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    Marketing Channels and Systems: (Cont'd.)

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    zan tran
    The document discusses different types of marketing channel systems: [1] Vertical marketing systems where manufacturers, wholesalers, and retailers act as a unified system to improve efficiency and profits. This includes corporate, administered, and contractual systems.] [2] Horizontal marketing systems where companies at the same level join together to pursue new opportunities, like Coca-Cola and Nestle's joint venture for ready-to-drink coffee and tea. [3] Multi-channel systems allow companies to use multiple channels to reach different customer segments.

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    Marketing Channels and Systems: (Cont'd.)

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    zan tran
    61 views18 pages
    The document discusses different types of marketing channel systems: [1] Vertical marketing systems where manufacturers, wholesalers, and retailers act as a unified system to improve efficiency and profits. This includes corporate, administered, and contractual systems.] [2] Horizontal marketing systems where companies at the same level join together to pursue new opportunities, like Coca-Cola and Nestle's joint venture for ready-to-drink coffee and tea. [3] Multi-channel systems allow companies to use multiple channels to reach different customer segments.

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    5_Marketing-Channels_contd

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    The document discusses different types of marketing channel systems: [1] Vertical marketing systems where manufacturers, wholesalers, and retailers act as a unified system to improve efficiency and profits. This includes corporate, administered, and contractual systems.] [2] Horizontal marketing systems where companies at the same level join together to pursue new opportunities, like Coca-Cola and Nestle's joint venture for ready-to-drink coffee and tea. [3] Multi-channel systems allow companies to use multiple channels to reach different customer segments.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    61 views18 pages

    Marketing Channels and Systems: (Cont'd.)

    Uploaded by

    zan tran
    The document discusses different types of marketing channel systems: [1] Vertical marketing systems where manufacturers, wholesalers, and retailers act as a unified system to improve efficiency and profits. This includes corporate, administered, and contractual systems.] [2] Horizontal marketing systems where companies at the same level join together to pursue new opportunities, like Coca-Cola and Nestle's joint venture for ready-to-drink coffee and tea. [3] Multi-channel systems allow companies to use multiple channels to reach different customer segments.

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    of 18

    MARKETING

    CHANNELS and
    SYSTEMS
    (cont’d.)
    MARKETING CHANNEL SYSTEMS

     VERTICAL CHANNEL SYSTEM

     HORIZONTAL CHANNEL SYSTEM

     MULTI-CHANNEL SYSTEM
    MARKETING CHANNEL SYSTEMS
     VERTICAL MARKETING SYSTEMS
     A system where the manufacturers,
    wholesalers, and retailers act as a unified
    system to avoid conflicts
     Improves operating efficiency and
    marketing effectiveness while maximizing
    profits
     One channel member owns the others, or
    has contracts with them, or uses so much
    power and influence that all other channel
    members cooperate.
    MARKETING CHANNEL SYSTEMS
    VERTICAL MARKETING SYSTEMS (VMS)
     CORPORATE VMS
     Combines successive stages of production
    and distribution under one single
    ownership
     A firm at one level of the channel owns the
    companies at the next level or owns the
    entire distribution channel system.
     Examples:
     Nike, Adidas, Bench, Penshoppe,
    Lacoste, Goodyear, Bridgestone, Singer,
    Ford, BMW, Mercedes Benz
    VERTICAL MARKETING SYSTEMS (VMS)
     ADMINISTERED VMS
     One member of the system is large and
    powerful enough to coordinate the
    activities of other members without any
    ownership issues.
     Seeks to control successive stages of
    production to distribution not through
    ownership, but through the size and power
    of the manufacturer
     Willing cooperation and compliance from
    other channel members
    VERTICAL MARKETING SYSTEMS (VMS)
     ADMINISTERED VMS
     Brand leaders are able to obtain trade
    cooperation
     Examples:
     Proctor and Gamble, Sony, Nestle, Coca-
    Cola, Kodak, Purefoods, San Miguel
    Beer, etc. are able to get preferred and
    strategic shelf space in stores, get
    ample promotional support, and
    support for price policies since their
    brands are market leaders.
    VERTICAL MARKETING SYSTEMS (VMS)

     CONTRACTUAL VMS
     Independent producers, wholesalers, and
    retailers operate under contracts
    specifying how they will try to improve the
    effectiveness and efficiency of their
    distribution.
     Also referred to as “value-added
    partnership”
    VERTICAL MARKETING SYSTEMS (VMS)
     CONTRACTUAL VMS
     Could take the forms of:
     Wholesaler-sponsored voluntary chains
     Coca-cola Bottlers, Phils.
     Retailer cooperatives
    o where retailers organize a new; or
    o Jointly-owned business to carry on
    wholesaling and possibly production
    VERTICAL MARKETING SYSTEMS (VMS)
     CONTRACTUAL VMS
     Could take the forms of:
     Franchise organizations
     are contractual marketing systems in
    which a channel member, called a
    FRANCHISER, links several stages in
    the production – distribution
    process, with the use of FRANCHISEE
    VERTICAL MARKETING SYSTEMS (VMS)
    3 forms of Franchise Systems
    1. MANUFACTURER-SPONSORED RETAILER F.S.
     The retailers/dealers are independent
    groups who get sponsored by the
    manufacturer
     Example:
     Toyota
     Mitsubishi
     Yamaha
     Honda
    VERTICAL MARKETING SYSTEMS (VMS)
    3 forms of Franchise Systems
    2. MANUFACTURER-SPONSORED WHOLESALER
     Coca-cola licenses bottlers (wholesalers) in
    various markets who buy Coca-cola syrup
    concentrate and then carbonate, bottle,
    and sell the finished product to retailers in
    the local market.
    VERTICAL MARKETING SYSTEMS (VMS)
    3 forms of Franchise Systems
    3. SERVICE FIRM-SPONSORED RETAILER
     A service-based company licenses the
    retailers to bring its services and/or goods
    to their target customers.
     Examples:
     Jollibee, McDonald’s, Burger King, etc.
     Ricky Reyes Salon
     Petron, Shell, Phoenix, PPT, etc.
    ADVANTAGES OF VERTICAL
    MARKETING SYSTEMS
     HIGH EFFICIENCY IN OPERATIONS

     EACH LAYER HAS CLEARLY-DEFINED


    FUNCTIONS AND RESPONSIBILITIES

     CLOSE MONITORING AND CONTROL


    MARKETING CHANNEL SYSTEMS
     HORIZONTAL MARKETING SYSTEMS
     A system where two or more companies at
    one level join together to follow a new
    marketing opportunity.
     The major benefit is that companies
    combine their capital, production
    capabilities, marketing resources
     Example:
     Coca-cola and Nestle formed a joint
    venture to market worldwide ready-to-
    drink coffee and tea
    ADVANTAGES OF HORIZONTAL
    MARKETING SYSTEMS
     GREATER SATISFACTION DUE TO
    GREATER FREEDOM AND AUTONOMY

     PROVIDES STREAMLINING DUE TO


    ABSENCE OF MULTIPLE STRUCTURED
    LAYERS

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