9th Edition
Marketing Channel Strategy An Omni-Channel Approach
Marketing Channel Strategy: An Omni-Channel Approach is the first book on the market to offer a completely unique, updated approach to channel marketing. Palmatier and Sivadas have adapted this classic text for the modern marketing reality by building a model that shows students how to engage customers across multiple marketing channels simultaneously and seamlessly.
The omni-channel is different from the multi-channel. It recognizes not only that customers access goods and services in multiple ways, but also that they are likely doing this at the same time; comparing prices on multiple websites, and seamlessly switching between mobile and desktop devices. With the strong theoretical foundation that users have come to expect, the book also offers lots of practical exercises and applications to help students understand how to design and implement omni-channel strategies in reality.
Advanced undergraduate and graduate students in marketing channels, distribution channels, B2B marketing, and retailing classes will enjoy acquiring the most cutting-edge marketing skills from this book.
A full set of PowerPoint slides accompany this new edition, to support instructors.
List of Tables, Figures, and Appendices
Preface
CHAPTER 1: The Omni-Channel Ecosystem
Learning Objectives
Introduction
What Is a Marketing Channel?
The Changing Channel Landscape
Marketing Channel Actors
Manufacturers: Upstream Channel Members
Intermediaries: Middle Channel Members
Wholesalers
Retail Intermediaries
Specialized Intermediaries
End-Users: Downstream Channel Members
Combinations of Channel Members
Online Channels
From a Multi-Channel to an Omni-Channel World
Distinction Between Multi-Channel and Omni-Channel Marketing Strategies: Trends Driving the Shift
Trend 1: Channel Participants Operate in a Connected World
Trend 2: Cross-Channel Shopping
Trend 3: Altered Shopping Norms
Trend 4: Moving into Services
Trend 5: Targeted Promotions and Customer Insights
Channel Strategy Framework
Take-Aways
CHAPTER 2: Channel Basics
Learning Objectives
Introduction
The Importance of Marketing Channel Strategies
Why Do Marketing Channels Exist?
Benefits for Downstream Channel Members
Search Facilitation
Sorting
Benefits to Upstream Channel Members
Routinization of Transactions
Fewer Contacts
The Key Functions Marketing Channels Perform
Channel Functions
Designing Channel Structures and Strategies
Auditing Marketing Channels
Auditing Channel Functions Using the Efficiency Template
Evaluating Channels: The Equity Principle
Evaluating Channels: Zero-Based Channel Concept
Auditing Channels Using Gap Analysis
Sources of Channel Gaps
Service Gaps
Cost Gaps
Combining Channel Gaps
Evaluating Channels: Gap Analysis Template
Make-or-Buy Channel Analysis
Auditing Omni-Channels
Take-Aways
CHAPTER 3: Channel Power
Learning Objectives
Introduction: The Nature of Marketing Channels
Power
Power as a Tool
The Five Sources of Channel Power
Reward Power
Coercive Power
Expert Power
Legitimate Power
Referent Power
Dependence as the Mirror Image of Power
Defining Dependence
Measuring Dependence
Utility and Scarcity
Percentage of Sales or Profits
Role Performance
Balancing Power: A Net Dependence Perspective
Imbalanced Dependence
Strategies for Balancing Dependence
Strategies for Tolerating Imbalanced Dependence
Power-Based Influence Strategies
Omni-Channels and Power
Take-Aways
CHAPTER 4: Channel Relationships
Learning Objectives
Introduction
Why Do Relationships Matter in Marketing Channels?
Upstream Motives for Building a Strong Channel Relationship
Downstream Motives for Building a Strong Channel Relationship
Building Channel Commitment
Need for Expectations of Continuity
Need for Reciprocation: Mutual Commitment
Strategies for Building Commitment
How Downstream Channel Members Commit
How Upstream Channel Members Commit
Building Channel Trust
Need for Economic Satisfaction
Strategies for Building Channel Partners’ Trust
Role of Noneconomic Factors
Decision-Making Processes
Overcoming Channel Distrust
Preventing Perceptions of Unfairness
The Channel Relationship Lifecycle
The Five Stages of a Channel Relationship
Managing the Stages
Managing Troubled Relationships
Relationship Portfolios
Relationship Quality
Multi-Channel Versus Omni-Channel Relationships
Take-Aways
CHAPTER 5: Channel Conflict
Learning Objectives
Introduction
The Nature of Channel Conflict
Types of Conflict
Measuring Conflict
Consequences of Conflict
Functional Conflict: Improving Channel Performance
Manifest Conflict: Reducing Channel Performance
Major Sources of Conflicts in Channels
Competing Goals
Differing Perceptions of Reality
Intrachannel Competition
Omni-Channels
Identifying Multi-Channel Conflicts
Managing Multiple Channels
Unwanted Channels: Gray Markets
Mitigating the Effects of Conflict in Balanced Relationships
Conflict Resolution Strategies
Forestalling Conflict through Institutionalization
Information-Intensive Mechanisms
Third-Party Mechanisms
Building Relational Norms
Using Incentives to Resolve Conflicts
Take-Aways
CHAPTER 6: Retailing Structures and Strategies
Learning Objectives
The Nature of Retailing
Classification of Retailers
Supermarkets
Warehouse Clubs
Department Stores
Specialty Stores
Full Line Discount Stores
Convenience and Drug Stores
The Retail Landscape
The Big Players
Modern Shifts and Challenges
Retail Positioning Strategies
Cost-Side Positioning Strategies
Demand-Side Positioning Strategies
Bulk-Breaking
Spatial Convenience
Waiting and Delivery Time
Product Variety
Customer Service
Retail Channels
Internet Retail Channels & E-Commerce
Direct Selling Channel
Hybrid Retail Channels
Retailer Power and Its Effects
Effect on Forward Buying
Effect on Slotting Allowance
Effect on Failure Fees
Effect on Private Branding
Retailing Structures and Strategies
Take-Aways
CHAPTER 7: Wholesaling Structure and Strategies
Learning Objectives
Introduction
What Is a Wholesaler?
How Are Wholesalers Different from Distributors?
The Wholesaler-Distributor Landscape
Master Distributors
Other Supply Chain Participants
Wholesaling Strategies
A Historical Perspective on Wholesaling Strategy
Wholesaling Value-Added Strategies
Alliance-Based Wholesaling Strategies
Wholesaler-Led Initiatives
Manufacturer-Led Initiatives
Retailer-Sponsored Cooperatives
Consolidation Strategies in Wholesaling
Adapting to Trends in Wholesaling
International Expansion
Omni-Channels
B2B Online Exchanges
Online Reverse Auctions
Fee for Services
Vertical Integration of Manufacturing into Wholesaling
Take-Aways
CHAPTER 8: Franchising Structure and Strategies
Learning Objectives
Franchising Formats
Product and Trade Name Franchising
Business Format Franchising
The Franchising Arrangement
Benefits of Franchising
To Franchisees
Start-Up Package
Ongoing Benefits
Competitive Advantages of Franchising
To Franchisors
Financial and Managerial Capital for Growth
Harnessing the Entrepreneurial Spirit
Reasons Not to Franchise
Franchising Strategies
Franchising Contracting Strategies
Payment Systems
Leasing
Termination
Contract Consistency
Contract Enforcement
Self-Enforcing Agreements
Company Store Strategies
Market Differences
Temporary Franchise and Company Outlets
Plural Forms and Synergies
Exploiting Franchises with Company Outlets
Adapting to Challenges in Franchising
Survival Trends
Maintaining a Cooperative Atmosphere
Managing Inherent Goal Conflict
Multi-Unit Franchising
Franchising and Omni-Channels
Take-Aways
CHAPTER 9: Channels and International Markets
Learning Objectives
Introduction
Key Middlemen in International Business
Export Management Companies
Export Trading Companies
Piggybacking
International Retailing
International Franchising
International Distribution Challenges
The Role of the Wholesaler
Marketing to the Base of the Pyramid
Defining the Market
Ethical Considerations at the BOP
Distribution to the BOP
Omni-Channel and Global Marketing
Take-Aways
CHAPTER 10: End-User Analysis: Segmenting and Targeting
Learning Objectives
Introduction: Understanding the Importance of Channel Segmentation
End-User Segmentation Criteria: Service Outputs
Bulk Breaking
Spatial Convenience
Waiting or Delivery Time
Product Variety and Assortment
Customer Service
Information Sharing
Segmenting End-Users by Service Output
Targeting End-User Segments
Omni-Channels and End-User Segments
Take-Aways
CHAPTER 11: Omni-Channel Strategy
Learning Objectives
Introduction
Key Challenges of the Omni-Channel Approach
The Four Pillars of an Omni-Channel Strategy
Harnessing Customer Knowledge
Leveraging Technology
Managing Channel Relationships
Assessing Channel Performance
Take-Aways
Index
Biography
Robert W. Palmatier is Professor of Marketing and John C. Narver Endowed Professor in Business Administration at the Foster School of Business, University of Washington, USA and the Research Director of the Sales and Marketing Strategy Institute.
Eugene Sivadas is Professor of Marketing and Associate Dean at the Milgard School of Business, University of Washington Tacoma, USA.
Louis W. Stern is John D. Gray Distinguished Professor Emeritus of Marketing at the Kellogg School of Management, Northwestern University, USA.
Adel I. El-Ansary is the Donna L. Harper Professor of Marketing at the University of North Florida, USA.
"Marketing Channel Strategy: An Omni-Channel Approach is fresh, insightful, and packed with information. The material is easy to read and digest and flows well. Readers will walk away with a clear understanding of the omni-channel ecosystem and how to build effective omni-channel strategies. The role and impact of omni-channels on each sector of the channel landscape is clearly laid out. The book is built on solid theoretical foundation but is very managerial at the same time." –Rajdeep Grewal, The Townsend Family Distinguished Professor and Area Chair, Marketing Editor-in-Chief, Journal of Marketing Research, Kenan-Flagler Business School, University of North Carolina-Chapel Hill, USA
"Marketing Channel Strategy: An Omni-Channel Approach is a very readable and updated take on a classic text. Omni-channels are growing in importance, and they fundamentally change the way firms go to market and connect with their customers. Unfortunately, however, there are few available frameworks to guide managerial decision-making in this area. This book draws on current academic research and industry practice to develop a compelling strategic framework that fills this void in the literature. The framework’s guiding principle is the idea of an omni-channel ‘ecosystem,’ and the authors apply it to a variety of different channel contexts, including wholesaling, franchising, and retailing. The book is packed with insights, and the authors do an excellent job of illustrating them with current examples." –Jan B. Heide, Michael Lehman Distinguished Chair in Business, Wisconsin School of Business, University of Wisconsin-Madison, USA
"This leading textbook on marketing channels is completely redone and offers a unique take on channel marketing management in the light of the present-day reality. Marketing Channel Strategy: An Omni-Channel Approach builds a model that shows students and practicing managers how to engage and make the customer experience seamless across multiple channels. I find the chapter on international channels and base of the pyramid particularly informative, pragmatic, and interesting. The book is modular and can be used in a variety of classes including retailing, international marketing, channels, e-marketing, and marketing strategy." –Constantine S. Katsikeas, Arnold Ziff Research Chair and Professor of Marketing and International Management, University of Leeds, UK
"Effective omni-channel management is a critical source of value and an important differential edge in the modern marketplace. Given the trends toward omni-channel ecosystems, it is key that managers and managers-in-training (i.e., students) focus more of their attention on channel management. This cutting-edge text can be a catalyst for renewed interest in channel management; it highlights the need for a greater focus on this element of the go-to-market marketing strategy." Dhruv Grewal, Toyota Chair of Commerce and Electronic Business and Professor of Marketing, Babson College, USA
"Marketing Channel Strategy: An Omni-Channel Approach blends theory with practice-oriented examples to clearly enunciate the difference between a multi-channel and omni-channel worldview. The examples and exercises make it easy for managers and students to grasp the challenges involved in developing effective omni-channel strategies. This book can be used as a stand-alone in a distribution or channel strategy class or modules can be used in a variety of marketing classes." –Robert Dahlstrom, Joseph Siebert Professor, Miami University, USA and Professor of Marketing, BI Norwegian Business School, Norway
