ING INTEGRATED MARKETING CHANNELS
C H A P T E R
After reading this chapter, students should:
Know what is a marketing channel system and a value network
Know what work marketing channels perform
Know how channels should be designed
Know what decisions companies face in managing their channels
Know how companies should integrate channels and manage channel conflict
Know what are the key issues with e-commerce
Most producers do not sell their goods directly to final users. Between producers and
final users stands one or more marketing channels, a host of marketing intermediaries
performing a variety of functions.
Marketing-channel decisions are among the most critical decisions facing management.
The company’s chosen channel(s) profoundly affect all other marketing decisions.
Companies use intermediaries when they lack the financial resources to carry out direct
marketing, when direct marketing is not feasible, and when they can earn more by doing
so. The most important functions performed by intermediaries are information,
promotion, negotiation, ordering, financing, risk taking, physical possession, payment,
Manufacturers have many alternatives for reaching a market. They can sell direct or use
one-, two-, or three-level channels. Deciding which type(s) of channel to use calls for
analyzing customer needs, establishing channel objectives, and identifying and evaluating
the major alternatives, including the types and numbers of intermediaries involved in the
Effective channel management calls for selecting intermediaries and training and
motivating them. The goal is to build a long-term partnership that will be profitable for
all channel members.
Marketing channels are characterized by continuous and sometimes dramatic change.
Three of the most important trends are the growth of vertical marketing systems,
horizontal marketing systems, and multichannel marketing systems.
All marketing channels have the potential for conflict and competition resulting from
such sources as goal incompatibility, poorly defined roles and rights, perceptual
differences, and interdependent relationships. Companies can manage conflict by striving
for superordinate goals, exchanging people among two or more channel levels, co-opting