Transcript Chapter 13
Chapter 13 Marketing Channels The Place Component of the Marketing Mix: Channels of Distribution Logistics Materials Management Physical Distribution Marketing Channels A set of interdependent organizations that facilitate the transfer of ownership as products move from producer to business user or consumer Marketing Channel Functions Specialization and division of labor Overcoming discrepancies Providing contact efficiency Overcoming Discrepancies Discrepancy of Quantity The difference between the amount of product produced and the amount an end user wants to buy. Discrepancy of Assortment The lack of all the items a customer needs to receive full satisfaction from a product or products. Providing Contact Efficiency Channel members - Intermediaries Retailers – Organizations whose activities are directed toward sales to final (ultimate) consumers Wholesalers – Organizations that sell to retailers or other wholesalers, and/or to businesses or institutions for use in the conduct of business Channel Intermediaries Retailers Take Title to Goods Merchant Wholesalers Take Title to Goods Agents and Brokers Do NOT Take Title to Goods Factors Suggesting Type of Wholesaling Intermediary to Use Product characteristics Buyer considerations Market characteristics Channels for Consumer Products Direct Channel Retailer Channel Wholesaler Channel Producer Producer Producer Agent/Broker Channel Producer Agents or Brokers Consumers Wholesalers Wholesalers Retailers Retailers Retailers Consumers Consumers Consumers Channels for Business Products Direct Channel Direct Channel Producer Producer Industrial Agent/Broker Agent/Broker Distributor Channel Industrial Channel Producer Producer Producer Agents or Brokers Agents or Brokers Industrial Distributor Industrial Distributor Industrial User Govt. Buyer Industrial User Industrial User Industrial User Alternative Channel Arrangements Multiple channels Nontraditional channels Strategic channel alliances Benefits of Supply Chain Management Means of differentiation Reduced costs Greater supply chain flexibility Improved customer service Higher revenues Channel Strategy Decisions Factors Affecting Channel Choice Level of Distribution Intensity Market Factors Intensive Distribution Product Factors Selective Distribution Producer Factors Exclusive Distribution Market Factors Customer profiles Consumer or Industrial Customer Market Factors That Affect Channel Choices Size of market Geographic location Product Factors Product Complexity Product Price Product Standardization Product Factors That Affect Channel Choices Product Life Cycle Product Delicacy Producer Factors Producer Resources Number of Product Lines Producer Factors That Affect Channel Choices Desire for Channel Control Levels of Distribution Intensity Intensive A form of distribution aimed at having a product available in every outlet Selective A form of distribution achieved by screening dealers to eliminate all but a few in any single area Exclusive A form of distribution that established one or a few dealers within a given area Channel Leadership, Conflict, & Partnering Channel Power, Control, Leadership Channel Partnering Channel Relationship Synergy Channel Conflict Horizontal Vertical