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Chapter 12 Marketing Channels: Delivering Customer Value
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Page 1: Chapter 12 Marketing Channels: Delivering Customer Value.

Chapter 12

Marketing Channels: Delivering Customer Value

Page 2: Chapter 12 Marketing Channels: Delivering Customer Value.

Topics to Cover

• Channel Design Decisions• Channel Management Decisions• Public Policy and Distribution Decisions• Marketing Logistics and Supply Chain

Management

Page 3: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design Decisions

Marketing Channel Design• Designing effective marketing channels by

analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating them.

• For maximum effectiveness, channel analysis and decision making should be more purposeful.

Page 4: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design Decisions

Analyzing consumer needs

Setting channel objectives

Identifying major channel

alternativesEvaluation

Page 5: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design Decisions

• Designing marketing channels starts with finding out what target consumer wants from the channel.

• The faster the delivery, the greater the assortment provided, and the more the add-on services supplied, the greater the channel’s service level.

Analyzing Consumer Needs

Page 6: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design Decisions

• Targeted levels of customer service• What segments to serve• Best channels to use• Minimizing the cost of meeting customer

service requirements

Setting Channel Objectives

Page 7: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design Decisions

• Types of intermediaries• Number of marketing intermediaries• Responsibilities of channel members

Identifying Major Alternatives

Page 8: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design DecisionsIdentifying Major Alternatives

Intensive distribution• Candy and toothpaste

Exclusive distribution• Luxury automobiles and prestige clothing

Selective distribution• Television and home appliance

Page 9: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design DecisionsEvaluating the Major Alternatives

Each alternative should be evaluated against:– Economic criteria–Control–Adaptive criteria

Page 10: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Design DecisionsDesigning International Distribution Channels

• Channel systems can vary from country to country

• Must be able to adapt channel strategies to the existing structures within each country

Page 11: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Management Decisions

Selecting channel

members

Managing channel

members

Motivating channel

members

Evaluating channel

members

Page 12: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Management DecisionsSelecting Channel Members

• Producers vary in their ability to attract qualified marketing intermediaries.

• When selecting intermediaries, the company should determine what characteristics distinguish the better ones.

Page 13: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Management DecisionsManaging and Motivating Channel Members

• Once selected, channel members must be continuously managed and motivated to do their best.

• The company must sell not only through intermediaries but to and with them.

• Most companies see their intermediaries as first-line customers and partners.

Page 14: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Management DecisionsManaging and Motivating Channel Members

• In managing the channels, a company must convince the distributors that they can succeed better by working together as a cohesive system.

• Many companies are now installing high-tech partner relationship management systems to coordinate their whole-channel marketing efforts.

Page 15: Chapter 12 Marketing Channels: Delivering Customer Value.

Channel Management DecisionsEvaluating Channel Members

• The producer must check the channel members performance against standards such as sales quotas, average inventory level, customer delivery time, treatment of damaged and lost goods, cooperation in company promotions and training programs, and services to customers.

• Company should recognize and reward intermediaries who are performing well and adding good value for customers.

Page 16: Chapter 12 Marketing Channels: Delivering Customer Value.

Public Policy & Distribution Decisions

• Exclusive distribution is when the seller allows only certain outlets to carry its products

• Exclusive dealing is when the seller requires that the sellers not handle competitor’s products

Page 17: Chapter 12 Marketing Channels: Delivering Customer Value.

• Exclusive territorial agreements are where producer or seller limit territory

• Tying agreements are agreements where the dealer must take most or all of the line

Public Policy & Distribution Decisions

Page 18: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Marketing logistics (physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit

Nature and Importance of Marketing Logistics

Page 19: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Nature and Importance of Marketing Logistics

Page 20: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Nature and Importance of Marketing Logistics

Supply chain management is the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers

Page 21: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Major Logistics Functions

Warehousing Inventory management

TransportationLogistics

information management

Page 22: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Major Logistics Functions

• Warehousing Decisions include– How many– What types– Location– Distribution centers

Page 23: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Major Logistics Functions

• Inventory Management – Just-in-time systems–RFID• Knowing exact product location

– Smart shelves• Placing orders automatically

Page 24: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Major Logistics Functions

Transportation affects the pricing of products, delivery performance, and condition of the goods when they arrive

Truck Rail Water

Air Internet

Page 25: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Logistics Information Management

Logistics information management is the management of the flow of information, including customer orders, billing, inventory levels, and customer data

• EDI (electronic data interchange)• VMI (vendor-managed inventory)

Page 26: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Integrated Logistics Management

Integrated logistics management is the recognition that providing customer service and trimming distribution costs requires teamwork internally and externally

Page 27: Chapter 12 Marketing Channels: Delivering Customer Value.

Marketing Logistics and Supply Chain Management

Integrated Logistics Management

Third-party logistics is the outsourcing of logistics functions to third-party logistics providers (3PLs)

Page 28: Chapter 12 Marketing Channels: Delivering Customer Value.

This Powerpoint Presentation was adopted from Pearson Education Inc. (Prentice Hall) for the Text Book of this course: Principles of Marketing 13th Edition by Phillip Kotler and Gary Armstrong.

Necessary changes are being made as per the recording needs of this lecture and

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