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Channel Behavior and Organization

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by

Analie Debaudin

on 14 January 2014

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Transcript of Channel Behavior and Organization

Vertical
Marketing
System
Horizontal
Marketing System
- a channel arrangement
in which two or more
companies at one level
join together to follow a
new marketing
opportunity
Multi-Channel
Distribution System
Channel
Behavior
Channel
Conflict
- disagreement among
marketing channel members
on goals, roles and
rewards- who should do
what and for what
rewards
Channel
Behavior
and
Organization
Placing of
Products

Horizontal
Conflict
- occurs among firm
at the same level
of the channel
Each channel
member plays a specialized role in the channel and the success of individual channel members depends on overall channel success, thus channel firms should work together smoothly.
Members should
accept their roles, coordinate their
activities, and
cooperate to attain
overall channel
goals.
Channel
members often
act alone in their
own short- run
best
interests.
Vertical
Conflict
- conflicts between
different levels of
the same channel
1. Corporate
VMS
- a VMS that combines
successive stages of production
and distribution under single
ownership - channel leadership
is established through
common ownership
2. Contractual VMS
- a VMS in which
independent firms at different
levels of production and
distribution join together
through contracts
Example:
Franchise Organization
- a contractual VMS in which channel member - franchisor - link several stages in the production - distribution process
1.
Manufacturer - sponsored
retailer
franchise
system
2.
Manufacturer - sponsored
wholesaler
franchise
system
3.
Service-firm -
sponsored
retailer
franchise
system
3. Administered
VMS
- a VMS that coordinates
successive stages of
production and distribution
through the size and power
of one of the parties
- a distribution system in
which a single form sets up
two or more marketing
channels to reach one or
more customers
segments
Changing
Channel
Organization
Disintermediation
- the cutting out of marketing
channel intermediaries by
product or service producers, or
the displacement of traditional
resellers by radical new
types of intermediaries
Presents
problems and
opportunities for
producers and
resellers
Full transcript