MARKETING MANAGEMENT

14 th edition

15 Designing and Managing Integrated Marketing Channels

Kotler Keller

How a Marketing Intermediary Reduces the Number of Channel Transactions CHPT: 15&16-2

Distribution Channel Functions These Functions Should be Assigned to the Channel Member Who Can Perform Them Most Efficiently and Effectively to Provide Satisfactory Assortments of Goods and Services to Target Customers.

Risk Taking Information Financing Promotion Physical Distribution Contact Negotiation Matching CHPT: 15&16-3

Number of Channel Levels

Channel Level - Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer.

Channel 1 M Channel 2 M Channel 3 M Channel 4 M W W Direct Channel Indirect Channel R J R R C C C C CHPT: 15&16-4

Channel Behavior & Conflict

• 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 firms at the same level of the channel, i.e retailer to retailer.

– Vertical Conflict occurs between different levels of the same channel, i.e. wholesaler to retailer.

• For the channel to perform well, each channel member’s role must be specified and conflict must be managed.

CHPT: 15&16-5

Conventional Marketing Channel vs. Vertical Marketing System

Conventional Marketing Channel Vertical Marketing System Manufacturer Manufacturer Wholesaler Retailer Consumer Retailer Consumer CHPT: 15&16-6

Types of Vertical Marketing Systems

Degree of Direct Control Corporate Common Ownership at Different Levels of the Channel i.e. Sears Contractual Contractual Agreements Among Channel Members Administered Leadership is Assumed by One or a Few Dominant Members i.e. Kraft CHPT: 15&16-7

Types of Vertical Marketing Systems

Vertical Marketing Systems (VMS) Corporate VMS Contractual VMS Administered VMS Wholesaler Sponsored Voluntary Chain Retailer Cooperatives Manufacturer Sponsored Retailer Franchise System Manufacturer Sponsored Wholesaler Franchise System Franchise Organizations Service-Firm Sponsored Franchise System CHPT: 15&16-8

Channel Design Decisions

Analyzing Consumer Service Needs Setting Channel Objectives & Constraints Identifying Major Alternatives Intensive Distribution Selective Distribution Exclusive Distribution Evaluating the Major Alternatives Designing International Distribution Channels CHPT: 15&16-9

MARKETING MANAGEMENT

14 th edition

16 Managing Retailing and Wholesaling

Kotler Keller

What is Retailing?

Includes all the activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use.

CHPT: 15&16-11

Retailing

• Retailing can be done in stores (store retailing) or out of a store (nonstore retailing) such as: – Direct mail, – Catalogs, – Telephone, – Home shopping shows, – Internet.

CHPT: 15&16-12

Classification of Retailing

Amount of Service Self-Service, Limited-Service and Full-Service Retailer Product Line Length and Breadth of the Product Assortment Relative Prices Pricing Structure that is Used by the Retailer Retail Organizations Independent, Corporate, or Contractual Ownership Organization CHPT: 15&16-13

Classification of Retailing: Amount of Service

Self-Service Retailer Limited-Service Retailers Provide Few or No Services to Shoppers i.e. Migros Provide Only a Limited Full-Service Number of Services to Shoppers i.e. Çarşı Retailers Retailers that Provide a Full Range of Services to Shoppers i.e. Arçelik

CHPT: 15&16-14

Classification of Retailing: Product Line

Store Specialty Stores Department Stores Supermarkets Convenience Stores Superstores Discount Stores Off-Price Retailers Warehouse Clubs Description Narrow Product Line, Deep Assortment i.e. Deriden, Timberland Wide Variety of Product Lines i.e. Clothing, Yeni Karamürsel, Çarşı Wide Variety of Food, Laundry, & Household Products i.e. Canerler Limited Line of High-Turnover Convenience Goods i.e. Büfeler, bakkallar Large Assortment of Routinely Purchased Food & Nonfood Products i.e. Real, Migros Standard Merchandise at Lower Prices i.e. Ulus, Kızılay mağazaları Changing Collection of Higher-Quality Goods at a Reduced Price i.e. Outlet Limited Selection of Brand-Name Grocery Items, Appliances, Etc. i.e. Metro CHPT: 15&16-15

Classification of Retailing: Retail Organization

Membership Group (Fabrika, Çarşı, Network. Beymen) Franchise (North Shield) Independent Retailers Corporate Chain (TGI) Leased (Tepe Home) CHPT: 15&16-16