Marketing Management

Marketing Channel Strategies

Marketing Channels
Sets of interdependent organizations
involved in the process of making a
product or a service available for use
or consumption.
Trade = retailer, distributor or
wholesaler.

Marketing Channels Concepts

A supply chain is a system of
organizations, people, technology,
activities, information and resources
involved in moving a product or service
from supplier to customer.
Supply chain activities transform natural
resources, raw material and components
into a finished product that is delivered to
the end customer.

Marketing Channels Concepts

Logistics involves the integration of
information, transportation, inventory,
warehousing, material handling, and
packaging, and occasionally security.
Logistics is a channel of the supply chain
which adds the value of time and place
utility.

Marketing Channel Flows

Consumer Marketing Channels

Number of Intermediaries

Exclusive
Selective

Intensive

Conventional Distributions Systems

Conventional distribution systems
consist of one or more independent
producers, wholesalers, and retailers.
Each seeks to maximize its own profits,
and there is little control over the other
members and no formal means for
assigning roles and resolving conflict.

Vertical marketing systems

Vertical marketing systems (VMSs)

provide channel leadership and consist of
producers, wholesalers, and retailers
acting as a unified system and consist of:
Corporate marketing systems
Contractual marketing systems
Administered marketing systems

Vertical Marketing Systems

Corporate vertical
marketing
system integrates
successive stages of
production and
distribution under
single ownership

Vertical Marketing Systems

Contractual vertical marketing system

consists of independent firms at different
levels of production and distribution who
join together through contracts to obtain
more economies or sales impact than each
could achieve alone. The most common
form is the franchise organization.

Vertical Marketing Systems

Administered vertical
marketing system has a few
dominant channel members
without common ownership.
Leadership comes from size and
power.

Horizontal Marketing Systems

Horizontal marketing
systems are when two or
more companies at one
level join together to
follow a new marketing
opportunity. Companies
combine financial,
production, or marketing
resources to accomplish
more than any one
company could alone.

Multichannel Distribution Systems

Hybrid Marketing Channels
Multichannel Distribution systems
(Hybrid marketing channels) are when a
single firm sets up two or more marketing
channels to reach one or more customer
segments

Changing Channel Organization

Disintermediation occurs
when product or service
producers cut out
intermediaries and go
directly to final buyers,
or when radically new
types of channel
intermediaries displace
traditional ones

Strategies
1. Push Strategy
2. Pull Strategy