3. KEY OBJECTIVES OF
MARKETING CHANNELS
• DELIVER
NEEDED GOOD OR SERVICE
• PLACE THE GOOD/SERVICE WHERE IT IS
WANTED
• HAVE THE GOOD/SERVICE
WHEN IT IS WANTED
9-3
4. MARKETING CHANNEL DIFFICULTIES
• CHANNELS ARE
EXPENSIVE TO ESTABLISH
• CHANNELS ARE
COSTLY TO COORDINATE
• CHANNELS ARE
SLOW TO ADAPT TO ENVIRONMENTAL
CHANGES
9-4
5. WHAT DISTRIBUTORS DO
CONTRIBUTION CONTRIBUTION
TO MANUFACTURERS TO CUSTOMERS
MARKET COVERAGE PRODUCT AVAILABILITY
SALES CONTACTS PRODUCT ASSORTMENT
INVENTORY AVAILABILITY FITTING ORDER QUANTITY
ORDER PROCESSING CREDIT
MARKET INTELLIGENCE SERVICE
CUSTOMER SUPPORT TECHNICAL SUPPORT
9-5
6. HOW TO DESIGN A CHANNEL
Identify and
Identify and
forecast
forecast
user service
user service Create
Create
needs
needs aavision of
vision of
the ideal channel
the ideal channel
Gap
Gap
Evaluate
Evaluate Analysis
current channels Analysis
current channels
and other
and other Implement
Implement
options
options the best option
the best option
and manage
and manage
the system
the system
9-6
7. SOURCES OF CONFLICT IN
MARKETING CHANNELS
• GOAL CONFLICT
SALES GROWTH VS. PROFITS
• HOW THINGS GET DONE
WHO DOES WHAT & WHEN IS IT DONE
• CONFLICTING VIEWPOINTS
OUR VIEWPOINT VS. YOUR VIEWPOINT
9-7
8. HOW CHANNEL MEMBERS CAN
REACT TO CONFLICT
• EXIT—Can leave the relationship
• VOICE—Can find a means to articulate
dissatisfaction
• LOYALTY—Can continue to persevere in face of
conflict
• AGGRESSION—Can openly or covertly take actions
to injure the conflict party
• NEGLECT—Can leave the conflict untreated and
fade away 9-8
9. OPTIONS FOR RESOLVING CONFLICT
1. PRIVATE REFEREES—Panel of channel members
serve as a forum
2. THIRD PARTY SOLUTIONS—Mediated
resolution
3. EMPATHIC MECHANISMS
• Use of a specialist
• Join Partner’s Industry Association
• Exchange personnel
9-9
10. SOURCES OF CHANNEL POWER
1. REWARD POWER—Ability to provide days off
for specific outcome/behavior
2. COERCIVE POWER—Ability to punish for failure
to perform
3. INFORMATION POWER—Ability to obtain
information others do not have
4. EXPERT POWER—Ability to gain an advantage
by what you know
5. REFERENT POWER—Ability to influence by
serving as the model of best practices
9-10
