© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-5

APPLE STORES: ADDINGHIGH-TOUCH TO HIGH-TECH

MARKETING CHANNELS

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-7

FIGURE 15-1 FIGURE 15-1 Terms used for marketing intermediaries

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-8

FIGURE 15-AFIGURE 15-A Structure of marketing channels

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-9

Functions Performed by Intermediaries

NATURE AND IMPORTANCE OF MARKETING CHANNELS

• Value Created by Intermediaries

• Transactional Function

• Logistical Function

• Facilitating Function

Consumer Benefits From Intermediaries

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-10

FIGURE 15-2 FIGURE 15-2 How intermediaries minimize transactions

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-11

FIGURE 15-3 FIGURE 15-3 Marketing channel functions performed by intermediaries

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-15

FIGURE 15-4 FIGURE 15-4 Common marketing channels for consumer goods and services

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-17

FIGURE 15-5 FIGURE 15-5 Common marketing channels for business goods and services

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-19

FIGURE 15-6 FIGURE 15-6 Representative consumer electronic marketing channels

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-20

MARKETING NEWSNET

Nestlé and General Mills—Cereal Partners Worldwide

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-25

FIGURE 15-8 FIGURE 15-8 Types of vertical marketing systems

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-34

FIGURE 15-BFIGURE 15-B Factors affecting channel choice and management

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-35

American Eagle Outfitters What new marketing channel opportunities

are created by the Internet?

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

MARKETING NEWSNET

Wrigley Markets a Controlled Substance in Singapore—Chewing Gum

Slide 15-36

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-37

CHANNEL CHOICE AND MANAGEMENT

Target Market Coverage

• Channel Design Considerations

• Intensive Distribution

• Exclusive Distribution

• Selective Distribution

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-38

CHANNEL CHOICE AND MANAGEMENT

Satisfying Buyer Requirements

• Channel Design Considerations

• Information

• Convenience

• Variety

• Attendant Services

Profitability

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-42

Schick Why the market share leader in Japan?

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-43

CHANNEL CHOICE AND MANAGEMENT

Conflict in Marketing Channels

• Channel Conflict

• Channel Relationships: Conflict, Cooperation, and Law

• Vertical Conflict

• Horizontal Conflict

Disintermediation

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-44

CHANNEL CHOICE AND MANAGEMENT

Cooperation in Marketing Channels

• Channel Captain

• Channel Relationships: Conflict, Cooperation, and Law

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-45

FIGURE 15-CFIGURE 15-C Sources of influence for a channel captain

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-46

ETHICS AND SOCIAL RESPONSIBILITY ALERT

The Ethics of Slotting Allowances

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-47

CHANNEL CHOICE AND MANAGEMENT

• Channel Relationships: Conflict, Cooperation, and Law

• Dual Distribution

Legal Considerations

• Vertical Integration

• Exclusive Dealing

• Tying Arrangements

• Refusal to Deal

• Resale Restrictions

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 15-48

FIGURE 15-9 FIGURE 15-9 Channel strategies and practices affected by legal restrictions