[go: up one dir, main page]
Scribd
Upload
324 views11 pages

Channel Dynamics

A vertical marketing system is defined as a marketing channel where manufacturing and distribution stages are operated as a unified system, with control maintained through economic power, contracts, or corporate ownership. Examples given are Amul dairy products and Procter & Gamble. Potential causes of conflict within these systems include differences in goals around pricing, payment terms, shelf space allocation, exclusivity, order size, assortment, risk assumption, and branding between manufacturers and wholesalers/retailers.

Uploaded by

Richa Singhvi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
324 views11 pages

Channel Dynamics

A vertical marketing system is defined as a marketing channel where manufacturing and distribution stages are operated as a unified system, with control maintained through economic power, contracts, or corporate ownership. Examples given are Amul dairy products and Procter & Gamble. Potential causes of conflict within these systems include differences in goals around pricing, payment terms, shelf space allocation, exclusivity, order size, assortment, risk assumption, and branding between manufacturers and wholesalers/retailers.

Uploaded by

Richa Singhvi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 11

Vertical marketing system

A marketing channel in which manufacturing


and the successive stages of distribution are
operated as a unified system.

Vertical Marketing System

Control
maintained by:

Economic Power
Contract

Examples:

Amul dairy products


Proctor & gamble
products etc.

Administered
Contractual
Corporate

Vertical Marketing System


Administered
Contractual
Corporate

Control maintained
by:

Stock owned by wholesaler

Stock owned by retailers

Franchise system

Marketers of services

Examples:

Retail chain like Naaz in Delhi

Soft drink bottles

Vertical Marketing System


Administered
Contractual

Control maintained
by:

Ownership

Examples:

Singer (sewing machines)

Good year (tyers),


oil companies.

Corporate

HORIZONTAL MARKETING
In horizontal marketing system (HMS) two or more
organizations on the same level of distribution cooperate
to accomplish a common goal. This type of marketing
system recognizes that there is strength in numbers.

CHANNLE MANAGEMENT

Potential causes of channel


conflict

Factor :

Manufacturers Goal:

To establish final price consistent


with product image.

To ensure prompt, accurate


payments & minimize discount.

space

To obtain plentiful shelf space with


good visibility in order to maximize
brand sales.

Exclusivity

To hold down the no. of competing


brands. Each middleman stock
while selling through many
middleman.

Pricing
Purchase
Shelf

terms

Potential causes of channel


conflict

Factor :

Manufacturers Goal:

To receive adequate notice before


delivers are required.

To secure advertising support from


middleman.

Profitability

To maintain adequate profit margins.

Continuity

To receive order on a regular basis.

Order

To maximize order size.

To standardize production.

To have middleman assume risks.

To sell products under the


manufactures lable.

Delivery
Advertising

size
Assortment
Risk
Branding

support

Potential causes of channel


conflict

Factor :

Wholesalers/Retailers

Goal:

To establish final price consistent


with wholesalers/retailers image.

To defer payments as long as


possible & secure discounts.

space

To allocate shelf space among many


brands in order to maxi. Total
product sales.

Exclusivity

To hold down the no. of competing


wholesalers/retailers carrying the
same brands while selling different
brands itself.

Pricing
Purchase
Shelf

terms

Potential causes of channel


conflict

Wholesalers/Retailers Goal:

Factor :

To obtain quick service.

To secure advertising support from


manufacturers.

Profitability

To maintain adequate profit margins.

Continuity

To receive shipments on a regular basis.

Order

To have order size conform with


consumer demand to minimize
inventory investment.

Assortment

To secure a full variety.

Risk

To have manufacturers assume risks.

Branding

To sell products under dealer labels as


well as manufacturer label.

Delivery
Advertising

size

support

You might also like