Marketing Management A South Asian Perspective

Chapter 14: Designing and Managing Integrated Marketing Channels

How should channels be designed?

To design a marketing channel system, marketers analyze customer needs and wants, establish channel objectives and constraints, and identify and evaluate major channel alternatives

Channels produce

Channels produce five service outputs:

Lot size

Waiting and delivery

time

Spatial convenience

Product variety Service

backup

Establishing objectives and constraints

•Planners can identify several market segments based on desired service and choose the best channels for each.

•Channel objectives vary with product characteristics.

•Marketers must adapt their channel objectives to the larger environment.

•In entering new markets, firms should closely observe what other firms are doing.

Identifying Major Channel Alternatives

Each channel has unique strengths and weaknesses.

Channel alternatives differ in three ways:•Types of intermediaries•Number of intermediaries*•Terms and responsibilities of channel members*

There are three strategies based on number of intermediaries

Exclusive distribution

Selective distribution

Intensive distribution

Terms and responsibility of channel members

Main elements of “trade-relations mix” are :

•Price policy•Conditions of sale•Distributors’ territorial rights•Mutual services and responsibility

Evaluating Major Channel Alternatives

Each channel alternative will produce a different level of sales and costs. Firms would have to evaluate the costs and benefits and then arrive at a decision.

thank you

Priti VermaLSR