2000 Prentice HallObjectivesObjectivesWork Performed by Marketing ChannelsWork Performed by Marketing ChannelsChannel-Design DecisionsChannel-Design DecisionsChannel-Management DecisionsChannel-Management DecisionsChannel DynamicsChannel Dynamics2000 Prentice HallHow a Distributor Reduces theNumber of Channel Transactions= = CustomerCustomer= = ManufacturerManufacturerA. Number of contacts A. Number of contacts without a distributorwithout a distributorM x C = 3 X 3 = 9M x C = 3 X 3 = 91 13 32 24 45 56 67 78 89 92000 Prentice HallHow a Distributor Reduces theNumber of Channel Transactions= = DistributorDistributor= = CustomerCustomer= = ManufacturerManufacturerB. Number of contacts B. Number of contacts with a distributorwith a distributorM x C = 3 + 3 = 6M x C = 3 + 3 = 6Store1 12 23 34 45 56 62000 Prentice HallDistribution Channel FunctionsDistribution Channel FunctionsOrderingPaymentsCommunicationTransferNegotiationFinancingRisk TakingPhysicalDistributionInformation2000 Prentice HallCustomers Desired Service LevelsCustomers Desired Service LevelsLot sizeLot sizeWaiting timeWaiting timeSpatial convenienceSpatial convenienceProduct varietyProduct varietyService backupService backup2000 Prentice HallChannel Management DecisionsChannel Management DecisionsSelectingFEEDBACKMotivatingTrainingEvaluating2000 Prentice HallTypes of Vertical Marketing SystemsTypes of Vertical Marketing SystemsCorporateCommon Ownership at Different Levels of the ChannelContractualContractual Agreement AmongChannel MembersAdministeredLeadership is Assumed by One ora Few Dominant Members2000 Prentice HallConventional Distribution Channel vs. Vertical Marketing SystemsVerticalVerticalmarketingmarketingchannelchannelManufacturerRetailerConventionalConventionalmarketingmarketingchannelchannelConsumerManufacturerConsumerRetailerWholesalerWholesaler2000 Prentice HallCauses of Channel Causes of Channel Causes of Channel ConflictConflictConflictIncompatibilityIncompatibilityDifference in PerceptionDifference in PerceptionDependenceDependenceLegal & Ethical Issues in Legal & Ethical Issues in Legal & Ethical Issues in Channel RelationsChannel RelationsChannel RelationsExclusive DealingExclusive DealingExclusive TerritoriesExclusive TerritoriesTying AgreementsTying AgreementsDealers RightsDealers Rights