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1、Chapter 5 Designing the Marketing Channel1Channel Design 6Objective 1:Decisions involving the development of new marketing channels either where none had previously existed or to the modification of existing channelsChannel Design:26Channel DesignA decision made by the marketerThe creation or modifi
2、cation of channelsThe active allocation of distribution tasks in an attempt to develop an efficient structureThe selection of channel membersA strategic tool for gaining a differential advantage Distinguishing points of the definition include: 36Who Engages in Channel Design?Objective 2: Producers,
3、manufacturers, serviceproviders, franchisors Look down the channeltoward the market Look up the channelto secure suppliers Look both up and down the channelFirmsWholesalersRetailers46Channel Design ParadigmRecognize the need forchannel design decision7. Selectchannel members5. Evaluaterelevant varia
4、bles6. Choose the “best”channel structure2. Set & coordinatedistribution objectives3. Specifydistribution tasks4. Develop alternative channel structuresObjective 3:56When to Make a ChannelDesign DecisionObjective 4:Developing a new product or product lineAiming an existing product at a new marketMak
5、ing a major change in some other component of the marketing mixEstablishing a new firmAdapting to changing intermediary policies that may inhibit attainment of distribution objectivesDealing with changes in availability of particular kinds of intermediariesOpening up new geographic marketing areasFa
6、cing the occurrence of major environmental changesMeeting the challenge of conflict or other behavioral problemsReviewing and evaluating66Distribution ObjectivesObjective 5:Setting distribution objectives requires knowledge of which, if any, existing objectives & strategies may impingeon these distr
7、ibution objectives.76The Need for CongruencyFirms overallobjectives&strategiesGeneralmarketingobjectives &strategiesPricingmarketingobjectives &strategiesProductmarketingobjectives &strategiesPromotionmarketingobjectives &strategiesDistributionmarketingobjectives &strategies8Distribution Tasks6Objec
8、tive 6:Outlining distribution tasks is specific and situationally dependent on the firm.For example: Distribution tasks for a manufacturer of consumer products differs from those for products soldin industrial markets.Distribution tasks are a function of the distribution objectives and the types of
9、firms involved.=96Channel Structure DimensionsObjective 7:1. Number of levels in the channel2. Intensity at the various levels3. Types ofintermediariesat each levelAllocation Alternatives106Number of LevelsRange from two to five or moreNumber of alternatives is limited to two or three choicesLimitat
10、ions result from the following factors:Particular industry practicesNature & size of the marketAvailability of intermediaries11Intensity at the Various Levels 6Intensive Selective ExclusiveMany Few OneIntensity DimensionNumbers of Intermediaries (retail level)Relationship between the intensity of di
11、stribution dimension & number of retail intermediaries used in agiven market area126Types of IntermediariesNumerous typesManagers emphasis on types of distribution tasks performed by these intermediariesWatch emerging typesElectronic online auction firms (eBay)Industrial products sold in B2B markets
12、 (Chemdex, C)136Variables Affecting Channel StructureObjective 8:Market VariablesProduct VariablesCompany VariablesIntermediary VariablesEnvironmental VariablesBehavioral VariablesCategories of Variables146Market GeographyLocation, geographical size, & distance from producerMarket SizeNumber of cust
13、omers in amarketMarket DensityNumber of buying units (consumers or industrial firms)per unit of land areaMarket BehaviorWho buys, & how, when, andwhere customers buyMarket Variables15Product Variables6Bulk & WeightPerishabilityUnit ValueDegree of StandardizationTechnical versus NontechnicalNewness16
14、Company Variables6SizeThe range of options isrelative to a firms sizeFinancialThe greater the capital, theCapacitylower the dependence onintermediariesManagerialIntermediaries are necessaryExpertisewhen managerial experienceis lackingObjectivesMarketing & objectives may& Strategieslimit use of inter
15、mediaries17Intermediary Variables6AvailabilityAvailability of intermediariesinfluences channel structure.CostCost is always a consideration inchannel structure.Services Services that intermediaries offer are closely related to the selection of channel members.186Environmental VariablesThe impact of
16、environmental forces isa common reason for making channel design decisions.EconomicSocioculturalCompetitiveTechnologicalLegal19Behavioral Variables6Develop congruent roles for channel members.Attend to the influence of behavioral problemsthat can distort communications.Be aware of available power ba
17、ses.20Heuristics in Channel Design6BenefitFairly simple prescriptions for channel structureLimitationMostly useful as rough guide to decision makingObjective 9:21Choosing an Optimal Channel StructureObjective 10:6Why is choosing an optimal channel structure not possible?Management is incapable of kn
18、owing allpossible alternatives.2.Precise methods for calculating the exact payoffs associated with each alternative structures do not exist.Techniques exist for developing more exact methods.BUT22Objective 11:Approaches for Choosing Channel Structure6“Characteristics of Goods & Parallel Systems” App
19、roachFinancial ApproachTransaction Cost Analysis ApproachManagement Science ApproachesJudgmental-Heuristic Approach23Aspinwalls “Characteristics of Goods and Parallel Systems” ApproachAll products can be described in terms of the five characteristics:Replacement rateGross marginAdjustmentTime of con
20、sumptionSearching time24Aspinwalls “Characteristics of Goods and Parallel Systems” ApproachColor classificationRedOrangeYellow Replacement rateGross marginAdjustmentTime of consumptionSearching timeHLLLLMMMMMLHHHH25Aspinwalls “Characteristics of Goods and Parallel Systems” ApproachLongMediumShortProductChannel26Financial ApproachInvestment decision of capital budgetingCover the cost of the capital invested in it and provide a better return than other alternatives (opportunity cost)Using rate of retu
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