Selecting and Managing Marketing Channels. What are the reasons to establish a Marketing Channel. What are the types and causes of Channel Conflict and how it can be resolved.
2. 1. What is meant by a marketing channel? A: A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
17. 15 | 10 Intensity of Market Coverage (cont’d) Selective Distribution Using only some available outlets to distribute a product Shopping products and durable goods with low replacement rates High qualification requirements for intermediaries to distribute, sell, service, and support products Toyota’s Only Authorized Dealer
18. 15 | 11 Intensity of Market Coverage (cont’d) Exclusive Distribution Using a single outlet in a fairly large geographic area to distribute a product Expensive, high-quality products purchased infrequently Exclusive outlets provide an incentive to sellers in limited markets Dealers carry complete inventory and have trained staff for sales and service
27. How a Distributor Reduces theNumber of Channel Transactions 1 B. Number of contacts with a distributor M x C = 3 + 3 = 6 4 Store 2 5 6 3 = Distributor = Manufacturer = Customer
28. Wholesaler Retailer Consumer Consumer Conventional Distribution Channel vs. Vertical Marketing Systems Vertical marketing channel Conventional marketing channel Manufacturer Manufacturer Wholesaler Retailer
29. Channel Conflict What types of conflict arise in channels? What causes channel conflict? What can be done to resolve conflict situations?
30. What is Channel Conflict? In channel distribution, conflict is not negative, rather, some conflict actually strengthen and improves a channel. “Channel conflict arises when the behavior of a channel member is in opposition, to its channel counterpart. It is opponent centered and direct, in which the goal or object sought is controlled by the counterpart.” Coughlan, Anderson,
31. Types of Channel Conflict Vertical Channel Conflict - conflict between different levels within the same channel. Horizontal channel conflict - involves conflict between members at the same level within the channel. Multichannel conflict - exists when the manufacturer has established two or more channels that sell to the same market.