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Colgate Toothpaste Practicum #5 Bus 306 Spring 2014 . By Patrick Sasaki Bret Russell Sean Curtis Michael Isom. Colgate Commercial. 3:38-4:25. Chapter 12: Marketing Channels -Delivering Customer Value.

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Colgate toothpaste practicum 5 bus 306 spring 2014

Colgate Toothpaste

Practicum #5

Bus 306 Spring 2014


Patrick Sasaki

Bret Russell

Sean Curtis

Michael Isom

Colgate commercial

Colgate Commercial


Chapter 12 marketing channels delivering customer value

Chapter 12: Marketing Channels

-Delivering Customer Value

Chapter Objectives

-Objective 1: Marketing Channel uses and their Functions.

-Objective 2: Behavior and Organization of Market Channels.

-Objective 3: Distribution Channel Decisions.

-Objective 4: Channel Management and Distribution.

-Objective 5: Logistics and Supply Chain Management

Supply chains

Supply Chains

-Supply Chains

-Consists of upstream and downstream partners.

-Downstream partners are distribution channels such as retailers and


-Distribution Channels

-Marketing channels directly affect every marketing decision.

Colgate distribution relations

Colgate Distribution Relations

-Colgate’s prices are affected by its supplier type.

-Their new products must be able to adhere to channel partner operations.

-Colgate’s sales decisions are based on its downstream channels.

Number layers of channel levels

Number/Layers of Channel Levels

-Channel Levels

- Three types of channel levels.

-Channel 1 (Direct Marketing Channel)

-Company sells directly to consumers.

-Channel 2 (Indirect Marketing Channel)

-Company uses only one distribution channel.

-Channel 3 (Indirect Marketing Channel)

- Company uses more than one marketing channel.

Channel levels channel 1 channel 2 channel 3

Channel Levels

Channel 1 Channel 2 Channel 3

Number of Levels













Colgate s distribution model

Colgate's Distribution Model

Channel behavior and organization

Channel Behavior and Organization...

-Channel Behavior

-Channel partners rely on one another for maximum efficiency and

profit. If disagreements occur, channel conflict arises.

-Horizontal and Vertical Conflicts

-Horizontal, is conflict between same channel levels.

-Vertical, is conflict between different channel levels.

Channel behavior and organization1

Channel Behavior and Organization...

-Vertical Systems

- A vertical system: Has channel leadership and includes producers, wholesalers, and - retailers. Types of VMS- Corporate VMS: Ownership. Contractual VMS: Contracts. - Administered VMS: Power.

- Horizontal Systems

- A horizontal system is when two channels of the same level join

together to create a better marketing opportunity.

Vertical marketing system horizontal marketing system

Vertical Marketing System Horizontal Marketing System

Channel behavior and organization2

Channel Behavior and Organization...



- Organizations create multiple

distribution channels to reach

various segments.

-Changing Channel


-A changing world filled with

advanced technology calls for

different distribution measures.

Multi-Channel Distribution

Distribution channel decisions

Distribution Channel Decisions

-Analyzing Customer Needs

-Each channel level must be selected carefully, each level adds value to the


-Setting Channel Objectives

-A company must figure out which channels work best for each segment.

-Identifying and Evaluating Alternatives

-Marketing Channels vary in types, numbers, and responsibilities.

-International Distribution Channels

-International intermediaries face complex and challenging issues.

Colgate s distribution decisions

Colgate’s Distribution Decisions

-Colgate implements Intensive

Distribution: As many as outlets as

possible (Trunick, 2011)

-Colgate’s International Distribution

Channels consist of One Central

Distributor for the entire region(Trunick, 2011)

Channel management decisions

Channel Management Decisions

-Selecting, Managing, and Evaluating

Distribution Members.

-Distribution Policy

-Exclusive distribution is when a company allows only a certain outlets to carry its


-Exclusive dealing is when a company requires a channel to not handle its

competitor’s products.

Logistics and supply chain management

Logistics and Supply Chain Management

-Importance and Goals of Logistics



-Inventory Management



-Integration of Logistics

-Involves teamwork, building relationships, and third-parties.

Colgate s logistics success

Colgate’s Logistics Success

-Transportation- 65 Ocean Containers, 3800 Truck Loads per week. (“Colgate palmolive,”)

- Negotiated Global Tender Agreement allowing cheaper shipping overseas (Colgate palmolive,”)

-Green Logistics-Colgate cut 1.8 million miles of line haul from its system, which equates to 300,000 gallons of diesel and 3,000 tons of carbon emissions (“Colgate palmolive,”)

- Integrated -Third Party Logistics- Outsourced Logistics to Imperial Logistics Co. (“Imperial logistics, 2014)

What we learned

What we Learned

Michael- The importance of marketing channels and the roles that they play. Also the different levels there are and how they work.

Patrick-The amount of time and effort it takes a product to go from raw material to end user. The intricate design of a supply/distribution chain and the importance of each decision.

Bret- I found it intriguing that third-party logistics can play an such important role in distribution marketing. As it is affects every other decision.

Sean- The internet has produced a lot of channel conflict and disintermediation for companies.



-Imperial Logistics. (2014, January 30). Imperial wins Colgate-Palmolive contract. Retrieved April 3, 2014,


-Marketing (15th th ed., p-Kotler, P., & Armstrong, G. (2014). Principles op. 191-216). Upper Saddle

River, NJ: Pearson.

-Francis, A. (2010, September 23). Concept of distributing channels in marketing. In MBA Knowledge.

Retrieved April 3, 2014,


-Trunick, P. (2011). Colgate logistics delivers smiles. Retrieved from

-Colgate palmolive. (n.d.). Retrieved from Palmolive

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