COSTS OF MARKETING CHANNELS FLOWS: BUSINESS CASES APPLYING A CHANNEL VALUE CAPTURE ANALYSIS TOOL

ABSTRACT

Distribution channels are a union of independent organizations involved in the process of making available products and services to consumers. In this process, members of a channel perform marketing flows like storage, promotion, service, negotiation, financing, risk, information, order and payment. The channel members like producers, intermediates and consumers fall within costs to perform these marketing flows. The purpose of this paper is to show and apply a system for distribution channels value capture analysis, based in the marketing flows performance. This was done after a literature review and the study of some models, theories and systems that take into consideration aspects of marketing flows performance and added value as a service output determinant, and contemplates the following steps: 1. weighted marketing flows scores and division of members activities to calculate the normative channel profit share; 2. channel members costs and margins surveys to calculate the real channel profit share and compare to normative profit share; and 3. results analysis and managerial implications for planning and management of marketing channels. The tool was applied on two companies of two different industries, one in the animal feed and the other in the dairy industry, focusing channels structured for selling to retailers. It was possible verify some advantages and limitations of the system as a tool for analyzing and planning marketing channels. In this way, the research outcomes are a channel analysis and evaluation system that could be applied for any company that pursue a conventional channel system, with necessary adaptations to companies or market segment specificities.

KEYWORDS:
Distribution channel; Marketing flows; Channel value capture; Channel costs; Distribution efficiency