Marketing Management Arab World Edition Kotler Keller Hassan
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![Marketing Management Arab World Edition Kotler, Keller, Hassan, Baalbaki and Shamma Chapter 15 Designing Marketing Management Arab World Edition Kotler, Keller, Hassan, Baalbaki and Shamma Chapter 15 Designing](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-2.jpg)
Marketing Management Arab World Edition Kotler, Keller, Hassan, Baalbaki and Shamma Chapter 15 Designing and Managing Integrated Marketing channels
![Chapter Questions 1. What is a marketing channel system and value network? 2. What Chapter Questions 1. What is a marketing channel system and value network? 2. What](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-3.jpg)
Chapter Questions 1. What is a marketing channel system and value network? 2. What work do marketing channels perform? 3. How should channels be designed? 4. What decisions do companies face in managing their channels? 5. How should companies integrate channels and manage channel conflict? 6. What are the key issues with e-commerce? Copyright © 2012 Pearson Education 15 -2
![Marketing Channels and Value Networks • Chapter Question 1: What is a marketing channel Marketing Channels and Value Networks • Chapter Question 1: What is a marketing channel](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-4.jpg)
Marketing Channels and Value Networks • Chapter Question 1: What is a marketing channel system and value network? A marketing channel is the set of interdependent organizations involved in the process of making a product or service available for use or consumption. • A marketing channel system is the particular set of marketing channels employed by a firm. Copyright © 2012 Pearson Education 15 -3
![The Importance of Channels Chapter Question 1: What is a marketing channel system and The Importance of Channels Chapter Question 1: What is a marketing channel system and](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-5.jpg)
The Importance of Channels Chapter Question 1: What is a marketing channel system and value network? Companies must decide how much effort to devote to push versus pull marketing: • A push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users. • A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries. Copyright © 2012 Pearson Education 15 -4
![Chapter Question 1: What is a marketing channel system and value network? Channels Hybrid Chapter Question 1: What is a marketing channel system and value network? Channels Hybrid](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-6.jpg)
Chapter Question 1: What is a marketing channel system and value network? Channels Hybrid channels - use of multiple channels of distribution to reach customers in a defined market. Within hybrid channels, customers expect channel integration, with features such as: • The ability to order a product online and pick it up at a convenient retail location. • The ability to return an online-ordered product to a nearby store of the retailer. • The right to receive discounts and promotional offers based on total online and offline purchases. Copyright © 2012 Pearson Education 15 -5
![Understanding Customer Needs Chapter Question 1: What is a marketing channel system and value Understanding Customer Needs Chapter Question 1: What is a marketing channel system and value](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-7.jpg)
Understanding Customer Needs Chapter Question 1: What is a marketing channel system and value network? When choosing channels, marketers must be aware that different consumers have different needs. Buyers fall into one of four categories: • Habitual shoppers (Same place – Same manner) • High value deal seekers (need – lowest price) • Variety-loving shoppers (Info – High tech – priceless) • High-involvement shoppers (Info – low cost chanl-support) Copyright © 2012 Pearson Education 15 -6
![Understanding Customer Needs Chapter Question 1: What is a marketing channel system and value Understanding Customer Needs Chapter Question 1: What is a marketing channel system and value](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-8.jpg)
Understanding Customer Needs Chapter Question 1: What is a marketing channel system and value network? As Figure 15. 1 shows, customer profiles for these types of retailers differed across three markets studied: Fig. 15. 1: What Do European Customers Value? Copyright © 2012 Pearson Education 15 -7
![The Role of Marketing Channels Chapter Question 2: What work do marketing channels perform? The Role of Marketing Channels Chapter Question 2: What work do marketing channels perform?](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-9.jpg)
The Role of Marketing Channels Chapter Question 2: What work do marketing channels perform? Channel Functions and Flows Members of the marketing channel perform a number of key functions: Box 15. 1: Channel Member Functions Copyright © 2012 Pearson Education 15 -8
![Channel Functions and Flows Chapter Question 2: What work do marketing channels perform? Five Channel Functions and Flows Chapter Question 2: What work do marketing channels perform? Five](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-10.jpg)
Channel Functions and Flows Chapter Question 2: What work do marketing channels perform? Five flows are illustrated in Figure 15. 2: Fig. 15. 2: Five Marketing Flows in the Marketing Channel for Forklift Trucks Copyright © 2012 Pearson Education 15 -9
![Chapter Question 2: What work do marketing channels perform? Channel Levels The producer and Chapter Question 2: What work do marketing channels perform? Channel Levels The producer and](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-11.jpg)
Chapter Question 2: What work do marketing channels perform? Channel Levels The producer and the final customer are part of every channel. The number of intermediary levels determines the length of a channel. Fig. 15. 3: Consumer and Industrial Marketing Channels Copyright © 2012 Pearson Education 15 -10
![Chapter Question 2: What work do marketing channels perform? Service Sector Channels • Services Chapter Question 2: What work do marketing channels perform? Service Sector Channels • Services](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-12.jpg)
Chapter Question 2: What work do marketing channels perform? Service Sector Channels • Services and ideas companies also face the problem of making their output available and accessible to target populations. • As internet and other technologies advance, service industries such as banking, insurance, travel, and stock buying and selling are operating through new channels. Copyright © 2012 Pearson Education 15 -11
![Channel-Design Decisions Designing a marketing channel system requires: 1. Analyzing customer needs 2. Establishing Channel-Design Decisions Designing a marketing channel system requires: 1. Analyzing customer needs 2. Establishing](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-13.jpg)
Channel-Design Decisions Designing a marketing channel system requires: 1. Analyzing customer needs 2. Establishing channel objectives 3. Identifying major channel alternatives 4. Evaluating major channel alternatives We’ll look at each in turn… Copyright © 2012 Pearson Education 15 -12 Chapter Question 3: How should channels be designed?
![1 - Analyzing Customers’ Desired Service Output Levels Channels produce five service outputs: 1. 1 - Analyzing Customers’ Desired Service Output Levels Channels produce five service outputs: 1.](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-14.jpg)
1 - Analyzing Customers’ Desired Service Output Levels Channels produce five service outputs: 1. Lot size (car rent – taxi) 2. Waiting/delivery time. (Faster) 3. Spatial convenience. (easy to reach) 4. Product variety. (greater choices) 5. Service backup (credit – repair) Copyright © 2012 Pearson Education 15 -13 Chapter Question 3: How should channels be designed?
![2 - Establishing Objectives and Constraints Chapter Question 3: How should channels be designed? 2 - Establishing Objectives and Constraints Chapter Question 3: How should channels be designed?](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-15.jpg)
2 - Establishing Objectives and Constraints Chapter Question 3: How should channels be designed? • Marketers should state their channel objectives in terms of targeted service output levels. (cost / service) • Channel objectives vary with product characteristics. Fresh – nonstandard- Installations – high value • Other factors affect channel objectives: o Entering new markets o Business environment pressures, e. g. economic conditions, laws, etc Copyright © 2012 Pearson Education 15 -14
![3 - Identifying and Evaluating Major Channel Alternatives Chapter Question 3: How should channels 3 - Identifying and Evaluating Major Channel Alternatives Chapter Question 3: How should channels](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-16.jpg)
3 - Identifying and Evaluating Major Channel Alternatives Chapter Question 3: How should channels be designed? Companies can choose from a wide variety of channels for reaching customers, from sales forces to agents, distributors, dealers, direct mail, telemarketing, and the internet. Each channel has unique strengths as well as weaknesses. Copyright © 2012 Pearson Education 15 -15
![Identifying and Evaluating Major Channel Alternatives Chapter Question 3: How should channels be designed? Identifying and Evaluating Major Channel Alternatives Chapter Question 3: How should channels be designed?](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-17.jpg)
Identifying and Evaluating Major Channel Alternatives Chapter Question 3: How should channels be designed? Number of Intermediaries Three strategies are available: • Exclusive distribution (control–close partnership- new car - • Selective distribution (New company- special) • Intensive distribution (grocery- hard long run – price war) Mc. Donald’s Bahrain operates one of the few 24/7 Mc. Delivery services in the world. Copyright © 2012 Pearson Education 15 -16
![4 - Evaluating the Major Alternatives Chapter Question 3: How should channels be designed? 4 - Evaluating the Major Alternatives Chapter Question 3: How should channels be designed?](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-18.jpg)
4 - Evaluating the Major Alternatives Chapter Question 3: How should channels be designed? Each channel alternative needs to be evaluated against economic, control, and adaptive criteria. • Economic criteria – Each channel alternative will produce a different level of sales and costs. Booz Allen Branch 4. 07 Phone 0. 54 ATM 0. 27 Web 0. 1 Fig. 15. 4: The Value-Adds versus Costs of Different Channels Copyright © 2012 Pearson Education 15 -17
![Channel-Management Decisions Chapter Question 4: What decisions do companies face in managing their channels? Channel-Management Decisions Chapter Question 4: What decisions do companies face in managing their channels?](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-19.jpg)
Channel-Management Decisions Chapter Question 4: What decisions do companies face in managing their channels? After a company has chosen a channel system, it must: • Select, train, motivate, and evaluate individual intermediaries for each channel. • Modify channel design and arrangements over time. Copyright © 2012 Pearson Education 15 -18
![Selecting Channel Members Chapter Question 4: What decisions do companies face in managing their Selecting Channel Members Chapter Question 4: What decisions do companies face in managing their](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-20.jpg)
Selecting Channel Members Chapter Question 4: What decisions do companies face in managing their channels? The company needs to decide which characteristics distinguish the better intermediaries. Criteria might include: • Number of years in business • Other lines carried • Growth and profit record • Financial strength • Cooperativeness • Service reputation • Locations • Future growth potential • Type of clientele Copyright © 2012 Pearson Education 15 -19
![Chapter Question 4: What decisions do companies face in managing their channels? Training and Chapter Question 4: What decisions do companies face in managing their channels? Training and](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-21.jpg)
Chapter Question 4: What decisions do companies face in managing their channels? Training and Motivating Channel Members Channel power is the ability to alter channel members’ behavior so that they take actions they would not otherwise have taken. Companies can use the following types of power to gain cooperation: • Coercive power (withdraw) • Reward power (benefits) • Legitimate power (warrantee) • Expert power (Knowledge) • Referent power (Associate with) Copyright © 2012 Pearson Education 15 -20
![Evaluating Channel Members Chapter Question 4: What decisions do companies face in managing their Evaluating Channel Members Chapter Question 4: What decisions do companies face in managing their](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-22.jpg)
Evaluating Channel Members Chapter Question 4: What decisions do companies face in managing their channels? Producers must periodically evaluate intermediaries’ performance. They can use standards such as: • Sales quota attainment • Average inventory levels • Customer delivery time • Treatment of damaged and lost goods • Cooperation in promotional and training programs Copyright © 2012 Pearson Education 15 -21
![Channel Integration and Systems Chapter Question 5: How should companies integrate channels and manage Channel Integration and Systems Chapter Question 5: How should companies integrate channels and manage](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-23.jpg)
Channel Integration and Systems Chapter Question 5: How should companies integrate channels and manage channel conflict? Vertical Marketing Systems (VMS) In a VMS, the producer, wholesaler(s), and retailer(s) act as a unified system. Three types of VMS: • Corporate VMS (one ownership) Sears • Administered VMS (one member _ P&G / Americana) • Contractual VMS (Independent firm) Copyright © 2012 Pearson Education 15 -22
![Horizontal Marketing Systems Chapter Question 5: How should companies integrate channels and manage channel Horizontal Marketing Systems Chapter Question 5: How should companies integrate channels and manage channel](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-24.jpg)
Horizontal Marketing Systems Chapter Question 5: How should companies integrate channels and manage channel conflict? In a horizontal marketing system, two or more unrelated companies put together resources or programs to exploit an emerging market opportunity. Horizontal marketing systems include HDFC Bank’s arrangement with exchange houses throughout several Gulf countries. Copyright © 2012 Pearson Education 15 -23
![Chapter Question 5: How should companies integrate channels and manage channel conflict? Integrating Multichannel Chapter Question 5: How should companies integrate channels and manage channel conflict? Integrating Multichannel](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-25.jpg)
Chapter Question 5: How should companies integrate channels and manage channel conflict? Integrating Multichannel Marketing Systems • Multichannel marketing occurs when a single firm uses two or more marketing channels to reach one or more customer segments. • An integrated marketing channel system is one in which the same strategies and tactics of selling are used through all channels. A traveler can get flight schedule information and rates and buy a ticket through the airline’s own office, through airline appointed agents, through a travel agent, through the airline’s website, or through an online web portal or intermediary. Copyright © 2012 Pearson Education 15 -24
![Chapter Question 5: How should companies integrate channels and manage channel conflict? Integrating Multichannel Chapter Question 5: How should companies integrate channels and manage channel conflict? Integrating Multichannel](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-26.jpg)
Chapter Question 5: How should companies integrate channels and manage channel conflict? Integrating Multichannel Marketing Systems • Train all store associates on processes for online merchandise returns. • List your company’s freephone number on the internet homepage, and be sure your customerservice hours of operation are easily accessible. • Provide an information center that is easy to navigate and includes contact information, FAQs, guarantees, return policies, and tips for first-time customers. • Implement a store locator feature that includes store locations, hours, and events. • Make store pickup for purchases an option and include real-time inventory levels, where applicable. • Post the store’s weekly circular online for a more complete multichannel experience. • Offer gift certificates that can be redeemed online and offline. • Send e-mail notifications of the order, shipping, and return credit; include a reminder of the returns process in notifications as well as a link to your store locator. • Supply all pertinent/compatible information for store return of merchandise on the packing slip or invoice. Copyright © 2012 Pearson Education 15 -25
![Integrating Multichannel Marketing Systems Chapter Question 5: How should companies integrate channels and manage Integrating Multichannel Marketing Systems Chapter Question 5: How should companies integrate channels and manage](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-27.jpg)
Integrating Multichannel Marketing Systems Chapter Question 5: How should companies integrate channels and manage channel conflict? Figure 15. 6 shows a simple grid to help make channel architecture decisions. Fig. 15. 6: The Hybrid Grid Copyright © 2012 Pearson Education 15 -26
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Conflict, Cooperation and Competition Chapter Question 5: How should companies integrate channels and manage channel conflict? Types of Conflict and Competition Channel conflict occurs when one member’s actions prevent another channel from achieving its goal. Types of channel conflict: • Vertical • Horizontal • Multichannel Copyright © 2012 Pearson Education 15 -27
![Causes of Channel Conflict may arise from: • Goal incompatibility • Unclear roles and Causes of Channel Conflict may arise from: • Goal incompatibility • Unclear roles and](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-29.jpg)
Causes of Channel Conflict may arise from: • Goal incompatibility • Unclear roles and rights • Differences in perception • Intermediaries’ dependence on manufacturer Copyright © 2012 Pearson Education 15 -28 Chapter Question 5: How should companies integrate channels and manage channel conflict?
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Managing Channel Conflict Chapter Question 5: How should companies integrate channels and manage channel conflict? Box 15. 3: Strategies to Manage Channel Conflict Copyright © 2012 Pearson Education 15 -29
![Dilution and Cannibalization • Marketers must be careful not to dilute their brands through Dilution and Cannibalization • Marketers must be careful not to dilute their brands through](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-31.jpg)
Dilution and Cannibalization • Marketers must be careful not to dilute their brands through inappropriate channels. • This is especially a concern with luxury brands whose images are often built on the basis of exclusivity and personalized service. Chapter Question 5: How should companies integrate channels and manage channel conflict? Coach avoids brand dilution while enjoying multichannel distribution by keeping its full-price store shoppers separate from its discount shoppers, even locating its factory outlets a minimum of 95 kilometers from its retail stores. Copyright © 2012 Pearson Education 15 -30
![E-Commerce Marketing Practices Chapter Question 6: What are the key issues with e-commerce? • E-Commerce Marketing Practices Chapter Question 6: What are the key issues with e-commerce? •](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-32.jpg)
E-Commerce Marketing Practices Chapter Question 6: What are the key issues with e-commerce? • e-business - the use of electronic means and platforms to conduct a company’s business. • e-commerce - a company or site offers to transact or facilitate the selling of products and services online. • e-purchasing - purchase of goods, services, and information from various online suppliers. • e-marketing - company efforts to inform buyers, communicate, promote, and sell its products and services over the internet. Copyright © 2012 Pearson Education 15 -31
![E-Commerce Marketing Practices Chapter Question 6: What are the key issues with e-commerce? The E-Commerce Marketing Practices Chapter Question 6: What are the key issues with e-commerce? The](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-33.jpg)
E-Commerce Marketing Practices Chapter Question 6: What are the key issues with e-commerce? The text explores particular issues for the following: • Pure-click companies – companies that have launched a website without any previous existence as a firm. • Brick-and-click companies – existing companies that have added an online site for information and/or e-commerce. • M-commerce – use of mobile phones or PDAs to access the internet. Copyright © 2012 Pearson Education 15 -32
![Credits Slide 1 Alamy Images: Tom Tracy Photography • • Slide 7 Peter N. Credits Slide 1 Alamy Images: Tom Tracy Photography • • Slide 7 Peter N.](http://slidetodoc.com/presentation_image_h2/1ee77f280669b1c3e3b214fca9470a58/image-34.jpg)
Credits Slide 1 Alamy Images: Tom Tracy Photography • • Slide 7 Peter N. Child, Suzanne Heywood, and Michael Kliger, “Do Retail Brands Travel? , ” Mc. Kinsley Quarterly, January 2002, pp. 11– 13. Reprinted by permission • Slide 18 Alamy Images: Jochen Tack Slide 20 ‘The Value-Adds versus Costs of Different Channels’ adapted from Oxford Associates, Dr. Rowland T. Moriarty, Cubex Corporation. Reproduced with kind permission • • • Slide 27 Travel. Store Slide 29 Getty Images: India Today Group Slide 30 Egypt Air, www. egyptair. com. Reproduced with kind permission • • Slide 32 adapted from “Marketing Hybrid Marketing Systems” Harvard Business Review, p. 150 (Moriarty, R. T. , and Moran, U. ), November– December 1990, copyright © 1990 by President and Fellows of Harvard College. All rights reserved • Slide 36 Press Association Images: Weng lei / AP
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