Robert Palmatier has written the book on marketing channel strategy. Literally.
Palmatier, a professor of marketing and the John C. Narver Endowed Professor in Business Administration at the University of Washington Foster School of Business, is co-author of the eighth-edition of Marketing Channel Strategy, along with Louis Stern and Adel El-Ansary.
Marketing Channel Strategy is a comprehensive, research-based, action-oriented guide for practicing managers and managers-in-training with an interest in how to adopt and apply real-world channel strategies. This eighth edition of the book is structured to provide background knowledge and process steps for understanding, designing and implementing high-performance channel strategies.
Palmatier defines marketing channel strategy as a set of activities that work to design and manage a marketing channel that can enhance the firm’s sustainable competitive advantage and financial performance. “More simply,” he says, “companies and processes come together to bring products and services from their point of origin to their point of consumption. Through marketing channels, the originator of the products or services gains access to markets and end users. Channel structures and strategies thus are critical to any firm’s long-term success.”
The four major parts of Marketing Channel Strategy reflect some overriding themes.
Part I introduces the basic ideas and concepts underlying channel strategy. To help channel managers design a strategy and then manage it over time, Part I addresses some central channel questions: Why are marketing channels important? What is a marketing channel strategy? Who participates in a marketing channel? Why do marketing channels exist? What are the key functions performed by marketing channels?
The answers suggest that a marketing channel strategy entails three stages: (1) analyzing and designing, (2) benchmarking, and (3) implementation or management. Parts II–IV address each of these stages in turn.
Part II, Designing Channel Strategies, describes how to align the needs of upstream and downstream members of the channel to enable all the parties to work together to meet target end-users’ demands, at minimum cost. The authors start with a detailed discussion of how to employ an end-user analysis to segment markets, in accordance with end-users’ needs, and then select certain segment(s) to target (Chapter 2). Chapter 3 outlines methods for evaluating existing channels by auditing their efficiency and potential service or cost gaps. These two analysis steps lead into the task of determining whether to perform channel functions in-house or outsourced, so Chapter 4 describes the make-or-buy channel analysis. Finally, the authors summarize the design phase, as it appears with regard to three design questions: the degree of channel intensity, the mix of channel types, and the use of dual distribution (Chapter 5).
Part III, Channel Structure and Strategies, provides the means for channel managers to understand some of the most common channel structures and strategies: retailing (Chapter 6), wholesaling (Chapter 7), and franchising (Chapter 8). With such an understanding, managers can identify best practices to integrate into their new or revised channel systems, as well as compare their own channel structure and strategy with previously developed channel systems. This section thus provides lessons learned by previous channel managers, helps today’s readers avoid the same common mistakes, and allows them to take advantage of known channel efficiencies. Finally, Chapter 9 offers guidelines to help managers address and design creative, emerging channel structures and strategies, in accordance with constantly changing business environments.
Part IV, Implementing Channel Strategies, focuses on the five factors that lead to an optimal channel management and help ensure ongoing channel success. Specifically, channel managers need to identify and work with the source of each channel member’s power and dependence (Chapter 10), as well as recognize and avoid potential channel conflict (Chapter 11), so that they can build and maintain good working relationships among channel partners (Chapter 12). The last two chapters detail how to manage channel policies and legalities (Chapter 13) and logistics (Chapter 14), and thus maintain the effectiveness and efficiency of the channel system.
The framework presented in this book is useful for creating a new channel strategy in a previously untapped market, as well as for critically analyzing and refining a preexisting channel strategy.
“We have worked very hard in this eighth edition of Marketing Channel Strategy to offer practicing managers and business students action-oriented guidance on how to analyze, design, and implement effective channel strategies,” Palmatier says. “While the book is based on nearly 50 years of years of research, we tried to make the book very accessible to managers trying to apply our guidance to real-world sales channels”