For one-quarter/semester, senior/graduate-level courses in Distribution Channels, Marketing Channels, or Marketing Systems. This best-selling text has a new look and a new author helping to keep this classic at the leading edge of Channels research. Using examples taken from all over the world, this text shows students how to design, develop, and maintain effective relationships among channel members to achieve sustainable competitive advantage by using both strategic and managerial frames of reference. It emphasizes strategies for planning, organizing, and controlling the alliances among the institutions, agencies, and in-house units that bring products and services to market. The text focuses on the way in which marketing channels can provide customer service-both for the end-users they serve and the organizations that comprise them.
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The Fifth Edition of Marketing Channels shows readers how to design, develop and maintain effective relationships among channel members to achieve sustainable competitive advantage by using both strategic and managerial frames of reference. It emphasizes strategies for planning, organizing and controlling the alliances among the institutions, agencies and in-house units that bring products and services to market. The text focuses on the way in which marketing channels can provide customer service--both for the end-users they serve and the organizations that comprise them.From the Inside Flap:
This book is intended for an international audience of practicing and future managers. It is written in English, the international language of business. The subject is marketing channels, the companies that come together to bring products and services from their point of origin to the point of consumption. Marketing channels are the downstream part of a value chain. The originator of goods or services gains access to a market through marketing channels. Channels of distribution are a critical element of business strategy.
The ideas in this book apply to any channel for any product or service in any market. The generality of the book is shown in its many examples taken from all over the world. These cover a wealth of different products and services, sold to businesses and consumers, selected from the worldwide business press, research, and consulting. Some examples are autopsies; dog and cat food; personal computers; pleasure boats; dolls; stereo speakers; fast food; tires; garden products; fast-moving consumer goods; maternity clothing; uninterruptible power supplies; maintenance, repair, and operating (MRO) goods; furniture; automobiles; airline travel services; and mutual funds. The variety of the list reinforces the generality of the principles. As is appropriate for an international readership, the presentation of each example is as though the reader is unfamiliar with the product or market in question. This book covers the highlights needed to frame the problem, then covers the channel issues in the examples. Channel Sketches provide detailed examples to improve the readability of the main text.
Each chapter is designed to stand on its own. The chapters may be read in any order, and any chapter may be omitted. Each chapter is of a length that can be assigned for a single class or read in one sitting with a single issue in mind. The chapters are designed modularly. Essential definitions are repeated where necessary so that the reader is free to choose one chapter and defer or omit another. Reference is made to other chapters when appropriate for the reader to go further into any topic raised in the chapter at hand. In this way, the reader can select how deeply to delve into all the sections of the book that most closely fit the problem under consideration.
The content of each chapter comes from the best of current research and practice. This book covers a vast and varied literature, bringing in findings, practice, and viewpoints from multiple disciplines (marketing, strategy, economics, sociology, law, political science) and from the best practices of channel managers worldwide. In presenting these works, the focus is on framing the problem and its solution in the language of business rather than on the technical aspects of the research. Yet the book introduces technical vocabulary in the appropriate instances for the manager. The theory, data, and methods that underlie the content of this book are not detailed. Instead, the relevant references are liberally noted and tied to the content, so that the interested reader may delve further into specific points.
The text is organized into four parts. Part One, "Introduction and Analytic Framework for the Book," introduces the basic ideas and concepts underlying channel analysis. It explains why specialized institutions and agencies have emerged to assist in the task of making goods and services available for industrial, institutional, and household consumption. Among the more critical concepts introduced in Chapter 1 are the notions of "service outputs" and marketing "flows" on which the remainder of the book relies heavily. Chapter 2 provides a coherent framework for building, maintaining, and analyzing channel structure and function. It includes demand-side analysis, supplyside analysis of both channel flows and channel structures, the analysis of gaps on the demand and supply sides, and responses by channel managers concerning the creation or modification of channel structures to meet target segments' needs. It also emphasizes the importance of ongoing management and coordination of the channel through the use of channel power sources and the recognition and management of channel conflict. This framework unifies the discussion throughout the rest of the book and forms the basis for the book's approach to channel design and management.
Part Two, "Channel Design: Demand, Supply, and Channel Structure," develops the framework for channel creation or modification. Chapter 3 focuses on the demand side by discussing how to segment a market for the purposes of channel design appropriately, using the core concept of service output demands. Chapter 4 turns to the supply side of the channel, introducing the concept of channel flows to describe the work done by channel members. This chapter emphasizes the importance of distributing flow responsibilities to channel members who can perform them most efficiently. Not only is the allocation of flows important, so is the issue of channel structure. This is the topic of Chapter 5, which discusses the types of firms that can and should be included in the channel, how broadly distributed the channel's products should be, and who specifically should be a member of the channel. Chapter 6 brings together the demand and supply sides through a discussion of gap analysis, whereby gaps can exist on the demand side, the supply side, or both. Sources of gaps, types of gaps, and methods of closing channel gaps are all discussed. Chapter 7 discusses a key issue in channel structure: whether to vertically integrate the channel. This chapter covers the make-or-buy issue in channels, as well as the decision whether to adopt an intermediate solution. These options blend the features of make and of buy. The next part of the book covers how to create such a midrange solution.
Part Three "Channel Coordination and Implementation," discusses how to get all the members of a channel to work in concert with one another. Concerted or coordinated action does not happen naturally in a marketing channel. This part covers how to overcome this problem by crafting channels that function smoothly in pursuit of common goals. Power is the subject of Chapter 8, which examines how to obtain the potential for influence—and how to use it. Of course, channels are full of conflict, as discussed in Chapter 9. Here, the emphasis is on how to diagnose the true sources of conflict and how to direct conflict to use it as a constructive force for change. A fundamental issue underlying almost every attempt to coordinate a channel is how thoroughly a marketplace is covered (how many places a customer could buy a product or service). The intensity of distribution is related to vertical restraints (such as tying contracts and resale price maintenance) and to how many brands a channel member carries (the degree of exclusivity in dealing). These topics are the subject of Chapter 10. Power, conflict, and intensity of distribution all turn on how to influence channel members. The ultimate form of influence is to forge a strategic alliance in a channel, covered in Chapter 11. Because efforts to coordinate often run afoul of the law, the legal environment (Chapter 12) closes this part.
Part Four, "Channel Institutions," describes and evaluates the predominant institutional forms at each level of a marketing channel. The retailing level has a great variety of form: The major issues and challenges confronting them are discussed in Chapter 13. This chapter focuses on physical stores, which customers visit. Chapter 14 covers the rapidly growing nonstore alternatives, including electronic channels, catalogs, and direct selling. Further up in the value-added chain is the wholesaling sector, the subject of Chapter 15. A critical element of value added in marketing channels is logistics and sup-, ply chain management, the topic of Chapter 16. Finally, Chapter 17 deals with the fascinating, complex, and inherently contradictory channel institution of franchising, discussing how, when, and why franchising works.
The sixth edition differs from the fifth edition in its organization of material, but not in its philosophical underpinning. The framework for analysis is presented first, followed by institutionally oriented chapters, rather than the reverse, as in the fifth edition. The framework is also expanded over more chapters, each of which can be the focus of a single course session. The book is significantly internationalized throughout, reflecting the importance of channel management issues throughout the world. This edition also provides extensive coverage of the impact of electronic commerce on channel design and management, both in examples in each chapter and in the separate treatment of the issue in Chapter 14.
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