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Chapter 17 Designing and Managing Value Networks and Marketing Channelsby PowerPoint by Milton M. Pressley University of New Orleans Kotler on Marketing Establish channels for different target markets and aim for efficiency, control, and adaptability. Chapter Objectives In this chapter, we focus on the following channel questions from the viewpoint of the manufacturers: What is the value network and marketing channel system? What work is performed by marketing channels? What decisions do companies face in designing, managing, evaluating, and modifying their channels? What trends are taking place in channel dynamics? How can channel conflict be managed? What is a Value Network and Marketing-Channel System? Value Network Marketing channel What is a Value Network and Marketing-Channel System? “Go-to-market” or hybrid channels IBM’s sales force sells to large accounts, outbound telemarketing sells to medium-sized accounts, direct mail sells to small accounts, retailers sell to still smaller accounts, and the Internet to sell specialty items Charles Schwab enables its customers to do transactions in branch offices, over the phone, or via the Internet Staples markets through traditional retail, direct-response Internet site, virtual malls, and 30,000 linked affiliated sites What is a Value Network and Marketing-Channel System? Channel integration characteristics: Ability to order a product online, and pick it up at a convenient retail location Ability to return an online-ordered product to a nearby store Right to receive discounts based on total of online and off-line purchases What Work is Performed by Marketing Channels? Many producers lack the financial resources to carry out direct marketing In some cases direct marketing simply is not feasible Producers who do establish their own channels can often earn a greater return by increasing their investment in their main business. Figure 17.1: How a Distributor Effects an Economy of Effort What Work is Perform
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