rights Mutual services and responsibilities
http://localhost/var/www/apps/conversion/tmp/scratch_3/15_Hasbro.mov8/10/2019 Kotler Mm13e Media 15
19/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-19
Figure 15.4 The Value-Adds vs. Costs
of Different Channels
8/10/2019 Kotler Mm13e Media 15
20/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-20
Figure 15.5 Break-Even Chart for the
Choice Between a Company Sales Force
and Manufacturers Sales Agency
8/10/2019 Kotler Mm13e Media 15
21/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-21
Channel-Management Decisions
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
8/10/2019 Kotler Mm13e Media 15
22/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-22
Channel Power
Coercive
Reward
Legitimate
Expert
Referent
8/10/2019 Kotler Mm13e Media 15
23/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-23
Channel Integration and Systems
Vertical marketing
systems
Corporate VMS
Administered VMS
Contractual VMS
Horizontal
marketing systemsMultichannel
systems
http://www.sherwin-williams.com/8/10/2019 Kotler Mm13e Media 15
24/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-24
What is Channel Conflict?
Channel conflictoccurs when one
members actions prevent another
channel from achieving its goal.
Types of channel conflict
Vertical
Horizontal
Multichannel
8/10/2019 Kotler Mm13e Media 15
25/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-25
Causes of Channel Conflict
Goal incompatibility
Unclear roles and rights
Differences in perception
Intermediaries dependence
on the manufacturer
8/10/2019 Kotler Mm13e Media 15
26/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-26
Table 15.3 Strategies for Managing
Channel Conflict
Adoption of
superordinate goals
Exchange of
employees Joint membership in
trade associations
Cooptation
Diplomacy
Mediation
Arbitration
Legal recourse
8/10/2019 Kotler Mm13e Media 15
27/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-27
Coach Avoids Brand Dilution
http://www.coach.com/8/10/2019 Kotler Mm13e Media 15
28/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-28
e-Commerce Marketing Practices
Pure-click Brick-and-click
http://www.chefswarehouse.com/8/10/2019 Kotler Mm13e Media 15
29/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-29
Marketing Debate
Does it matter where you are sold?
Take a position:
1. Channel images do not really affectthe brand images of the products they
they sell that much.
or
2. Channel images must be consistent with
the brand image.
8/10/2019 Kotler Mm13e Media 15
30/30
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 15-30
Marketing Discussion
Think of your favorite retailers.
How have they integrated their
channel system? How would you like their channels to
be integrated?
Do you use multiple channels fromthem? Why?