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Global Channel
Management
c https://hbr.org/resources/images/article_assets/2015/09/SEPT15_07_990087-010.jpgManagement Internationaler Verkaufkanäle
A distribution channels moves goods and services
from producers to consumers
Channel
Functions
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
Channel
Functions
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer Channel
Functions
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer
3. Have contact with customers
Channel
Functions
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer
3. Have contact with customers
4. Match the offer with the need
Channel
Functions
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer
3. Have contact with customers
4. Match the offer with the need
Channel
Functions
5. Negotiate with buyers about price and offer
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer
3. Have contact with customers
4. Match the offer with the need
Channel
Functions
5. Negotiate with buyers about price and offer
6. Do the physical distribution
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer
3. Have contact with customers
4. Match the offer with the need
Channel
Functions
5. Negotiate with buyers about price and offer
6. Do the physical distribution
7. May finance the channel cost (Risk taking)
A distribution channels moves goods and services
from producers to consumers. Therefor they
1. Give information
2. Promote the offer
3. Have contact with customers
4. Match the offer with the need
5. Negotiate with buyers about price and offer
6. Do the physical distribution
7. May finance the channel cost (Risk taking)
BUT

when all are carried out by the manufacturer 

they increase the costs and prices!
Channel
Functions
Channel
Strategy
cFlow of demand 

stimulation
Channel
Strategy
PUSH
Flow of demand 

stimulation
Flow of
promotion
Channel
Strategy
PUSH
1 popular product and does not involve deep customization
Channel
Strategy
PUSH
1 popular product and does not involve deep customization
2 new product
Channel
Strategy
PUSH
1 popular product and does not involve deep customization
2 new product
3 use the reputation of the intermediaries
Channel
Strategy
PUSH
1 popular product and does not involve deep customization
2 new product
3 use the reputation of the intermediaries
4 temporary release in the market
Channel
Strategy
PUSH
1 the reseller can stop the contract
2 the reseller pursues his own interests
3 the reseller becomes to big for the ‘agent’
4 B2B sales strategy costs money
cFlow of demand 

stimulation
Channel
Strategy
Flow of demand 

stimulation
Flow of
promotion
PULL
Channel
Strategy
PULL
1 release services and products under the same brand
Channel
Strategy
PULL
1 release services and products under the same brand
2 exclusive or elite positioning
Channel
Strategy
PULL
1 expensive strategy
2 high dependent on the brand’s reputation
Distribution
Systems
Distribution
Systems
conventional
distribution
system
Conventional distribution systems consist of one or more
independent producers, wholesalers, and retailers.
Distribution
Systems
conventional
distribution
system
Conventional distribution systems consist of one or more
independent producers, wholesalers, and retailers.
1 Each seek to maximize its own profits
2 There is little control over the other members
3 No formal means of assigning roles and resolving conflicts.
Distribution
Systems
Hybrid
distribution
system
Multi-channel marketing systems are when a single firm 

sets up two or more marketing channels 

to reach one or more customers segments.
Distribution
Systems
Hybrid
distribution
system
Multi-channel marketing systems are when a single firm 

sets up two or more marketing channels 

to reach one or more customers segments.
Hybrid
distribution
system
Product Manufacturer
Webstore

Sales
Master Distributor
Resellers
Cover geographic &
Vertical Channels
OEM en VAR Partners
B2B & B2C
Customers
End Users,
Customers
OEM & VAR
Customers
Original Equipment
Manufacturers
Value Added
Resellers
Distribution
Systems
Channel
Levels
Number of intermediaries between the manufacturer 

and the end-user
Distribution
Systems
Channel
Levels
DIRECT
You sell directly to the end-user.
Distribution
Systems
Channel
Levels
INDIRECT
You sell through marketing intermediaries
to the end-user.
Distribution
Systems
Channel
Levels
INDIRECT
Consumer
market
ConsumerManufacturer
Manufacturer
Manufacturer
Manufacturer
Consumer
Consumer
Consumer
Retailer
Retailer
Retailer
Wholesaler
WholesalerAgent
Distribution
Systems
Channel
Levels
INDIRECT
Business
market
BusinessManufacturer
Manufacturer
Manufacturer
Manufacturer
Business
Business
Business
Wholesaler
WholesalerAgent
Agent
Distribution
Systems
Channel
Levels
INDIRECT
Service
market
Bus/ConService
Service Bus/ConAgent
Distribution
Systems
Channel
Advantage
Distribution
Systems
Channel
Levels
INDIRECT
In reality
Distribution
Systems
Channel
Levels
Pharma Industry
Distributionofgoods
Communicationflow
Distribution
Systems
Channel
Levels
Pharma Industry
Distributionofgoods
Communicationflow
Direct
Indirect
multi-
channel
PharmadceuticalCompanies
Physicians
Patients
Distribution
Systems
Channel
Levels
Pharma Industry
Distributionofgoods
Communicationflow
Direct
Indirect
multi-
channel
PharmadceuticalCompanies
Physicians
Patients
over the counter
Distribution
Systems
Channel
Levels
Pharma Industry
Distributionofgoods
Communicationflow
Direct
Indirect
multi-
channel
PharmadceuticalCompanies
Physicians
Patients
Intermediaries
Pharmacies
Hospitals
Care Institues
Pharmacies
Hospitals
Care Institues
Wholesaler
over the counter
Distribution
Systems
Channel
Levels
Pharma Industry
Distributionofgoods
Communicationflow
Direct
Indirect
multi-
channel
PharmadceuticalCompanies
Physicians
Patients
Intermediaries
Pharmacies
Hospitals
Care Institues
Pharmacies
Hospitals
Care Institues
Wholesaler
over the counter
Intermediaries
Distribution
Systems
Channel
Levels
INDIRECT
Intermediaries who bring buyers and sellers together
and assist in negotiating an exchange BUT 

do not take title of the goods.
Agents & Brokers
Distribution
Systems
Channel
Levels
INDIRECT
An intermediaries that sells products to 

other organizations such as retailers, manufacturers,…
Wholesaler
Distribution
Systems
Channel
Levels
INDIRECT
An intermediaries that sells products to 

other organizations such as retailers, manufacturers,…
Wholesaler
Operate on high volumes and low margins.
Distribution
Systems
Channel
Levels
INDIRECT
An independently owned organization that takes the title
of the merchandise they handle for full
Wholesaler
Merchant Wholesaler
Distribution
Systems
Channel
Levels
INDIRECT
Carry stock, maintain a sales force, offer credit, make
deliveries, provide business assistance, …
Wholesaler
Full Service Wholesaler
Distribution
Systems
Channel
Levels
INDIRECT
Range of services is limited.

Mostly Cash & Carry
Wholesaler
Limited Service Wholesaler
Distribution
Systems
Channel
Levels
INDIRECT
An organisation that sells the product to 

the final customer
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Have a narrow product or (single) brand line
Specialty Store
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Have a several product lines
Department Store
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Large stores, with high volumes, low margins, low costs
and self service.
Supermarket
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Small store mostly in residential areas with higher margin
Convenience Stores
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Mostly outlets (leftover sales, irregular product line)
Off-Price retail
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Very huge store with routine assortment of food products
and non-food products. Mostly very deep assortment in
one category.
Superstores
Retailer
Distribution
Systems
Channel
Levels
INDIRECT
Broad selection of high markup, fast moving brand name
goods sold by catalogue (sometimes with discount)
Catalogue
Retailer
WholesalerRetailer
operate in the main market
no issues about location
deal with businessmen
deal with specific group of products
large trading area
high volume, low margin
operate in the local market
location is important
deal with consumer
deal with more products
small trading area
low volume, low margin
Distribution
Systems
Channel
Levels
INDIRECT
International
market
ConsumerManufacturer
Manufacturer
Manufacturer
Manufacturer
Consumer
Consumer
Consumer
Retailer
Retailer
Retailer
Wholesaler
WholesalerAgent
Border
Distribution
Systems
Channel
Levels
INDIRECT
International
market
ConsumerManufacturer
Manufacturer
Manufacturer
Manufacturer
Consumer
Consumer
Consumer
Retailer
Retailer
Retailer
Wholesaler
WholesalerAgent
Border
ImporterExporter
Vertical
Marketing
System
Producers, wholesalers and retailers acting as a unified
system
Vertical
Marketing
System
Vertical
Marketing
System
Vertical
Marketing
System
Vertical
Marketing
System
The own the
product
Vertical
Marketing
System
The own/make
the product
The own the
retailer
Vertical
Marketing
System
Vertical
Marketing
System
c
Vertical
Marketing
System
c
Vertical
Marketing
System
Corporate VMS integrates successive stages of production
and distribution under single ownership.
Vertical
Marketing
System
Contractual VMS consists of independent firms at
different levels of production and distribution who join
together through contracts to obtain more economies of
sales impact the each could achieve alone.
Vertical
Marketing
System
Contractual VMS consists of independent firms at
different levels of production and distribution who join
together through contracts to obtain more economies of
sales impact the each could achieve alone.
Vertical
Marketing
System
Contractual VMS consists of independent firms at
different levels of production and distribution who join
together through contracts to obtain more economies of
sales impact the each could achieve alone.
• Wholesalers sponsored
voluntary chains
• Retailer cooperatives
• Franchise organisations
Vertical
Marketing
System
Contractual VMS consists of independent firms at
different levels of production and distribution who join
together through contracts to obtain more economies of
sales impact the each could achieve alone.
Franchise
Vertical
Marketing
System
Business format franchise not only distributes the
franchisor’s products and services under the franchisor’s
trademark, but also implements the franchisor’s format and
business procedure.
Franchise
Contractual VMS
Vertical
Marketing
System
In Product distribution franchise the franchisee merely
sells the franchisor’s products or services.
Franchise
Contractual VMS
Vertical
Marketing
System
The management franchise provides the management
expertise, format and/or procedure for conducting the
business.
Franchise
Contractual VMS
Vertical
Marketing
System
Administrative VMS has a few dominant channel
members without common ownership. Leadership comes
from size and power.
©
Administrative VMS has a few dominant channel
members without common ownership. Leadership comes
from size and power.
Vertical
Marketing
System
Horizontal
Marketing
System
Horizontaal Marketing Systems are when two or more
companies at one level join together to follow a new
marketing opportunity. Companies combine financial,
production, or marketing resources to accomplish more
than any company could alone.
Horizontal
Marketing
System
Horizontaal Marketing Systems are when two or more
companies at one level join together to follow a new
marketing opportunity. Companies combine financial,
production, or marketing resources to accomplish more
than any company could alone.
Horizontal
Marketing
System
Horizontaal Marketing Systems are when two or more
companies at one level join together to follow a new
marketing opportunity. Companies combine financial,
production, or marketing resources to accomplish more
than any company could alone.
Horizontal
Marketing
System
Vertical
Marketing
System
Channel
Conflict
Occurs when one channel member believes another channel
member is engaged in behavior that is preventing them from
achieving their goals.
Channel
Conflict
Occurs when one channel member believes another channel
member is engaged in behavior that is preventing them from
achieving their goals.
1 channel members bypass another to buy and sell direct
Channel
Conflict
Occurs when one channel member believes another channel
member is engaged in behavior that is preventing them from
achieving their goals.
1 channel members bypass another to buy and sell direct
2 profit margins are uneven between channel members
Occurs when one channel member believes another channel
member is engaged in behavior that is preventing them from
achieving their goals.
1 channel members bypass another to buy and sell direct
2 profit margins are uneven between channel members
3 manufacturers believes channel member is not providing
attention to its products
Channel
Conflict
Occurs when one channel member believes another channel
member is engaged in behavior that is preventing them from
achieving their goals.
1 channel members bypass another to buy and sell direct
2 profit margins are uneven between channel members
3 manufacturers believes channel member is not providing
attention to its products
Channel
Conflict
4 manufacturer engage in dual distribution
Channel
Conflict
Horizontal
Conflict
Channel
Conflict
Horizontal
Conflict
Vertical
Conflict
Channel
Alternatives
Channel
Alternatives
Exclusive
Distribution
Highly selective choice of retailers - one per market
Producers wants a close watch and control
Channel
Alternatives
Intensive
Distribution
As much retailers as possible
Preferably for consumer (FMCG) and pharmaceutical 

products and automotive spares.
Channel
Alternatives
Selective
Distribution
Retailers will be selected in line with the company/brand
image
Preferred for his value products
Keep distribution cost low(er)
Channel
Decisions
Product
Life
Cycle
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Limited Retailers
Exclusive
distribution
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Limited Retailers
Exclusive
distribution
More Retailers
Multiple
distribution
Representation
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Limited Retailers
Exclusive
distribution
More Retailers
Multiple
distribution
Representation
Max. Retailers

Key Account
Management
Local sales
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Limited Retailers
Exclusive
distribution
More Retailers
Multiple
distribution
Representation
Max. Retailers

Key Account
Management
Local sales
Fewer Retailers

Global Acc. Man.
Full local org.
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Limited Retailers
Exclusive
distribution
More Retailers
Multiple
distribution
Representation
Max. Retailers

Key Account
Management
Local sales
Fewer Retailers

Global Acc. Man.
Full local org.
Set up direct sales
channels
Product
Life
Cycle
Introduction Growth Maturity/Saturation Decline
Marginal Revenue
Revenue
Cost
Profit
Limited Retailers
Exclusive
distribution
More Retailers
Multiple
distribution
Representation
Max. Retailers

Key Account
Management
Local sales
Fewer Retailers

Global Acc. Man.
Full local org.
Set up direct sales
channels
Set up E-commerce
Channel
Design
designing international distribution channels
Channel
Design
Channel design are all decisions involving the
development of new marketing channels where none
has existed before, or the modification of existing
channels.
Channel
Design
The channel design should contribute to the firm’s quest for
differential advantage.
Channel
Design
Differential advantage = 

Unique benefits or characteristics of a firm, product, or
program that set it apart and above its competitors in the
customers' viewpoint.
The channel design should contribute to the firm’s quest for
differential advantage.
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Channel
Design
Analyzing
customer
needs
Channel
Design
Analyzing
customer
needs
Lot Size
Variety
Place
Utility
Waiting
Time
Channel
Design
Analyzing
customer
needs
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Know your customer segments.
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Know your customer segments.
What’s the targeted level of customer service?
After
sales
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Know your customer segments.
What’s the targeted level of customer service?
What are the best channels to use?
After
sales
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Know your customer segments.
What’s the targeted level of customer service?
What are the best channels to use?
Cost-efficient way to meet customer requirements
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Types of intermediaries.
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Types of intermediaries.
NNumber of intermediaries
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Types of intermediaries.
NNumber of intermediaries
Responsibility of each channel member
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Segmentation
Putting customers in similar
clusters based on their need
Channel
Design
Segmentation
Positioning
Putting customers in similar
clusters based on their need
Fix what level of service
is required
Channel
Design
Segmentation
Positioning
Focus
Putting customers in similar
clusters based on their need
Fix what level of service
is required
The sky is not the
limit! Choose!
Channel
Design
Segmentation
Positioning
Focus
Development
Putting customers in similar
clusters based on their need
Fix what level of service
is required
The sky is not the
limit! Choose!
Channel
Design
Channel
Design
MOTIVATION
cCoercion - punishmentReward - incentives
Coercion - punishment
Referent - strong image
cCoercion - punishmentLegitimate - contract
cCoercion - punishmentExpert - knowledge
cCoercion - punishmentSupport - extra benefits
cCoercion - punishmentCompetition
Channel
Design
MOTIVATION
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Cost of operation
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Cost of operation
NAbility to manage & control
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Cost of operation
NAbility to manage & control
Adaptability
Channel
Design
Analyzing
customer
needs
Setting
Channel
Objectives
Identifying
channel
alternatives
Evaluation
Cost of operation
NAbility to manage & control
Adaptability
Range & volume to be handled
selecting
channel
members
managing
channel
members
motivating
channel
members
evaluating
channel
members
Channel
Design
FAIL
Ignoring end user buying patterns
Assuming that your direct sales force will assist the indirect
channels
Expecting channels to change for you
Sticking to traditional partners/channels
Being casual about selecting & evaluating
channel members
Hoping that one channel can sell to every customer
FAIL
Avoiding a channel conflict instead of managing it
4C’s
Competition
Consumer
Channel
Collaboration
Let’s go to
workSouth Africa
Malaysia
Australia
Argentina
South Korea
MexicoPeru
Let’s go to
work
What is Vaude all about? (Mission/Vision/Strategy)

What are they selling?
Who is your customer in the target countries?

Why are these targeted countries for Vaude?
Compose the customer journey of a Valued Customer.
Develop a marketing channel strategy for Vaude 

to introduce Vaude in your target country.
Let’s go to
work
Think about the 4 steps!
Be aware of channel potential conflicts!
…there is more to add after next class!
Let’s go to
work
Your end-product
One-Page Strategy (+ appendix)
5m presentation (Management Summary)
My Evaluation
Not the what, but the how is important
You evaluate on other introduction - max 1p!
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Global Channel
Management
c https://hbr.org/resources/images/article_assets/2015/09/SEPT15_07_990087-010.jpgManagement Internationaler Verkaufkanäle

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