Marketing Management A South Asian Perspective

Chapter 14: Designing and Managing Integrated Marketing Channels

What decisions do companies face in

managing their channels

Channel-Management Decisions

1. Selecting channel members

To customers, the channel is the company.

To facilitate selection, producers should determine what characteristics distinguish the better intermediaries.

2. Training & motivating channel members

• Channel power*• Channel partnership*

A company needs to view its intermediaries the same way it views its end users.

It should determine their needs and wants and tailor its channel offering to provide them with

superior value.

Channel Power

Ability to alter channel members’ behavior so they take actions that they would not have taken otherwise.

Coercive power manufacturer threatens to terminate relationship if intermediaries fail to cooperate.

Power

Legitimate Power:Manufacturer requests behavior that is warranted under contract.

Expert Power

Manufacturer has special knowledge the intermediaries value

Referent powerManufacturer is so highly respected that intermediaries are proud to be

associated with it.

Channel Partnerships

Companies try to forge long term partnerships with distributors

3. Evaluating Channel Members

4. Modifying Channel Design and Arrangements

Optimal channel structure will change over time

5. Channel modification decisions

Adding/ dropping individual members requires an incremental analysis.

6. Global Channel Considerations

International markets pose challenges and opportunities at the same time

thank you

Priti VermaLSR