Lecture Marketing (11/e): Chapter 15 – Kerin, Hartley, Rudelius

McGraw­Hill/Irwin                                                                                                                                                         Copyright  © 2013 by The McGraw­Hill Companies, Inc.  All rights reserved.

15-1


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:

LO1

LO2

Explain what is meant by a marketing
channel of distribution and why
intermediaries are needed.

Distinguish among traditional
marketing channels, electronic
marketing channels, and different
types of vertical marketing systems.

15-2


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:

LO3

Describe factors that marketing
executives consider when selecting

and managing a marketing channel.

LO4

Explain what supply chain and
logistics management are and how
they relate to marketing strategy.

15-3


CALLAWAY GOLF: DESIGNING AND
DELIVERING THE GOODS FOR GREAT GOLF

15-4


FIGURE 15-1 The variety of terms used
for marketing intermediaries that vary in
specificity and use in consumer and
business markets

15-5


LO1

NATURE AND IMPORTANCE OF
MARKETING CHANNELS
THE VALUE CREATED BY INTERMEDIARIES



Marketing Channel



Functions Performed by Intermediaries
• Transactional Function
• Logistical Function
• Facilitating Function



Utilities Received by Consumers
15-6


FIGURE 15-2 Marketing channel
intermediaries perform three functions,
each consisting of different activities

15-7


CHANNEL STRUCTURE & ORGANIZATION
LO2

MARKETING CHANNELS FOR
CONSUMER PRODUCTS AND SERVICES



Direct Channel



Indirect Channel
• Retailers
• WholesalersRetailers
• AgentsWholesalersRetailers
15-8


FIGURE 15-3 Common marketing channels
for consumer products and services by the
kind and number of intermediaries

15-9


CHANNEL STRUCTURE & ORGANIZATION
LO2

MARKETING CHANNELS FOR
BUSINESS PRODUCTS AND SERVICES



Direct Channel



Indirect Channel
• Industrial Distributor
• Agents
• AgentsIndustrial Distributors
15-10


FIGURE 15-4 Common marketing channels
for business products and services by the
kind and number of intermediaries

15-11


CHANNEL STRUCTURE & ORGANIZATION
LO2

ELECTRONIC & DIRECT MARKETING CHANNELS;
MULTICHANNEL MARKETING



Electronic Marketing Channels



Direct Marketing Channels



Multichannel Marketing
15-12


FIGURE 15-5 Consumer electronic
marketing channels are similar to those for
consumer products and services

15-13


CHANNEL STRUCTURE & ORGANIZATION
LO2





DUAL DISTRIBUTION &
STRATEGIC CHANNEL ALLIANCES

Dual Distribution

Strategic Channel
Alliances

Honey Nut

Cherrios Ad

15-14


MARKETING MATTERS
LO2

Nestlé and General Mills—
Cereal Partners Worldwide

15-15


FIGURE 15-6 Three types of vertical
marketing systems: corporate, contractual
(most popular), and administered

15-16


LO2

CHANNEL STRUCTURE & ORGANIZATION
VERICAL MARKETING SYSTEMS



Vertical Marketing Systems



Corporate Systems
• Forward Integration
• Backward Integration



Contractual Systems
• Wholesaler-Sponsored Voluntary Chains
• Retailer-Sponsored Cooperatives
15-17


LO2



CHANNEL STRUCTURE & ORGANIZATION
VERICAL MARKETING SYSTEMS

Contractual Systems
• Franchising
 Manufacturer-Sponsored Retail Franchises
 Manufacturer-Sponsored Wholesale Franchises
 Service-Sponsored Retail Franchises
 Service-Sponsored Franchises



Administered Systems
15-18


LO3



CHANNEL CHOICE AND MANAGEMENT
CHANNEL CHOICE CONSIDERATIONS

Target Market Coverage (Density)
• Intensive Distribution

• Exclusive Distribution

Gucci

• Selective Distribution
15-19


LO3





CHANNEL CHOICE AND MANAGEMENT
CHANNEL CHOICE CONSIDERATIONS

Buyer Requirements
• Information

• Convenience

• Variety

• Pre- or Post-Sale
Service

Profitability
15-20


LO3

Jiffy Lube and Petco
What buyer requirements have been satisfied?

15-21


GOING ONLINE
LO3

Visit an Apple Store to
See What All the Excitement is About

15-22

USING MARKETING DASHBOARDS
LO3

Channel Sales and Profit at
Charlesburg Furniture

15-23


LO3



CHANNEL CHOICE AND MANAGEMENT
CHANNEL RELATIONSHIPS

Sources of Channel Conflict
• Vertical Conflict
• Disintermediation
• Horizontal Conflict
15-24


LO3

CHANNEL CHOICE AND MANAGEMENT
CHANNEL RELATIONSHIPS



Channel Captain



Channel Influence
• Economic

• Identification

• Expertise

• Legitimate Right

15-25