Designing and managing Integrated Marketing Channels

The main aim of Channel Management

Channel Management is a communication process between all the people involved from the sellers side i.e. all members who helps to get the product into existence and ready for selling purpose till the last customer which helps the consumer  to get value from the product.

So, the main aim of Channel Management is to maximize the value gained by the consumer be in terms of quality,quantity,timeliness,packaging,services,after sale services and also now a days services like sending messages via SMS,mails about recent developments.

All these comprises of Channel Management.

As it is a very complex and looped process it needs to managed very delicately across various point of contact or across various functions and channel partners.

There are two parts of Channel Management-

1. Marketing channels 
2. Value Chains

Marketing channels comprises of different organisation which helps in making the product available to the customer whereas value chain comprises of the relations like partnership,alliances etc which helps in sourcing,processing and delivering of the product.

There are two types of strategies

1)Pull Strategy

2)Push Strategy

Push Strategies are when the producers induces the intermediaries to promote and sell the product by using its sales force and trade promotions etc. It is beneficial if the brand loyalty of the product is high,it is a product which is required frequently and benefits of it is well understood.

Pull Strategies are the strategies in which involves use of advertising and other promotional techniques so that it creates demand from the customers side which will induce the intermediaries to demand product from time to time.It happens in case where the brands are kept at priority and brand differentiation is present.

Channel Design Decision

It  depends upon:

• Customer Service Expectation

Lot size.waiting period.spatial convenience,product variety, service back up etc.

• Objectives and Constraints of the Organisation-targeted output level,product characteristics,environmental factors like-competitors channel,economic conditions and legal regulations and restrictions
• Channel Alternatives

                      Types of intermediaries
                                   Merchants
                                   Facilitators
                     Number of intermediaries
                                   Exclusive
                                   Selective
                                   Intensive

                   Terms and responsibilities of channel members

                                 Price policy

                                Conditions of sale

                                Distributors’ territorial rights

                               Mutual services and responsibilities

• Major Alternatives

Check out various alternatives like weather we can sell at a lower cost or sales agency

or estimating the cost of selling products through various channels.

Consumer and industrial marketing channels

CHANNEL MANAGEMENT DECISION

Channel Management involves taking on various decisions like,

deciding the channel members

Having conversation with them so that there is an exchange of priorities between the channel and the producer

Training and motivating them

Evaluating them

Making changes if any is required in the channel arrangements.

CHANNEL INTEGRATION SYSTEM

This comprises of three methods:

1. Vertical Marketing System
2. Horizontal Marketing System
3. Multi Channel Marketing Systems

Vertical Marketing System

It comprises of three systems-

    a) corporate VMS- whole sellers-sponsored voluntary chain,retailers cooperatives and franchises organisation

    b)Administered VMS 

    c)Contractual VMS 

Horizontal Marketing Systems

When Two or more unrelated companies put together their resources or programs to exploit an emerging marketing opportunity.

Multi Channel Marketing Systems

Multi channel marketing Occurs when a single firm uses two or more marketing channels to reach one or more customer segments.

Multi Channel Marketing Systems

Strategies and tactics of selling through one channel reflect the strategies and tactics of selling through other channels.

CONFLICTS IN AN ORGANISATION

As it involves so many organisation or individuals conflicts are sure to arise.
There are two types of conflicts-

1. vertical conflict 
2. Multi channel Conflict

The various causes for Channel Conflicts are-

• Goal Incompatibility-when any one or more members have a different goal which does not match with the goal of the channel it leads to conflicts between them.
• Unclear goals and rights-When one channel partner is not clear of the overall goals of the channel then it leads to wrong decisions and the compatibility between various channel partners gets diluted.
• Differences and Preferences-Differences arising between partners and change in preference will lead to conflict.
• Dependence-The channel is a complete process which moves from one person to another and so when one person is not able to provide the material demanded by the ultimate customer because of negligence upper channel partners it leads to conflict between persons.

Strategies for Managing Channel Conflict

• Adoption of superordinate goals
• Exchange of employees
• Joint membership in trade associations
• Co-optation
• Diplomacy, mediation, or arbitration
• Legal recourse