Kellogg on Marketing, 3rd Edition

CHAPTER 17Strategic Channel Management

Julie Hennessy and Jim Lecinski

This chapter provides an introduction to the important and dynamic field of marketing channels. Channels of distribution play a crucial role in value creation for both firms and customers. While target selection and positioning are initial centerpieces of a marketing strategy, market execution must also be thoughtfully, strategically grounded. Therefore, it is critical to think carefully about each piece of execution—product and service design, branding approaches, revenue capture, and the best way for your product to reach your customer.

In this chapter on strategic channel management, we will introduce you to the foundational concepts of the discipline. We will define exactly what we mean by channels of distribution, and explore how the addition of channel partners often increases the size and value of a market for a product. We will explore how two models, the survey of customer service output demands and the channel map, help marketers match the needs of their target customers with the channel structures they design for a business.

Next, we'll get to know two of the most frequently encountered channel partners as we explore the world of retailers and the roles played by wholesalers and distributors. We will gain a perspective on how retailers add value by providing a showcase for customer contact with brands. We will also explore the less visible and less understood worlds of wholesalers and distributors, ...