Contents

 Channel Management Decision

 Channel Power

 Channel Integration and Systems

Asim G.M
Channel Management Decision

Channel management decision can be defined as

the administration of existing channels to secure the
cooperation of channel members in achieving the firm’s
administrative objectives.
 CHANNEL MANAGEMENT
DECISIONS

Selecting Channel Members Training Channel Members

Motivating Channel Members Evaluating Channel Members

Modifying Channel Members

SELECTING CHANNEL MEMBERS

Finding Prospective Channel Selection Criteria

Members

Securing the Channel Members

Training Channel Members

Field Training Class Room Training

Orientation Program Technical Training

Installation Training Servicing Training

MOTIVATING CHANNEL MEMBERS

Benefits & Costs Offered to

Relationship Marketing Intermediaries

Cooperative Programs
EVALUATING CHANNEL MEMBERS

Activity Based Costing Channel Audit

Direct Product Profit

MODIFYING CHANNEL MEMBERS

Customer-Driven Refinement of
PLC Changes Existing Channels

Growth of Multi-Channel
Marketing Systems
Channel Power

It is the ability to control the decisions variables in

the marketing strategy of another member in a given
channel at a different level of distribution.

All channels consists of a number of players who

are dependent on each other and it is the power equations
between them that keep them working together to
achieve the channel objectives
 CHANNEL POWER

COERCIVE REWARD

LEGITIMATE EXPERT

REFERENT
COERCIVE:
Threat of punishment (e.g. a manufacturer might
threaten a retailer with loss of exclusive distribution)

REWARD:
Ability to offer an award (e.g. granting of exclusive
distribution)

LEGITIMATE:
Power from contract agreement or organizational
relationships
EXPERT:
Power resulting from technological expertise or
proprietary reasons

REFERENT:
Power resulting from ability to influence further
action
Channels of Integration

Distribution channel don’t stand still. New

wholesaling and retailing institutions evolve new
channel systems.
 Types of Channels of Integration

 Vertical marketing systems

- Corporate VMS
- Administered VMS
- Contractual VMS

 Horizontal marketing systems

 Multichannel systems
Vertical Marketing Systems
In a vertical marketing system, distinct pieces in the
distribution channel, typically producers, wholesalers and retail
outlets, work together as a unit to deliver products to end users.
Under a conventional system, each piece in the distribution
channel functions as an independent business and tries to increase
its own profits, often at the expense of other businesses in the
channel.
Vertical Marketing Systems
Corporate VMS - where coordination and conflict management
are attained by common ownership

Administered VMS - where coordination and conflict management

are attained through contractual agreements among members of the
system

Contractual VMS - where leadership is assumed by one dominant

system member
Horizontal Marketing Systems

HMS refers to when two or more companies, not related

to on another but at the same channel level, work together for a
common purpose. For e.g., Travel agents.
Multichannel Systems

A multichannel distribution system is a distribution

system in which a single firm sets up two or more marketing
channels to reach one or more customer segments. This is also
called a hybrid marketing channel.