I. Channel-Structure Strategy Definition: Using perspectives of intermediaries in the flow of goods from manufacturers to customers. Distribution may be either direct (from manufacturer to retailer or from manufacturer to customer) or indirect (involving the use of one or more intermediaries, such as wholesalers or agents, to reach the customer). Objective: To reach the optimal number of customers in a timely manner at the lowest possible cost while maintaining the desired degree of control. Requirements: Comparison of direct versus indirect distribution on the basis of (a) cost, (b) product characteristics, (c) degree of control, and (d) other factors. Costs: (a) Distribution costs. (b) Opportunity costs incurred because product not available. (c) Inventory holding and shipping costs. Product Characteristics: (a) Replacement rate. (b) Gross margin. (c) Service requirements. (d) Search time. Degree of Control: Greater when direct distribution used. Other Factors: (a) Adaptability. (b) Technological changes (e.g., computer technology). (c) Social/cultural values. Expected Results: (a) Direct distribution: (i) high marketing costs, (ii) large degree of control, (iii) informed customers, and (iv) strong image. (b) Indirect distribution: (i) lower marketing costs, (ii) less control, and (iii) reduced channel management responsibilities.

II. Distribution-Scope Strategy Definition: Establishing the scope of distribution, that is, the target customers. Choices are exclusive distribution (one retailer is granted sole rights in serving a given area), intensive distribution (a product is made available at all possible retail outlets), and selective distribution (many but not all retail outlets in a given area distribute a product). Objective: To serve chosen markets at a minimal cost while maintaining desired product image. Requirements: Assessment of (a) customer buying habits, (b) gross margin/ turnover rate, (c) capability of dealer to provide service, (d) capability of dealer to carry full product line, and (e) product styling. Expected Results: (a) Exclusive distribution: (i) strong dealer loyalty, (ii) high degree of control, (iii) good forecasting capability, (iv) sales promotion assistance from manufacturer, (v) possible loss in sales volume, and (vi) possible antitrust violation. (b) Selective distribution: (i) extreme competition in marketplace, (ii) price discounting, and (iii) pressure from channel members to reduce number of outlets. (c) Intensive distribution: (i) low degree of control, (ii) higher sales volume, (iii) wide customer recognition, (iv) high turnover, and (v) price discounting.

III. Multiple-Channel Strategy Definition: Employing two or more different channels for distribution of goods and services. Multiple-channel distribution is of two basic types: complementary (each channel handles a different noncompeting product or market segment) and competitive (two different and competing channels sell the same product). Objective: To achieve optimal access to each individual market segment to increase business. Complementary channels are used to reach market segments otherwise left unserved; competitive channels are used with the hope of increasing sales. Requirements: (a) Market segmentation. (b) Cost/benefit analysis. Use of complementary channels prompted by (i) geographic considerations, (ii) volume of business, (iii) need to distribute noncompeting items, and (iv) saturation of traditional distribution channels. Use of competitive channels can be a response to environmental changes. Expected Results: (a) Different services, prices, and support provided to different segments. (b) Broader market base. (c) Increased sales. (d) Possible dealer resentment. (e) Control problems. (f) Possible over-extension. Over-extension can result in (i) decrease in quality/service and (ii) negative effects on long-run profitability.

IV. Channel-Modification Strategy Definition: Introducing a change in the existing distribution arrangements on the basis of evaluation and critical review. Objective: To maintain an optimal distribution system given a changing environment. Requirements: (a) Evaluation of internal/external environmental shifts: (i) changes in consumer markets and buying habits, (ii) changes in the retail life cycle, (iii) changes in the manufacturer’s financial strength, and (iv) changes in the product life cycle. (b) Continuous evaluation of existing channels. (c) Cost/benefit analysis. (d) Consideration of the effect of the modified channels on other aspects of the marketing mix. (e) Ability of management to adapt to modified plan. Expected Results: (a) Maintenance of an optimal distribution system given environmental changes. (b) Disgruntled dealers and customers (in the short run).

V. Channel-Control Strategy Definition: Takeover by a member of the channel structure in order to establish control of the channel and provide a centrally organized effort to achieve common goals. Objectives: (a) To increase control. (b) To correct inefficiencies. (c) To realize costeffectiveness through experience curves. (d) To gain efficiencies of scale. Requirements: Commitment and resources to fulfill leadership obligations. Typically, though not always, the channel controller is a large firm with market leadership/influence. Expected Results (Vertical Marketing System): (a) Increased control. (b) Professional management. (c) Central programming. (d) Achievement of operating economies. (e) Maximum market impact. (f) Increased profitability. (g) Elimination of inefficiencies.

VI. Conflict-Management Strategy Definition: Resolving conflict among channel members. Objective: To devise a solution acceptable to the conflicting members so that they will cooperate to make it work. Requirements: Choice of a strategy for solving the conflict. (a) Bargaining: (i) both parties adopt give-and-take attitude and (ii) bottom line is favorable enough to both parties to induce them to accept the terms of the bargain. (b) Boundary: (i) nomination of an employee to act as diplomat, (ii) diplomat is fully briefed on the situation and provided with leverages with which to negotiate, and (iii) both parties are willing to negotiate. (c) Interpenetration: (i) frequent formal interactions with the other party to develop an appreciation of each other’s perspectives and (ii) willingness to interact to solve problems. (d) Superorganizational: A neutral third party is brought into the conflict to resolve the matter by means of (i) conciliation, (ii) mediation, or (iii) arbitration (compulsory or voluntary). Expected Results: (a) Elimination of snags in the channel. (b) Results that are mutually beneficial to the parties involved. (c) Need for management time and effort. (d) Increased costs. (e) Costs incurred by both parties in the form of concessions.

Promotion Strategies Promotion strategies are concerned with the planning, implementation, and control of persuasive communication with customers. These strategies may be designed around advertising, personal selling, sales promotion, or any combination of these. The first strategic issue involved here is how much money may be spent on the promotion of a specific product/market. The distribution of the total promotional budget among advertising, personal selling, and sales promotion is another strategic matter. The formulation of strategies dealing with these two issues determines the role that each type of promotion plays in a particular situation. Clear-cut objectives and a sharp focus on target customers are necessary for an effective promotional program. In other words, merely undertaking an advertising campaign or hiring a few salespeople to call on customers may not suffice. Rather, an integrated communication plan consisting of various promotion methods should be designed to ensure that customers in a product/market cluster get the right message and maintain a long-term cordial relationship with the company. Promotional perspectives must also be properly matched with product, price, and distribution perspectives. In addition to the strategic issues mentioned above, this article discusses strategies in advertising and personal selling. The advertising strategies examined are media strategy and copy strategy. Strategic matters explored in the area of personal selling are those concerned with designing a selling program and supervising salespeople. The formulation of each strategy is illustrated with reference to examples from the literature.