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.

1. Selecting andManaging Marketing Channels AnasIftikhar 2815 Strategic Marketing Management

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.

4. Direct Channel

7. Industrial Distributor

10. Provide the Best Target Market Coverage

11. Best Satisfy the Target Market’sBuying Requirements

13. Target Market Coverage

14. Intensive Distribution

15. Exclusive Distribution

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

20. Satisfying Buyer Requirements

21. Lot Size

22. Variety

23. Convenience

24. Services Backup

25. Waiting time

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.

32. Horizontal and Vertical Conflict in Marketing Channels

33. Causes of Channel Conflict Goal Incompatibility Unclear Roles And Rights Differences In Perception Intermediaries’ Great Dependence

34. Managing Channel Conflict Adoption of superordinate goals Exchange persons between channel levels Cooptation Diplomacy, mediation, arbitration for chronic or acute conflict