Selecting and

1
Chapter 16
Selecting and Managing Marketing Channels
Marketing Management Tenth Edition Philip Kotler
2
Objectives

• Work Performed by Marketing Channels
• Channel-Design Decisions
• Channel-Management Decisions
• Channel Dynamics

3
How a Distributor Reduces theNumber of Channel
Transactions
Manufacturer
Customer
4
How a Distributor Reduces theNumber of Channel
Transactions
Distributor
Manufacturer
Customer
5
Distribution Channel Functions
Information
Transfer
Communication
Payments
Negotiation
Physical Distribution
Ordering
Risk Taking
Financing
6
Consumer Marketing Channels
7
Industrial Marketing Channels
8
Customers Desired Service Levels

• Lot size
• Waiting time
• Spatial convenience
• Product variety
• Service backup

9
Break-Even Cost Chart
10
Selecting
Channel Management Decisions
11
Corporate Common Ownership at Different Levels
of the Channel
Types of Vertical Marketing Systems
12
Conventional Distribution Channel vs. Vertical
Marketing Systems
Vertical marketing channel
Conventional marketing channel
Manufacturer
Manufacturer
Wholesaler
Retailer
13
Causes of Channel Conflict

• Incompatibility
• Difference in Perception
• Dependence

14
Legal Ethical Issues in Channel Relations

• Exclusive Dealing
• Exclusive Territories
• Tying Agreements
• Dealers Rights

15
Review

• Work Performed by Marketing Channels
• Channel-Design Decisions
• Channel-Management Decisions
• Channel Dynamics