MARKETING MANAGEMENT

12
th
edition
15
Designing and
Managing
Value Networks and
Channels
Kotler Keller
15-2
Chapter Questions
What is a marketing channel system and
value network?
What work do marketing channels perform?
How should channels be designed?
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?
15-3
Marketing Channels
Sets of interdependent organizations
involved in the process of making a
product or service available for use
or consumption.
15-4
Channels and
Marketing Decisions
Push
Strategy
Pull
Strategy
15-5
Categories of Buyers
Habitual shoppers
High value deal seekers
Variety-loving shoppers
High-involvement shoppers
15-6

15-7
Channel Member Functions
Gather information
Develop and disseminate persuasive
communications
Reach agreements on price and terms
Acquire funds to finance inventories
Assume risks
Provide for storage
Provide for buyers payment of their bills
Oversee actual transfer of ownership
15-8
Figure 15.2 Marketing Channel Flows
15-9
Figure 15.3
Consumer Marketing Channels
15-10
Figure 15.3 Industrial
Marketing Channels
15-11
Designing a Marketing Channel
System
Analyze customer needs

Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
15-12
Channel Service Outputs
Lot size
Waiting/delivery time
Spatial convenience
Product variety
Service backup
15-13
Identifying Channel Alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities
15-14
Number of Intermediaries
Exclusive
Selective
Intensive
15-15
Figure 15.4 The Value-Adds Versus
Costs of Different Channels
15-16
Channel-Management Decisions
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
15-17
Channel Power
Coercive
Reward
Legitimate
Expert
Referent
15-18
Channel Integration and Systems
Vertical marketing
systems
Corporate VMS
Administered VMS
Contractual VMS
Horizontal marketing
systems
Multichannel systems

15-19
Conflict Management

Vertical channel conflict
Horizontal channel conflict
Multi channel conflict
Causes of conflict
Goals incompatibility
Difference in perception

15-20
Managing Channel Conflict
Adoption of
superordinate goals
Cooptation
Diplomacy
Mediation
Arbitration
15-21
e-Commerce Marketing Practices

Pure-click
Brick-and-click
Brick-and-mortar
15-22
Marketing Debate
Does it matter where you are sold?

Take a position:
1. Channel images do not really affect
the brand images of the products they
they sell that much.
2. Channel images must be consistent with
the brand image.
15-23
Marketing Discussion
Think of your favorite retailers.
How have they integrated their
channel system? How would you
like their channels to be integrated?
Do you use multiple channels
from them? Why?