Marketing Channels

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Anne T. Coughlan
Prentice Hall, Jan 1, 2001 - Business & Economics - 590 pages
This best-selling text has a new look and a new author helping to keep this classic at the leading edge of Channels research. Using examples taken from all over the world, this text shows students how to design, develop, and maintain effective relationships among channel members to achieve sustainable competitive advantage by using both strategic and managerial frames of reference. It emphasizes strategies for planning, organizing, and controlling the alliances among the institutions, agencies, and in-house units that bring products and services to market. The text focuses on the way in which marketing channels can provide customer service - both for the end-users they serve and the organizations that comprise them.

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Chapter 1:
In this chapter, the author defines the concept of marketing channel and explain why channels exist. How the channels works and activities performed inside a channel . the manufacturer and
intermediaries between it and the end user share the work of the channel , sometimes specializing in the performance of certain channel flows to which they are uniquely suited. This uses these building blocks concepts to develop an analytical framework for channel design , modification , and implementation .
The discussion in this chapter suggests these three variables for framework design, modification and implementation and these analytical elements are important in generating a well-designed and well-working marketing channel . none of these elements can be safely ignored. Ignoring the segmented nature of demand for service inputs leaves the channel manager with no guidelines for optimal channel design. In short although good channel performance is not the only necessary condition for a successful marketing strategy , poor channel performance guaranties less than optimal strategic outcomes for the product and its manufacturer.
Chapter 2& 3:
The concept of channel flows is critical to the channel manger ability to design and maintain the well-working channel . channel flows are the activities and processes in which marketing channel members engaged that both are costly and at the same time add value to the channel . the performance of channel flows results in the generation of service inputs and outputs for the end users in the market place.
With an understanding of the segment of the market that the channel will target , the channel manager can use an analysis of channel flows to evaluate the cost effectiveness of channel activities. We introduced the concept of the efficiency template to aid in this analysis . the efficiency template codifies information about the importance each channel flows in both cost and value terms , as well as about the proportion of each flow performed by each channel member. An efficiency template analysis can be done for a preexisting channel or can be the basis for the development of a new channel.
The efficiency template produces a nitric called the normative profit share for each channel member, a measure of the proportionate value added to the total channel performance by each channel member. If there are no intervening adverse competitive conditions , the normative profit shares should mirror at least approximately yhe actual share of total channel profit enjoyed by each channel member. This is the equity principle. In the short run , it is possible to diverge from the equity principle , particularly when one channel member is in a very competitive industry. Each though that channel member generates considerable value through its performance of necessary channel flows.
Chapter 4 & 5:
In these chapters the decision of how thoroughly to cover a market area is , for the manufacturer, a critical policy choice , for it has substantial on how well the manufacturer can implement the channel plans. This is because the intensity coverage drives how much reward power the manufacturer has downstream channel members and how much it depends on its downstream counterparts.
Channel members will be pressured by market forces to sell more if at least some of their competitors carry the brand. All these factors suggest that more coverage is better. The corporate lawyer , concerned about the incurring allegations of restricting competition , is likely to approve. On the manufacture side only the corporate accountant , adding up the costs of servicing many outlets placing small orders , is likely to object.
In short the manufacturer can increase its influence over channel members and its ability to motivate them by limiting coverage. In the process , the corporate accountant can appeased by the cost saving due to the serving a smaller but more active account base. The same argument applies in reverse to a downstream channel member.
A trend in both B2B & B2C is to create multiple


Ij An Analytic Framework for Channel Design
Service Outputs

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