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?
15-1

Marketing Channels
Sets of interdependent organizations involved in the process of making a product or service available for use or consumption.
15-2

Examples of Channels
• Dell (DTC)
• Avon
• Canada Post
• Grainger (auto parts network)
• Coca-cola (bottlers)
• McDonald’s restaurants (franchisee)
15-3

Increasing Efficiency
15-4

Consumer Marketing Channels
15-5

Wholesaling Functions
• Selling and promoting
• Buying and assortment building
• Bulk breaking
• Warehousing
• Transportation
• Financing
• Risk bearing
• Market information
• Management services and counseling
16-6

Identifying Channel Alternatives
Types of intermediaries
Number of intermediaries
Terms and responsibilities
15-7

Channel Service Outputs
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Service backup
15-8

Major Wholesaler Types
Merchant
Full-service
Limited-service
Brokers and agents
Manufacturers
Specialized
16-9

Wholesalers’ Marketing Decisions
Target market
Product assortment
Price
Promotion
Place
16-10

Number of Intermediaries
Exclusive
Selective
Intensive
15-11

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
16-12

Transportation Factors
• Speed
• Frequency
• Dependability
• Capability
• Availability
• Traceability
• Cost
16-13

Retailing
Includes all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use.
16-14

Retail Positioning Map
16-15

Department Store Model:
Strong Retail Brand Approach
16-16

Department Store Model:
The Showcase Store
16-17

Location Decision
• General business districts
• Regional shopping centers
• Community shopping centers
• Strip malls
• Location within a larger store
16-18

Indicators of Sales Effectiveness
Number of people passing by
% who enter store
% of those who buy
Average amount spent per sale
16-19

e-Commerce Marketing Practices
• Pure-click
• Brick-andclick
• Brick-andmortar
15-20

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
15-21