Marketing Channels PDF

Marketing Channels Mehnaaz Samantha Kamal North South University October 2024  Value delivery network: A network composed of the company, suppliers, distributors and ultimately, customers who partner with each other to improve the performance of the entire system in delivering cu...

Marketing Channels Mehnaaz Samantha Kamal North South University October 2024  Value delivery network: A network composed of the company, suppliers, distributors and ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value.  What is a Distribution Channel? A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user. Distribution Channel Functions  Channel level A layer of intermediaries that perform some work in bringing the product and it’s ownership closer to the buyer.  Horizontal Marketing System  The channel development in which two or more companies at one level join together to follow a new marketing opportunity.  Objective: to combine financial, production or marketing resources to accomplish more than any one company could alone.  Eg: Walmart partnering with McDonald’s to place ”express” versions of McDonald’s restaurants in Walmart stores. Vertical marketing system  Consists of producers, wholesales, and retailers acting as a unified system.  One channel member owns the others, has contracts with them, or wields so much power that they must all cooperate. The channel will be most effective when: Each member is assigned tasks it can do best. All members cooperate to attain overall channel goals and satisfy the target market. When this doesn't happen, conflict occurs: Horizontal conflict occurs among firm at the same level of the channel. Vertical conflict occurs between different levels of the same channel. For the channel to perform well, conflict must be managed. Types of vertical marketing system Channel design decisions Logistic system Transportation Modes  Checklist for choosing transportation  speed  dependability  capability  availability  cost