15-1

Chapter Questions

• What is a marketing channel system and value network?

• What work do marketing channels perform?

• What decisions do companies face in managing their channels?

• How should companies integrate channels and manage channel conflict?

• What is the future for e-commerce?

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Marketing Channels

Sets of interdependent organizations

involved in the process of making a

product or service available for use

or consumption.

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Examples of Channels

• Dell (DTC)

• Avon

• Canada Post

• Grainger (auto parts network)

• Coca-cola (bottlers)

• McDonald’s restaurants (franchisee)

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Increasing Efficiency

15-5

Consumer Marketing Channels

16-6

Wholesaling Functions

• Selling and promoting• Buying and

assortment building• Bulk breaking• Warehousing

• Transportation• Financing• Risk bearing• Market information• Management services

and counseling

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Identifying Channel Alternatives

Types of

intermediaries

Number of

intermediaries

Terms and

responsibilities

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Channel Service Outputs

Lot size

Waiting/delivery time

Spatial convenience

Product variety

Service backup

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Major Wholesaler Types

Merchant

Full-service

Limited-service

Brokers and agents

Manufacturers

Specialized

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Wholesalers’ Marketing Decisions

Target market

Product assortment

Price

Promotion

Place

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Number of Intermediaries

Exclusive

Selective

Intensive

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Market Logistics Planning

• Deciding on the company’s value proposition to its customers

• Deciding on the best channel design and network strategy

• Developing operational excellence

• Implementing the solution

16-13

Transportation Factors

• Speed• Frequency• Dependability• Capability• Availability• Traceability• Cost

16-14

Retailing

Includes all the activities involved inselling goods or services directlyto final consumers for personal,

nonbusiness use.

16-15

Retail Positioning Map

16-16

Department Store Model: Strong Retail Brand Approach

16-17

Department Store Model: The Showcase Store

16-18

Location Decision

• General business districts

• Regional shopping centers

• Community shopping centers

• Strip malls• Location within a larger

store

16-19

Indicators of Sales Effectiveness

Number of people passing by

% who enter store

% of those who buy

Average amount

spent per sale

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e-Commerce Marketing Practices

• Pure-click• Brick-and-

click• Brick-and-

mortar

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Buyer Expectations for e-commerce

• Ability to order a product online and pick it up at a convenient retail location

• Ability to return an online-ordered product to a nearby store

• Right to receive discounts based on total online and offline purchases