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Overview

"This book is intended for an international audience of practicing and future managers. The subject is marketing channels, the companies that come together to bring products and services from their point of origin to the point of consumption. Marketing channels are the downstream part of a value chain. The originator of goods or services gains access to a market through marketing channels. Channels of distribution are a critical element of business strategy." "The ideas in this book apply to any channel for any product or service in any market. The generality of the book is shown in its many examples taken from all over the world. These cover a wealth of different products and services, sold to businesses and consumers, selected from the worldwide business press, research, and consulting. Examples range from autopsies, dog and cat food, personal computers, pleasure boats, and dolls, to stereo speakers, fast food, tires, garden products, and fast-moving consumer goods; and from maternity clothing, uninterruptible power supplies, and maintenance, repair, and operating (MRO) goods, to furniture, automobiles, airline travel services, and mutual funds. The variety of the examples reinforces the generality of the principles. As is appropriate for an international readership, the presentation of each example assumes that the reader is unfamiliar with the product or market in question. The book presents the concepts needed to frame the problem, then explores the channel issues in depth by means of the examples."--BOOK JACKET.
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Editorial Reviews

Booknews
Written for an international audience of practicing managers and students of management, this book looks at marketing channels, the links between production and consumption. Illustrating general principles with specific examples, the book discusses a variety of products and services sold to businesses and consumers around the world. The book presents the concepts needed to frame the problem, and then explores the channel issues by means of examples. Chapters focus on the analytic framework, channel design, implementation and performance measurement, and channel institutions. Annotation c. Book News, Inc., Portland, OR (booknews.com)
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Product Details

Meet the Author

Anne T. Coughlan

Anne Coughlan received her bachelor’s degree in Economics (Phi Beta Kappa, with Honors and Distinction, 1977) and her Ph.D. in Economics (1982) both from Stanford University.  From 1981 to 1985 she taught at the Graduate School of Business of the University of Rochester as an assistant professor of Economics and Marketing.  Since 1985 she has been on the Marketing faculty at the Kellogg School of Management at Northwestern University, where she is currently a tenured Associate Professor of Marketing.  She was a visiting Professor of Marketing at INSEAD, in Fontainebleau, France, during the 1997-98 school year.

 

Professor Coughlan’s teaching, research, and consulting interests lie in the areas of distribution channel management and design, pricing, competitive strategy, and the international applications of these areas.  She teaches courses in distribution channel management and design to the Kellogg students in the regular MBA program, the Executive Masters’ Program, and the International Executive MBA program.  She won Teacher of the Year awards for the best elective course in the Executive Masters’ Program at Kellogg in 1996 and 2003, and the Sidney J. Levy Teaching Award in 2000-2001.  She is a frequent lecturer in executive programs on distribution and pricing, both at Kellogg and around the world.  She has consulted and done executive education for various companies including Monsanto, Motorola, AT&T, Square D, Bulkmatic, The Tribune Company, GlaxoSmithkline,Roche, DJ Ortho, and J.M. Huber Engineered Materials.

 

Professor Coughlan is the lead author (with co-authors Erin Anderson, Louis W. Stern, and Adel I. El-Ansary) of Marketing Channels, 7th edition (Prentice-Hall, 2006), a leading textbook and reference work in the area of distribution channel design and management.  She has also written many scholarly research articles and her work has been published in journals such as Marketing Science, Management Science, International Journal of Research in Marketing, Journal of Business, and Journal of Marketing.

 

She has served as an Area Editor for Marketing Science and has served on the editorial boards of Journal of Marketing Research and Marketing Letters. She is currently an Associate Editor at Journal of Economics and Management Strategy and serves on the editorial board of Marketing Science.  She is a co-editor of the Quantitative Marketing Network of the Social Sciences Research Network.  Professor Coughlan was elected Secretary-Treasurer (1988-89) and President (1992-93) of the College on Marketing of The Institute for Management Sciences.

 

Professor Coughlan served on the Board of Trustees of The Kent Funds (a Michigan-based bank proprietary mutual fund family) from 1994-97 and has served since 1994 on the board of directors of The Care of Trees, a national tree care company in the United States.  She has been a member of the Advisory Board of Channel Velocity, a reverse logistics company, since September 2004.  She served on the Program Committee of the Japan-America Society of Chicago from 1992-1996.

 

Professor Coughlan is currently doing research on gray marketing, dual distribution in retailing, sales force compensation, direct selling organization management and compensation, brand equity investments in the grocery channel, and the optimal allocation of activities in multi-member distribution channels.

 

 

Erin Anderson

Erin Anderson is the John H. Loudon Chaired Professor of International Management and Professor of Marketing at INSEAD (The European Institute of Business Administration) in Fontainebleau, France, which she joined in 1994.

 

Her research focuses around the problems of motivating, structuring, and controlling sales forces and channels of distribution. She emphasizes issues related to vertical integration, including modes of foreign market entry. She takes a field-data approach to these issues, which she structures using a blend of institutional economics, macro-level organization theory, strategic management, and marketing directory.

 

Anderson has published articles, based primarily on original field research, in a number of journals, including the Journal of Marketing Research, Management Science, Marketing Science, Rand Journal of Economics, Journal of Economic Behavior and Organization, Journal of Law, Economics, and Organization, Organization Science, Journal of International Business, and the Sloan Management Review. In addition, she serves on the editorial boards of several journals, including Journal of Marketing, Journal of Marketing Research and International Journal of Research in Marketing. With Bob Trinkle, she has authored Outsourcing the Sales Function: The Real Cost of Field Sales, published by Thomson Texere Publishing.

 

Anderson has consulted or been involved in executive teaching for a range of industrial companies, including DuPont, Air Liquide, Lafarge, and Alcatel, as well as consumer goods companies such as Heuer Time and Electronics, Motorola Cellular Systems, and Phillips Lighting. She has lectured for executive audiences in England, France, Spain and Belgium as well as the United States and Canada.

 

Dr. Anderson received her PhD in Marketing in 1982 from the Anderson Graduate School of Management at the University of California, Los Angeles. Prior joining INSEAD, Anderson was Associate Professor of Marketing at the Wharton School of the University of Pennsylvania, where she had been a faculty member since 1981. Anderson has taught at the Catholic University of Mons, Belgium, and has been a visiting scholar at the European Institute for Advanced Studies in Management, Brussels.

 

 

Adel I. El-Ansary

Adel I. El-Ansary is the Donna L. Harper Professor of Marketing at the University of North Florida.  He is the recipient of the State of Florida University System Professional Excellence Award, 1999 and Prime Osborne III Distinguished Professor Award, 2000. Prior to joining the faculty at the University of North Florida as the First Holder of the Paper and Plastics Educational Research Foundation Eminent Scholar Chair in Wholesaling, he served as Professor and Chairman of Business Administration at the George Washington University, Washington, D.C.

 

El-Ansary is a Fulbright Scholar.  He is co-author of the leading text-reference books on E-Marketing, 3rd, and 4th edition, Prentice-Hall, 2003-206 and Marketing Channels, 1st through 7th edition, Prentice-Hall, 1977 - 2006.  He is also a contributor to the Encyclopedia of Marketing, Encyclopedia of Economics, American Marketing Association Marketing Encyclopedia, the Logistics Handbook, and over thirty-five books and conference proceedings.  El-Ansary’s research and writing contributed twenty key articles published in major journal including the Journal of Marketing, Journal of Marketing Research, Journal of Marketing Channels, Journal of Retailing, Journal of the Academy of Marketing Science, Journal of Macro Marketing, Journal of Relationship Marketing, Journal of Personal Selling and Sales Management, and European Business Review, International Marketing Review.

 

El-Ansary was privileged to serve on the National Advisory Board of U.S. Small Business Administration under Presidents Nixon and Ford, the Board of Director of the International Consultants Foundation, the Global Council of the American Marketing Association, Founder of the Special Interest Group in Wholesale Distribution and Co-Chairman of the Relationship Marketing Interest Group of the Academic Council of the American Marketing Association, and Member of the Board of Governors of the Academy of Marketing Science.     

 

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Read an Excerpt

PREFACE:

Preface

This book is intended for an international audience of practicing and future managers. It is written in English, the international language of business. The subject is marketing channels, the companies that come together to bring products and services from their point of origin to the point of consumption. Marketing channels are the downstream part of a value chain. The originator of goods or services gains access to a market through marketing channels. Channels of distribution are a critical element of business strategy.

The ideas in this book apply to any channel for any product or service in any market. The generality of the book is shown in its many examples taken from all over the world. These cover a wealth of different products and services, sold to businesses and consumers, selected from the worldwide business press, research, and consulting. Some examples are autopsies; dog and cat food; personal computers; pleasure boats; dolls; stereo speakers; fast food; tires; garden products; fast-moving consumer goods; maternity clothing; uninterruptible power supplies; maintenance, repair, and operating (MRO) goods; furniture; automobiles; airline travel services; and mutual funds. The variety of the list reinforces the generality of the principles. As is appropriate for an international readership, the presentation of each example is as though the reader is unfamiliar with the product or market in question. This book covers the highlights needed to frame the problem, then covers the channel issues in the examples. Channel Sketches provide detailed examples to improve the readability of the main text.

Eachchapter is designed to stand on its own. The chapters may be read in any order, and any chapter may be omitted. Each chapter is of a length that can be assigned for a single class or read in one sitting with a single issue in mind. The chapters are designed modularly. Essential definitions are repeated where necessary so that the reader is free to choose one chapter and defer or omit another. Reference is made to other chapters when appropriate for the reader to go further into any topic raised in the chapter at hand. In this way, the reader can select how deeply to delve into all the sections of the book that most closely fit the problem under consideration.

The content of each chapter comes from the best of current research and practice. This book covers a vast and varied literature, bringing in findings, practice, and viewpoints from multiple disciplines (marketing, strategy, economics, sociology, law, political science) and from the best practices of channel managers worldwide. In presenting these works, the focus is on framing the problem and its solution in the language of business rather than on the technical aspects of the research. Yet the book introduces technical vocabulary in the appropriate instances for the manager. The theory, data, and methods that underlie the content of this book are not detailed. Instead, the relevant references are liberally noted and tied to the content, so that the interested reader may delve further into specific points.

The text is organized into four parts. Part One, "Introduction and Analytic Framework for the Book," introduces the basic ideas and concepts underlying channel analysis. It explains why specialized institutions and agencies have emerged to assist in the task of making goods and services available for industrial, institutional, and household consumption. Among the more critical concepts introduced in Chapter 1 are the notions of "service outputs" and marketing "flows" on which the remainder of the book relies heavily. Chapter 2 provides a coherent framework for building, maintaining, and analyzing channel structure and function. It includes demand-side analysis, supplyside analysis of both channel flows and channel structures, the analysis of gaps on the demand and supply sides, and responses by channel managers concerning the creation or modification of channel structures to meet target segments' needs. It also emphasizes the importance of ongoing management and coordination of the channel through the use of channel power sources and the recognition and management of channel conflict. This framework unifies the discussion throughout the rest of the book and forms the basis for the book's approach to channel design and management.

Part Two, "Channel Design: Demand, Supply, and Channel Structure," develops the framework for channel creation or modification. Chapter 3 focuses on the demand side by discussing how to segment a market for the purposes of channel design appropriately, using the core concept of service output demands. Chapter 4 turns to the supply side of the channel, introducing the concept of channel flows to describe the work done by channel members. This chapter emphasizes the importance of distributing flow responsibilities to channel members who can perform them most efficiently. Not only is the allocation of flows important, so is the issue of channel structure. This is the topic of Chapter 5, which discusses the types of firms that can and should be included in the channel, how broadly distributed the channel's products should be, and who specifically should be a member of the channel. Chapter 6 brings together the demand and supply sides through a discussion of gap analysis, whereby gaps can exist on the demand side, the supply side, or both. Sources of gaps, types of gaps, and methods of closing channel gaps are all discussed. Chapter 7 discusses a key issue in channel structure: whether to vertically integrate the channel. This chapter covers the make-or-buy issue in channels, as well as the decision whether to adopt an intermediate solution. These options blend the features of make and of buy. The next part of the book covers how to create such a midrange solution.

Part Three "Channel Coordination and Implementation," discusses how to get all the members of a channel to work in concert with one another. Concerted or coordinated action does not happen naturally in a marketing channel. This part covers how to overcome this problem by crafting channels that function smoothly in pursuit of common goals. Power is the subject of Chapter 8, which examines how to obtain the potential for influence—and how to use it. Of course, channels are full of conflict, as discussed in Chapter 9. Here, the emphasis is on how to diagnose the true sources of conflict and how to direct conflict to use it as a constructive force for change. A fundamental issue underlying almost every attempt to coordinate a channel is how thoroughly a marketplace is covered (how many places a customer could buy a product or service). The intensity of distribution is related to vertical restraints (such as tying contracts and resale price maintenance) and to how many brands a channel member carries (the degree of exclusivity in dealing). These topics are the subject of Chapter 10. Power, conflict, and intensity of distribution all turn on how to influence channel members. The ultimate form of influence is to forge a strategic alliance in a channel, covered in Chapter 11. Because efforts to coordinate often run afoul of the law, the legal environment (Chapter 12) closes this part.

Part Four, "Channel Institutions," describes and evaluates the predominant institutional forms at each level of a marketing channel. The retailing level has a great variety of form: The major issues and challenges confronting them are discussed in Chapter 13. This chapter focuses on physical stores, which customers visit. Chapter 14 covers the rapidly growing nonstore alternatives, including electronic channels, catalogs, and direct selling. Further up in the value-added chain is the wholesaling sector, the subject of Chapter 15. A critical element of value added in marketing channels is logistics and sup-, ply chain management, the topic of Chapter 16. Finally, Chapter 17 deals with the fascinating, complex, and inherently contradictory channel institution of franchising, discussing how, when, and why franchising works.

The sixth edition differs from the fifth edition in its organization of material, but not in its philosophical underpinning. The framework for analysis is presented first, followed by institutionally oriented chapters, rather than the reverse, as in the fifth edition. The framework is also expanded over more chapters, each of which can be the focus of a single course session. The book is significantly internationalized throughout, reflecting the importance of channel management issues throughout the world. This edition also provides extensive coverage of the impact of electronic commerce on channel design and management, both in examples in each chapter and in the separate treatment of the issue in Chapter 14.

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Table of Contents

Ch. 1 Marketing channels : structure and functions 1
Ch. 2 Segmentation for marketing channel design : service outputs 40
Ch. 3 Supply side channel analysis : channel flows and efficiency analysis 72
Ch. 4 Supply-side channel analysis : channel structure and intensity 112
Ch. 5 Gap analysis 154
Ch. 6 Channel power : getting it, using it, keeping it 196
Ch. 7 Managing conflict to increase channel coordination 243
Ch. 8 Strategic alliances in distribution 289
Ch. 9 Vertical integration in distribution 330
Ch. 10 Legal constraints on marketing channel policies 377
Ch. 11 Retailing 425
Ch. 12 Wholesaling 484
Ch. 13 Franchising 518
Ch. 14 Logistics and supply chain management 560
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Preface

PREFACE:

Preface

This book is intended for an international audience of practicing and future managers. It is written in English, the international language of business. The subject is marketing channels, the companies that come together to bring products and services from their point of origin to the point of consumption. Marketing channels are the downstream part of a value chain. The originator of goods or services gains access to a market through marketing channels. Channels of distribution are a critical element of business strategy.

The ideas in this book apply to any channel for any product or service in any market. The generality of the book is shown in its many examples taken from all over the world. These cover a wealth of different products and services, sold to businesses and consumers, selected from the worldwide business press, research, and consulting. Some examples are autopsies; dog and cat food; personal computers; pleasure boats; dolls; stereo speakers; fast food; tires; garden products; fast-moving consumer goods; maternity clothing; uninterruptible power supplies; maintenance, repair, and operating (MRO) goods; furniture; automobiles; airline travel services; and mutual funds. The variety of the list reinforces the generality of the principles. As is appropriate for an international readership, the presentation of each example is as though the reader is unfamiliar with the product or market in question. This book covers the highlights needed to frame the problem, then covers the channel issues in the examples. Channel Sketches provide detailed examples to improve the readability of the main text.

Eachchapter is designed to stand on its own. The chapters may be read in any order, and any chapter may be omitted. Each chapter is of a length that can be assigned for a single class or read in one sitting with a single issue in mind. The chapters are designed modularly. Essential definitions are repeated where necessary so that the reader is free to choose one chapter and defer or omit another. Reference is made to other chapters when appropriate for the reader to go further into any topic raised in the chapter at hand. In this way, the reader can select how deeply to delve into all the sections of the book that most closely fit the problem under consideration.

The content of each chapter comes from the best of current research and practice. This book covers a vast and varied literature, bringing in findings, practice, and viewpoints from multiple disciplines (marketing, strategy, economics, sociology, law, political science) and from the best practices of channel managers worldwide. In presenting these works, the focus is on framing the problem and its solution in the language of business rather than on the technical aspects of the research. Yet the book introduces technical vocabulary in the appropriate instances for the manager. The theory, data, and methods that underlie the content of this book are not detailed. Instead, the relevant references are liberally noted and tied to the content, so that the interested reader may delve further into specific points.

The text is organized into four parts. Part One, "Introduction and Analytic Framework for the Book," introduces the basic ideas and concepts underlying channel analysis. It explains why specialized institutions and agencies have emerged to assist in the task of making goods and services available for industrial, institutional, and household consumption. Among the more critical concepts introduced in Chapter 1 are the notions of "service outputs" and marketing "flows" on which the remainder of the book relies heavily. Chapter 2 provides a coherent framework for building, maintaining, and analyzing channel structure and function. It includes demand-side analysis, supplyside analysis of both channel flows and channel structures, the analysis of gaps on the demand and supply sides, and responses by channel managers concerning the creation or modification of channel structures to meet target segments' needs. It also emphasizes the importance of ongoing management and coordination of the channel through the use of channel power sources and the recognition and management of channel conflict. This framework unifies the discussion throughout the rest of the book and forms the basis for the book's approach to channel design and management.

Part Two, "Channel Design: Demand, Supply, and Channel Structure," develops the framework for channel creation or modification. Chapter 3 focuses on the demand side by discussing how to segment a market for the purposes of channel design appropriately, using the core concept of service output demands. Chapter 4 turns to the supply side of the channel, introducing the concept of channel flows to describe the work done by channel members. This chapter emphasizes the importance of distributing flow responsibilities to channel members who can perform them most efficiently. Not only is the allocation of flows important, so is the issue of channel structure. This is the topic of Chapter 5, which discusses the types of firms that can and should be included in the channel, how broadly distributed the channel's products should be, and who specifically should be a member of the channel. Chapter 6 brings together the demand and supply sides through a discussion of gap analysis, whereby gaps can exist on the demand side, the supply side, or both. Sources of gaps, types of gaps, and methods of closing channel gaps are all discussed. Chapter 7 discusses a key issue in channel structure: whether to vertically integrate the channel. This chapter covers the make-or-buy issue in channels, as well as the decision whether to adopt an intermediate solution. These options blend the features of make and of buy. The next part of the book covers how to create such a midrange solution.

Part Three "Channel Coordination and Implementation," discusses how to get all the members of a channel to work in concert with one another. Concerted or coordinated action does not happen naturally in a marketing channel. This part covers how to overcome this problem by crafting channels that function smoothly in pursuit of common goals. Power is the subject of Chapter 8, which examines how to obtain the potential for influence—and how to use it. Of course, channels are full of conflict, as discussed in Chapter 9. Here, the emphasis is on how to diagnose the true sources of conflict and how to direct conflict to use it as a constructive force for change. A fundamental issue underlying almost every attempt to coordinate a channel is how thoroughly a marketplace is covered (how many places a customer could buy a product or service). The intensity of distribution is related to vertical restraints (such as tying contracts and resale price maintenance) and to how many brands a channel member carries (the degree of exclusivity in dealing). These topics are the subject of Chapter 10. Power, conflict, and intensity of distribution all turn on how to influence channel members. The ultimate form of influence is to forge a strategic alliance in a channel, covered in Chapter 11. Because efforts to coordinate often run afoul of the law, the legal environment (Chapter 12) closes this part.

Part Four, "Channel Institutions," describes and evaluates the predominant institutional forms at each level of a marketing channel. The retailing level has a great variety of form: The major issues and challenges confronting them are discussed in Chapter 13. This chapter focuses on physical stores, which customers visit. Chapter 14 covers the rapidly growing nonstore alternatives, including electronic channels, catalogs, and direct selling. Further up in the value-added chain is the wholesaling sector, the subject of Chapter 15. A critical element of value added in marketing channels is logistics and sup-, ply chain management, the topic of Chapter 16. Finally, Chapter 17 deals with the fascinating, complex, and inherently contradictory channel institution of franchising, discussing how, when, and why franchising works.

The sixth edition differs from the fifth edition in its organization of material, but not in its philosophical underpinning. The framework for analysis is presented first, followed by institutionally oriented chapters, rather than the reverse, as in the fifth edition. The framework is also expanded over more chapters, each of which can be the focus of a single course session. The book is significantly internationalized throughout, reflecting the importance of channel management issues throughout the world. This edition also provides extensive coverage of the impact of electronic commerce on channel design and management, both in examples in each chapter and in the separate treatment of the issue in Chapter 14.

Read More Show Less

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