Marketing Reading: Developing and Managing Channels of Distribution

By: V. Kasturi Rangan

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Synopsis: This Reading explores the multi-faceted nature of channels of distribution. The Reading provides guidelines for how producers of goods and services should cultivate, execute, and manage their go-to-market strategies. They can achieve success by implementing the notion of channel stewardship, and by applying its three main disciplines: mapping the industry channels, building & updating the channel value chain, and aligning & influencing the channel value chain. Managers are guided on whether to pursue direct and/or indirect channels of distribution. The author presents a seven-step framework for building the channel value chain. In aligning & influencing the channel system, students discover the importance of aligning the network of suppliers and intermediaries to address customer needs, and how participating members should be rewarded commensurate with their efforts. Hard and soft power as key influential levers are discussed, and students are also introduced to a four-step alignment process for programming a high-performance channel system. This discipline also involves managing horizontal channel conflict. The Reading closes with an eCommerce supplement, which discusses how online channel capabilities have caused varying degrees of disruption among certain product categories.