Marketing Channels

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Chapter 12
Marketing Channels
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Chapter 12 Objectives
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Marketing Channel

• A business structure of interdependent
  organizations that reach from the point of
  product origin to the consumer with the purpose
  of moving products to their final consumption
  destination.

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Marketing Channels
Channels Fulfill Three Important Functions
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Providing Contact Efficiency
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Types of Channel Intermediaries
Retailers
Take Title to Goods
Merchant Wholesalers
Take Title to Goods
Agents and Brokers
Do NOT Take Title to Goods
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Channels for Consumer Products
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Channels for Business Products
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Alternative Channel Arrangements
NontraditionalChannels
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Channel Strategy Decisions
Levels ofDistributionIntensity
Market Factors
Intensive Distribution
Product Factors
Selective Distribution
Producer Factors
Exclusive Distribution
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Market Factors
Market FactorsThat Affect ChannelChoices
Back
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Product Factors
Product FactorsThat Affect ChannelChoices
Back
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Producer Factors
Producer FactorsThat Affect ChannelChoices
Back
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Levels of Distribution Intensity
Intensity Level
Objective
Number of Intermediaries
Intensive
Achieve mass marketselling. Convenience goods.
Many
Work with selected intermediaries. Shopping and
some specialty goods.
Several
Selective
Exclusive
Work with singleintermediary. Specialty goods
and industrial equipment.
One
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Channel Relationships
Relationships Play a Role in Building Unity
Among ChannelMembers
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Causes of Channel Conflict

• Goal incompatibility
• Manufacturer may want low price, dealers want
  high margins
• Unclear roles and rights
• HP sells PC to large accounts through own sales
  force, and licensed dealers are also trying to
  sell to those large accounts
• Differences in perception
• Optimistic vs. Pessimistic
• Dependence
• Intermediaries may be too dependent on
  manufacturer. Exclusive dealers are intimately
  affected by the manufacturers product and
  pricing decisions.