MKT
MKT 340 CH 10 Notes Marketing Channels: Delivering Customer Value

MKT 340 CH 10 Notes Marketing Channels: Delivering Customer Value

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Chapter 10 Marketing Channels: Delivering Customer Value Supply Chains and the Value Delivery Network Producing and making products available to buyers requires building relationships with upstream and downstream supply chain partners Upstream: Firms that supply the raw materials, components, parts, and other elements necessary to create a product or service Downstream: Marketing channel partners that link the firm to the customer Value Delivery Network Network composed of the company, suppliers, distributors, and ultimately customers who partner to help the entire system deliver better customer value Marketing Channels Set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business users Marketing channel decisions: Affect other marketing decisions, such as pricing or product design Can lead to competitive advantage Figure 10.1- How Adding a Distributor Reduces the Number of Channel Transactions How Channel Members Add Value The use of intermediaries results from their greater efficiency in making goods available to target markets Channel members can offer Contacts and experience Specialization Scale of operation Key Functions Performed by Channel Members Transaction Completion Transaction Fulfillment -information -physical distribution -promotion -financing -contact -risk taking -matching
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-negotiation Channel Level A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer Direct marketing channel A marketing channel that has no intermediary levels Indirect Marketing Channel A marketing channel containing one or more intermediary levels Figure 10.2- Customer and Business Marketing Channels Channel Behavior and Organization The channel will be most effective when: Each member is assigned tasks it can do best All members cooperate to attain overall channel goals The success of individual channel members depends on the overall channel’s success Horizontal conflict occurs among firms at the same level of the channel (e.g., between different dealers of the same brand) Vertical conflict occurs between different levels of the same channel (e.g., between a
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