Industrial Marketing

Chapter 12 : Channel Structure and Dynamics

+Introduction to Channel Structures

+Channel Design

+Channel Intermediaries and their Functions

+Types of Channel Intermediaries

+Criteria for Selecting Channel Intermediaries

 Managing Channel Relationships

+Channel Conflicts and their Management

Chapter Summary

Though some industrial products do not require any intermediaries, other goods and services need intermediaries for marketing them to the customers. The design of marketing channels is a systematic process that takes into account channel objectives and goals, environmental constraints, and the cost of various channel structures that differ in terms of channel length and channel intensity.

The industrial intermediaries play a vital role in helping the marketers to sell their products to the customers and on the other side, help the customers in choosing the best products for their requirements. They help the supplier by providing the information, stocking inventory, etc. They also serve the industrial customer by providing transportation and delivery services, financing the sale, value addition, etc.

In this chapter, we also studied the various types of intermediaries available in the industrial market. Intermediaries can be divided into six broad categories – merchant intermediaries, manufacturer’s wholesalers, agent intermediaries, brokers, value added resellers (VARs), and market makers.

The criteria for selecting an intermediary are - product line coverage, after-sales service, pricing strategy, sales, size, experience of the intermediary, and risks involved in selecting the intermediary. Another main topic discussed in this chapter is conflicts in the channel. Channel conflicts arise due to many factors like goal incompatibility, clash over domains, and performance of channel functions.

Conflicts may be either pre-contractual or post-contractual. Conflicts may occur within and between different levels of a channel, or between two parallel channels. Channel conflicts can be solved by applying various strategies like negotiation and bargaining, persuasion mechanisms, problem-solving strategies, political strategies, and cooptation.

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