Download Chapter 10

CHAPTER TEN
Place and
Development of
Channel Systems
For use only with
Perreault/Cannon/McCarthy
or Perreault/McCarthy texts.
© 2008 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
Marketing Strategy Planning Process
Marketing Strategy Planning for Place (Exhibit 10-1)
CH 10: Place and
Development of
Channel Systems
Place
objectives
Direct vs.
indirect
CH 11: Distribution
Customer Service &
Logistics
Channel
specialists
CH 12: Retailers,
Wholesalers & Their
Strategy Planning
Channel
relationships
Market
exposure
Place Decisions Are Guided by “Ideal” Place
Objectives
Product
Classes
Suggest
Objectives
Key
Issues
Decisions
Have
Long-run Effects
Place
System
Is Not
Automatic
Channel System May Be Direct or Indirect
Greater Control
Lower
Lower Cost
Cost
Internet Makes Direct
Distribution Easier
Some
Reasons
For Choosing
Direct Channels
Direct Contact with
Customer Needs
Quicker Response or
Change in Marketing Mix
Suitable Middlemen
Not Available
Channel Relationship Must Be Managed
Choosing the Type of
Relationship
Key
Issues In
Channel
Management
Whole-Channel ProductMarket Commitment
Conflict Handling
Role of Channel Captain
Producers or Middlemen May Be Channel Captains
(Exhibit 10-2)
Vertical Marketing Systems Focus on Final
Customers
Type of channel
Characteristics
Vertical marketing systems
Traditional
Administered
Contractual
Corporate
Little or
none
Some to
good
Fairly good
to good
Complete
Control maintained
by
None
Economic
power and
leadership
Contracts
One
company
ownership
Examples
Typical
“independents”
General
Electric
McDonald’s
Florsheim
Amount of
cooperation
The Best Channel System Should Achieve Ideal
Market Exposure
Intensive
Market
Exposure
Strategies
Selective
Selective
Exclusive
= number of
outlets
Channel Systems Can Be Complex (Exhibit 10-4)