The Handbook of Marketing presents a major retrospective and prospective overview of the field of marketing, and provides a landmark reference at a time when many of the traditional boundaries and domains within the marketing discipline have been subject to change. The Handbook frames, assesses and synthesizes the work in the field and helps to define and shape its current and future development. It includes contributions from leading scholars in the field, and the input of an international and extremely distinguished advisory board of marketing academics. The Handbook of Marketing will be invaluable to advanced undergraduates, graduate students and academics in marketing.
Chapter 10: Channel Management: Structure, Governance, and Relationship Management
Channel Management: Structure, Governance, and Relationship Management
To go to market, producers of services and products create at least one channel of distribution, or path, through which they access a potential buyer, convert the prospect into a customer, and fulfill the orders the customer places. The importance of distribution channels can be seen in many industries in the US, where channel members collectively earn margins that account for 30 to 50% of the ultimate selling price. In contrast, advertising typically accounts for less than 5 to 7% of the final price (Stern & Weitz, 1997). The importance of the distribution function is not due solely to the accounting costs of the channel's activities. Marketing channels represent a substantial opportunity ...