Marketing Channels

Chapter 1

Marketing Channels Structure and Functions

Marketing Channels Definition

Marketing Channels are the routes or ways to market product and services thatconsumers and business buyers purchase.

Marketing channels can also be set ofinterdependent organizations involved in the process of making a product or service available for the use of consumption.

Why do marketing channels exists and change

Demand-Side factors Uncertainty of customer Uncertainty of producer

Adjustment of Assortment Discrepancy Sorting Accumulation Allocation Assorting

Why do marketing channels exists and change

Supply-Side Factors Routinization Of Transaction CRP (Continues Replenish System) Reduction in number of Contacts

Cost effectiveness Easy Handling Value Addition

Reduction in Contacts

What is the Work of Marketing Channels

Flow of Marketing Channels Producers

Distributors

Whole Seller

Retailer

Consumer

Marketing Channels Flow

A Framework For Channel Analysis

Channels Segmentation Structure Decisions Splitting the Work Load Degree of Commitment Gap Analysis Identifying Power Sources Channels Conflict Goal of Channel coordination Insights for Specific Institutions

Service Output Demand Differences

Framework of Channel Design and Implementation

Channel Design Process

Segmentation Recognize Respond Target customer Service Output demand Decision about efficient Channel Response

Framework of Channel Design and Implementation

Channel Design Process Channel Structure

What kind of intermediaries are in my channel ?

Who are they ? How many of them ?

Splitting the work load Define responsibilities Area of specialization

Framework of Channel Design and Implementation

Channel Design Process Degree of Commitment

Distribution Alliance Vertical Integration/Ownership

Gap Analysis What do I have to change ?

Framework of Channel Design and Implementation

Channel Implementation Process Channel Power

Identify Sources Channel Conflict

Identify actual and potential source Manage/Defuse Conflict

Use Power Source Goal

Channel Coordination

Framework of Channel Design and Implementation

Channel Design Channel Implementation

Insights for Specific Channel Institutions Retailing, Wholesaling and logistics, Franchising