Professor Chip Besio
Cox School of Business
Southern Methodist University

The variety of terms used for marketing intermediaries that vary in use in consumer and business markets

Intermediaries minimize transactions and the cost of distribution for producers and customers

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

Marketing channel intermediaries perform three functions, each consisting of different activities

Common marketing channels for consumer offerings by the kind and number of intermediaries

Common marketing channels for business offerings by the kind and number of intermediaries

CUSTOMER
ACQUISITION
One Telecom Company’s Consumer Market Channels
CUSTOMER
DEVELOPMENT
MASS
MEDIA
MAILBOX
MARKETING
FACE TO
FACE
LIFESTYLE
INTERCEPT
AFFINITY
Business
Office
Smart
Moves
Newcomer
Agent s
Best Customer
Centers
Advertising
Response
Direct
Mail
RSC Service
Upselling
TV
Radio
Direct Mail
Prin t
Specialty
Outbound
Telemarketin g
Welcome
Package
Catalog
Internet
Retail
Stores
Express
Kiosks
National
Retailers
Local Agents
Direct Sales
Military Employee/
Employer
Campu s Association s
Retiremen t
Co-Marketing
Partners
Kids
Away
Event
Marketin g
On the
Move
Director y

CHANNEL STRUCTURE & ORGANIZATION
ELECTRONIC & DIRECT MARKETING CHANNELS;
MULTICHANNEL MARKETING
 Electronic Marketing Channels
 Direct Marketing Channels
 Multichannel Marketing

Consumer electronic marketing channels are similar to those for consumer and business offerings

CHANNEL STRUCTURE & ORGANIZATION
DUAL DISTRIBUTION &
STRATEGIC CHANNEL ALLIANCES
 Dual Distribution
 Strategic Channel Alliances

HELP YOUR CHILD FEEL BETTER WITH
TRIAMINIC
®
PRODUCTS AND A REDBOX
MOVIE RENTAL

The Top Five
Reasons for Selling Through Distributors
1.
Customers demand it.
2.
Market access.
3.
Lower marketing and selling expenses.
4.
Distributors perform necessary functions.
5.
Reduced collection problems.

Functions performed by independent wholesaler types

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

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

McDonalds and H&R Block
What vertical marketing system does each use?

CHANNEL CHOICE AND MANAGEMENT
FACTORS AFFECTING CHANNEL CHOICE
 Environmental Factors
 Consumer Factors
 Product Factors
 Company Factors

CHANNEL CHOICE AND MANAGEMENT
CHANNEL CHOICE CONSIDERATIONS
 Target Market Coverage
• Intensive Distribution
• Exclusive Distribution
• Selective Distribution

CHANNEL CHOICE AND MANAGEMENT
CHANNEL CHOICE CONSIDERATIONS
 Profitability
• Margins Earned
• Channel Costs
 Global Dimensions of
Marketing Channels

USING MARKETING DASHBOARDS
Channel Sales and Profit at
Charlesburg Furniture

CHANNEL CHOICE AND MANAGEMENT
CHANNEL RELATIONSHIPS
 Sources of Channel Conflict
• Vertical Conflict
• Disintermediation
• Horizontal Conflict

CHANNEL CHOICE AND MANAGEMENT
CHANNEL RELATIONSHIPS
 Legal Considerations
• Dual Distribution
• Vertical Integration
• Exclusive Dealing
• Tying Arrangements
• Refusal to Deal
• Resale Restrictions

The Clayton Act and Sherman Act place legal restrictions on specific marketing channel strategies and practices