322_Marketing Channels

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Marketing Channels and Supply Chain Management 10

Marketing or Distribution Channel : 

Marketing or Distribution Channel A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

Channel Functions : 

Contact Financing Information Risk Taking Promotion Matching Negotiation Physical Distribution These functions should be assigned to the channel member who can add the most value for the cost Channel Functions

Consumer and Business Channels : 

Consumer and Business Channels

Channel Behavior : 

Channel Behavior The channel will be most effective when: each member is assigned tasks it can do best. all members cooperate to attain overall channel goals. If this does not happen, conflict occurs: Horizontal Conflict occurs among firms at the same level of the channel (e.g., retailer to retailer). Vertical Conflict occurs between different levels of the same channel (e.g., wholesaler to retailer). Some conflict can be healthy competition.

Channel Conflict : 

Channel Conflict When it decided to sell its familiar containers at retail through Target stores, Tupperware avoided conflicts with its army of in-home sales consultants by inviting them into the stores to demonstrate the products.

Conventional vs. Vertical Marketing System : 

Conventional vs. Vertical Marketing System

Types of Vertical Marketing Systems : 

Corporate VMS Common Ownership at Different Levels of the Channel (e.g., Sears) Contractual VMS Contractual Agreements Among Channel Members (e.g., ACE Hardware) Administered VMS Leadership is Assumed by One or a Few Dominant Members (e.g., Kraft) Types of Vertical Marketing Systems Control High Low

Innovations in Marketing Systems : 

Innovations in Marketing Systems Two or more companies at one channel level join together to follow a new marketing opportunity. Example: Banks in grocery stores A single firm sets up two or more marketing channels to reach one or more customer segments. Example: Retailers and catalogs Horizontal Marketing System Hybrid Marketing System

Number of Intermediaries : 

Number of Intermediaries Intensive distribution Exclusive distribution Selective distribution

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