Marketing Channels: Delivering Customer Value - Channel Behavior and Organization

19 important questions on Marketing Channels: Delivering Customer Value - Channel Behavior and Organization

When do channel conflicts arise?

When members cannot reach the same decision on common goals, objectives and rewards while giving up their company's objectives.

For more channel effectiveness, channel analysis and decision making should be more purposeful. What are the four steps in the marketing channel design?

1. Analyzing customer needs

2. Setting channel objectives

3. Identifying alternatives

4. Number of marketing intermediairs

Name the 2 types of conflicts that can arise?

1. Vertical
2. Horizontal
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In identifying alternatives, you must also consider value-added resellers. What's this?

Value-added resellers are independent distributors and dealers that develop computer systems and applications tailored to the special needs of small and medium-sized business customers.

While choosing the number of marketing intermediairs, we distinguish intensive, selective and exclusive distribution. What's the difference?

With intensive distribution you stock your product in as many outlets as possible.

With selective distribution you only stock your product in a few stores, but more stores than the exclusive outlet.

With exclusive distribution you stock your product only in a limited number of outlets.

What is vertical marketing system? (VMS)

All members act as a unified system where one channel member has control over the others as he might own or have contracts with them.

What is a corporate VMS?

It gathers different stages of production and distribution under a solitary leadership and the channel is commonly owned.

What is a contractual VMS?

This is made of independent firms who join together through contracts at different levels of production and distribution to obtain more economies of scale than they could reach alone.

What is the most common example of a contractual VMS?

The fanchise organization, where a channel member (the franchisor) connects different stages in the production-distribution process.

Name an example of a manufacturer-sponsored-retailer franchise system?

Ford and its independent dealers.

Name an example of a manufactured-sponsored wholesaler franchise system?

Coco-Cola and its licensed bottlers.

Name an example of a service-firm sponsored retailer franchise system?

Burger King and its franchise restaurants.

What is a administrated VMS?

It counts on the coordination from few dominant channels' members.

Name an example of a administrated VMS?

GE and its resellers.

What is a horizontal marketing system?

When two or more firms in the same level work together by combining financial, production, marketing resources in order to reach more customer segments than they would reach if they worked independently.

Name an example of a horizontal marketing system?

Microsoft's Bing and Yahoo.

What is a multichannel distribution?

A system where a single firm creates distribution channels to reach more customer segments.

What can a firm increase by multichanneling and why? (2)

1. Market coverage
2. As a result sales

As it tailors the needs of different customer segments.

What is a new trend concerning marketing channels?


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