The main differences are emphasized between direct, indirect, and hybrid channels, including how channel length applies to firm decision-making and planning. Importantly, why multiple channels of distribution are usually relied upon by companies today is thoroughly explained. Why some firms implement franchising systems and others align with independent distributors and retailers is focused upon. A key emphasis of the chapter is on channel functions and how they contribute to purchases of products and services from targeted end-customers. The importance of distribution intensity and channel contracts is also emphasized. Finally, what omni-channels involve and why they are rapidly gaining in stature currently, especially among retail firms, is underlined.

What channel partnerships represent is initially focused upon. To reinforce the meaning even more, three different types of indirect channel relationships are identified, including arm’s-length relationships, strong inter-firm relationships, and partnerships. Emphasis is given to key features of strong channel relationships, which can evolve into partnerships. Then, the major determinants of channel partnerships are covered. Why building and maintaining trust is so important to effective channel partnerships concludes the chapter.

First of all, the three FTC guidelines for distinguishing franchising from other forms of business are given. This is followed by a discussion of the major differences between the two forms of franchising: business format franchising and product trade name franchising. Key characteristics of successful business format franchising systems are presented, followed by an outline of the major determinants of business format franchising. Finally, an evaluation is made of the main goal behind the establishment of product trade name franchising by companies.

The definition of being a distributor is given, followed by clarifying the major types of distributors that exist. An analysis is then conducted of how independent distributors can add value to products and services. The definition of a retailer is provided next and its major types are elaborated upon. An explanation is made of why many retailers implement multiple pathways to serve customers and why establishing omni-channels thereafter is alluring. The main goal of the chapter is to clarify why many suppliers rely on distributors and retailers in B2C, and distributors in B2B.

What the distribution intensity decision entails, including both offline and online channels, is initially presented. Then, the three strategic options of distribution intensity are elaborated upon. The classic category of goods model is described, helping to give some clue as to why each of the three strategic options would be implemented by firms under certain conditions. Then, an assessment is made of the significance of other factors that could impact the level of distribution intensity for products and services. The downsides of excessive distribution intensity are elaborated upon. The interactions between targeted end-customers shopping in online and offline channels concludes the chapter.

This introductory chapter is intended to “set the table” so to speak for the rest of the textbook. Marketing is defined as an academic discipline. The critical importance is emphasized of market segmentation and target market selection to the firm. Importantly, a new model of marketing strategy is proposed that attempts to tie everything together. As defined, marketing is critical for every firm, including distributors and retailers. Channels of distribution are described. A discussion is given on how channels help connect the firm to targeted end-customers. In addition, how channels of distribution relate to brand equity and the pricing of goods is stressed. Finally, the critical importance of the pull and push strategy is highlighted, pertaining to how this plan improves the functioning of every marketing channel of the firm.

The importance is stressed of understanding the definition of channel contracts and associated common terms. An argument is made that channel contracts are necessary in every inter-firm channel relationship. The steps taken to formulate channel contracts are presented, followed by a discussion of why alteration of contracts is often required. It is acknowledged why serious contract violations must be dealt with swiftly and effectively. The implications of major laws that apply to channel conduct are evaluated.

What conflict means as a construct is discussed. Acknowledgment is made of the main stages in the conflict process, within and between channel organizations. An analysis is undertaken of the major causes of conflict, within both direct channels and indirect channels, and how they can be reduced in magnitude. Consideration is given to how contract enforcement efforts and conflict are interconnected. It is emphasized that conflict can have both functional and dysfunctional effects, within and between organizations. An evaluation is made of how conflicts can be effectively resolved.

The major purpose of this chapter is to reduce the confusion that exists in the marketing discipline as to the meaning of power. Thus, channel power is first defined as a construct. The value of the supplier achieving major channel coordination objectives through power and its appropriate use cannot be overestimated. An explanation is given as to why sales manager power is critical in direct channels. Then, how firm power can be built in inter-firm relationships with distributors and retailers is explained. An evaluation is made of the strengths and weaknesses of channel coordinators applying supplier power through alternative communication strategies with intermediaries. Importantly, the factors leading to firm control of company salespeople and independent channel members are recognized. Finally, an analysis is made of how suppliers can effectively deal with powerful intermediaries.

A summary of the textbook is given. In order to do so with some ingenuity, ten commandments of channel organization and ten commandments of channel coordination are proposed, resting on major principles developed throughout the chapters. Important channel principles not covered in the commandments are then stated and reviewed. This discussion is intended to help people comprehend what the textbook was designed to accomplish. Hopefully, the textbook’s treatment of channel principles will be of value to everyone, aiding their knowledge of how effective channel organization and coordination contribute to company welfare.