DESIGNING AND

MANAGING
INTEGRATED
MARKETING
CHANNELS
PRESENTED BY :-
 Zoya Gulzar

 Iqra Kanwal Khan (4409)

 Rabia Gulshan (4483 )

 Iqra Kaleem(4504)

 Hajra Qudsia (4491)

 Sundas Abbasi (4490)

MARKETING CHANNELS AND VALUE
NETWORKS

 A network which creates partnership and value

in purchase, production and selling of products is
referred to as value network.
 Core competency for a company lies in developing
a product which satisfies a particular need of the
market.
 A company if it decides to sell a product on its
own than it is diverting from main line business
resulting in operational difficulties.
MARKETING CHANNELS AND VALUE
NETWORKS

 Marketing channel is ears and eyes of companies

in the market.
 They provide companies with valuable
information of customers, competitors and other
players in the market.
 Dell’s computer exclusively uses direct
marketing.
IMPORTANCE OF CHANNELS
 Marketing channels are diverse methods through
which customers, whether potential or loyal,
engage with information about what your
company has to offer.
 No matter what type of activity, marketers need
to know how to identify which channels work for
their potential buyers and how to use the
information wisely.
 ROLE OF MARKETING
CHANNELS

Channel Function & flows

o It perform the work of moving goods from
producers to consumers.
o It overcomes the time , gap , place that
separate goods and services from those
who need or want them .
CONT...
 KEY FUNCTIONS :-

Forward flow: Company to customer

Backward flow: Customer to company

Both directions:Negotiation . Risk taking etc

 CHANNEL LEVELS

 Zero level channel

 One level channel

 Two level channel

 Three level channel

SERVICE SECTOR CHANNEL

 As internet and other services are advance,

service industries such as banking ,insurance ,
travel ,and stock buying and delling are operated
through new channels

 Marketing channels also keep changing in

“person marketing “
HYBRID CHANNELS AND MULTICHANNEL
MARKETING

 Two or more marketing channels set up by a

single firm to reach one or more customer
segments. In this form of multichannel
distribution a variety of direct and indirect
approaches are used to deliver the firm's goods to
its customers
VALUE NETWORKS
 A set of connections between organizations
and/or individuals interacting with each other to
benefit the entire group.
 A value network allows members to buy and sell
products as well as share information.
 These networks can be visualized with a simple
mapping tool showing nodes (members) and
connectors (relationships).
ROLE OF MARKETING CHANNELS
 A marketing channel is a set of interdependent
organizations involved in the process of placing
products and services with consumers. ... The
participants in the marketing channel provide a
number of key functions which increase the
effectiveness of placement through the channel.
ROLE OF MARKETING CHANNELS
 Channel Functions and Flows a marketing
channel performs the work of moving goods from
producers to consumers. Some functions
constitute a forward flow of activity from the
company to the customer other functions
constitute a backward flow from customer to the
company. A manufacturer selling a physical
product and services might require three
channels: a sales channel, and a service channel.
CHANNEL DESIGN DECISION BY
RABIA GULSHAN

 Designing a channel calls analyzing customers

needs and wants, establish channel objectives
and constraints, identify & evaluate major
channel alternatives.
ANALYZING CUSTOMERS NEEDS &
WANTS
 the marketers must understand the output levels
desired by the target customers.
Channel produce five service outputs
1) Lot size: No of units a customer can buy.
2) Waiting and delivery time
3) Spatial Convenience: Ease of access.
4) Product variety
5) Service backup: add on services
DETERMINE THE CHANNEL OBJECTIVES &
CONSTRAINTS

 Channel objectives should be stated in terms of

targeted service output levels
 Channel institutions should arrange their
functional tasks to minimize total channel costs
with respect to desired levels of service outputs
 Channel objectives vary with product
characteristics
DETERMINE THE CHANNEL OBJECTIVES &
CONSTRAINTS

 Besides the target market, the company’s

channel objectives are influenced by
 The nature of its product

 Company characteristics

 Characteristics of intermediaries

 Competitor’s channel

 Environmental factors
IDENTIFY THE MAJOR CHANNEL
ALTERNATIVES

 Channel alternatives differ in three ways…

1.Types of intermediaries
2. number of intermediaries needed
3. Terms & responsibilities of channel memebers
EVALUATE MAJOR CHANNEL
ALTERNATIVES

Each channel alternatives needs to be evaluated

against….
 Economic criteria

 control criteria

 adaptive criteria
CHANNEL MANAGEMENT
DECISIONS
After a company has chosen a channel alternative,
individual intermediaries must be selected,
motivated & evaluated.

Channel decision process steps are:

 Selecting Channel Members

in order to select them, producers should determine

what characteristics distinguish the better
intermediaries
CHANNEL MANAGEMENT
DECISIONS
 Motivating Channel Members
Constant training, supervision & encouragement
Producers can draw on the following types of power
to elicit cooperation:
 Coercive power

 Reward power

 Legitimate power

 Expert power

 Referent power
CHANNEL MANAGEMENT
DECISIONS
 Evaluating Channel Members
Underperformers need to be counseled, retrained or re-
motivated.
 Modifying Channel Arrangements
Periodic modification to meet new conditions in the
marketplace. Modification is necessary when:
 Distribution channel is not working as planned.
 Consumer buying patterns change.
 Market expands.
 New competition arises.
 Innovative channels emerge.
 Product moves into later stages in the product life
cycle.
CHANNEL MANAGEMENT
DECISIONS
 CHANNEL EVOLUTION
3 levels of channel adaptation can be distinguished:
 Adding or dropping individual channel members.

 Adding or dropping particular market channels.

 Developing a totally new way to sell goods in all

markets.
 GLOBAL CHANNEL CONSIDERATIONS:

 The use of domestic middlemen who provide

marketing services from a domestic base.
 The use of foreign middlemen.
CHANNEL INTEGRATION AND
SYSTEM
 CHANNEL INTEGRATION AND
SYSTEM
 Distribution channel don’t exist

 Recent Growth

 Vertical
 Horizontal
 Multichannel Marketing System
 VERTICAL MARKETING SYSTEM
VMS
 Vertical channel consist of producer, wholesalers
and retailers.

 Control channel behavior

 Eliminate conflicts

 Achieve economies though size, bargaining power

and elimination of duplicated services
 TYPES OF VMS

 Corporate VMS

 Administered

 Contractual
 TYPES OF VMS
 Corporate VMS
VMS combines successive stages of production
and distribution under single ownership
 Administrated VMS

 Coordinates successive stages of production and

distribution through the size and power of one of
the members.
 VMS relies on Distribution programming
 Distribution Programming builds a planned,
professionally managed vertical system that
meets the need of both the manufacturer and
distributors.
 TYPES OF VMS
 Contractual VMS
consist of independent firms at different levels of
production and distribution, integrating their
programs.
Obtain more economies or sales impact than they
could achieve alone

TYPES OF CONTRACTUAL VMS

 Wholesaler
 Retailer
 Franchise organizations
 HORIZONTAL MARKETING
SYSTEM
 HMS in which two or more unrelated companies
put together resources.

 Lacks capital

 Jointly work together permanent or

temporary

 EXAMPLE supermarkets
 INTEGRATING MARKETING
 Different channels of distribution of a single
product

 Three Benefits

Increased market coverage

Lower channel cost
More customized selling

E-PURCHASE facilities for product selection

 PROBLEMS WITH INTEGRATED
MARKETING

 Conflict with control

 Financial issue

 Difficult to decide which channel is selling more

efficiently
CONFLICT COORPERATION AND
COMPETITION
TYPES OF CONFLICT AND COMPETITION
TYPES OF CONFLICT AND COMPETITION
 Horizontal channel conflict
 Vertical channel conflict

 Multi channel conflict

CAUSES OF CHANNEL CONFLICT
 Goal incompatibility
 Unclear roles and rights

 Differences in perception

 Intermediaries dependence on manufacturer

MANAGING CHANNEL CONFLICT
 Adoption of super ordinate goals
 Exchange of employees

 Co-opetation

 Legal route
DILUTION AND CANNIBALIZATION
 Marketers must be careful not to dilute their
brands through inappropriate channels
E- COMMERCE MARKETING
M-COMMERCE
 Mobile commerce also known as M commerce or
mcommerce is the ability to conduct commerce
using a mobile device such as a mobile phone
 E purchasing
 E marketing

 Pure click companies

 Brick and click companies

THANK YOU
!!!
ANY QUESTION
??