MM 18 Distribution Part 2 2019 C
MM 18 Distribution Part 2 2019 C
DISTRIBUTION
2
MAJOR TYPES OF CHANNEL DECISIONS
I. CHANNEL DESIGN DECISIONS
1.TYPES OF INTERMEDIARIES
2. NUMBER OF INTERMEDIARIES AT
EACH CHANNEL LEVEL (Exclusive
distribution, Selective Dist. or
Intensive Dist.)
3. TERMS & RESPONSIBILITIES OF
CHANNEL MEMBERS
(territorial rights, margins,payment
terms, mutual services etc.)
MAJOR TYPES OF CHANNEL DECISIONS
(Contd. )
• II. CHANNEL MANAGEMENT DECISIONS
• Price policy
• Condition of sale
• Distributors’ territorial rights
• Mutual services and responsibilities
Cooperative Arrangements 9
Motivation Management:
– Reward power
– Coercive power
– Legitimate power
– Expert power
– Referent power
Sources of Channel Power
Coercive
Reward
Legitimate
Expert
Referent
Channel Conflict
Channel conflict
• Arises when behaviour of channel member in opposition to its
channel counterpart; Occurs when one member views its upstream
or downstream as an adversary or opponent; attempt to block each
other.
Sources of conflict
– Goal divergence
– Unclear roles and rights
– Domain dissents
• Population issues
• Territory issues
• Gray markets
– Differing perception of reality
(Vertical Conflict, Horizontal Conflict, Multi-Channel conflict)
Managing Channel Conflict
• Adoption of
superordinate goals
• Cooptation
• Diplomacy
• Mediation
• Arbitration
CHANNEL CONFLICT
Coercive power?
Ethical Decision?
Survival Decision?
e-Commerce Marketing Practices
• Pure-click
• Brick-and-click
• Brick-and-mortar
Channel Trends
(Direct Marketing)
Producer Buyer
Personal Selling
Telemarketing
Toll free phone #
Catalog order
Fax order
Mail order
E Commerce
9
Partnerships & Strategic Alliances
Legal Issues:
Exclusive Dealing
Exclusive Territories
Tying Contracts
Court
Channel Legal Issues
Product Liability
Refusal to Deal
Channel Captain
• Leadership
• Cooperation
Power
• Conflict