Marketing Management A South Asian Perspective

Chapter 14: Designing and Managing Integrated Marketing Channels

What is a marketing channel system and

value network ?

Marketing Channels

Marketing Channels

Most producers do not sell their goods directly to the final users ; between them stands a set of intermediaries performing a variety of functions. These

intermediaries constitute a marketing channel.

Formally, marketing channels are sets of interdependent organizations participating in the process of making a product or a service available for use or consumption

Intermediaries • Merchants

(wholesalers &

retailers)• Agents(sales agents,

brokers)• Facilitators

(advertising agencies,

transportation

companies)

Importance of marketing channels

A marketing channel system is a particular set of marketing channels a firm employs, and decisions about it are among the most critical ones management faces.

Marketing channels must not just serve markets, but also make markets.

Channel chosen affects all other marketing decisions.

In managing intermediaries, the firm must decide how much effort to devote to push versus pull marketing.

PUSH PULL

uses means to induce

intermediaries to carry, promote

an sell the product

Appropriate when • Low brand loyalty• Brand choice is

made in store• Product benefits

are well understood

Manufacturer uses forms of

communication to persuade

consumers to buy product from

intermediaries.

Appropriate when• High brand

loyalty• Consumers can

differentiate products

• Choose brand before they go to

the store

a combination of both the strategies is the most effective in activating consumer demand.

Hybrid Channels and Multichannel Marketing

Occurs when a single firm uses two or more marketing channels to reach customer segments.

Each channels targets a different segment of buyers and delivers the rights products in the right places in the right way at the least cost.

Who does this?

Value network is a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings

It includes a firm’s suppliers and its suppliers’ suppliers and its immediate customers and their end customers.

thank you

Priti VermaLSR

These slides were created by Priti Verma, LSR, Delhi University, during a Marketing Internship by Prof. Sameer Mathur, IIM Lucknow (see

www.IIMInternship.com)