I. Basics

     A. Channels Defined-interdependent organizations involved in the process of making a product available.
        (System of Relationships).
 

     B. Channel Functions-Overhead

          Transactional

               Buying
               Selling
               Risk-taking

          Logistical

               Creates Assortments
               Stores (Inventory)
               Sorts
               Transports

          Facilitating

               Financing
               Information and Research
               Other Services

     C. Intermediaries-

     D. Channel Structure-

     E. Channel Efficiency

          Make or Buy Decision

          Functional Efficiency

          Scale Efficiency

          Transactional Efficiency

 
II. Channel Design-(Decisions)

     A. Objectives
 
              Product Availability
              Customer Service Requirements
              Promotional Effort
              Market Information
              Cost-effectiveness
              Flexibility

     B. Direct or Indirect

              Wholesalers
              Retailers
              Agents and Brokers

 
 
     C. Distribution Strategy-

              Exclusive-

              Selective-

              Intensive-

     D. Dual Distribution-

              Complimentary-

              Competitive-

     E. Channel Modifications

               Reasons

                   1. Changes in CB
                   2. Competition
                   3. Change in value added by Retailers
                   4. Manufacturer's Resources
                   5. Changes in Sales Volume
                   6. Changes in 4'ps or positioning
                   7. Intermediary Performance
 

III. Channel Management
 
     A. Control Strategies
 
              Vertical Marketing Systems

                   Corporate

                   Contractual

                   Administered

     B. Decision Making and Power

              Ability (capacity) to influence someone else.

              Manufacturer:

                   1. # Alternatives
                        % of Sales from
                        Substitute intermediaries
                        Forward Integration

                   2. Nature of Demand for the product
                        General Demand
                        Substitute Products

                   3. Expertise/Knowledge
 
                   4. Brand Loyalty

                   5. Resources

              Intermediary:

                   1. # Alternatives
                        % of Sales from
                        Manufactures
                        Substitute Products

                   2. Expertise/Knowledge

                   3. Store/Intermediary Loyalty

                   4. Resources
 

     C. Channel Conflict

          Types

               1. Vertical

               2. Horizontal

          Sources:

               1. Goal Divergence

               2. Domain Dissensus
                (Who does what where)

               3. Differing Perceptions of Reality

               4. Misuse of Power

          Resolution:
 

     D. Control Strategies

          Pull

          Push

     E.  Channel Evaluation

           1. Cost of Distribution

           2. Market Coverage

           3. Customer Service

           4. Communication

           5. Control


 
     Things to Remember

         1. The channel is like a value chain.
         2. Intermediaries are your customers
              (Sold, Promoted, Motivated)
         3. The channel is an extension of your firm.
         4. Channel decisions can be difficult to reverse.