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Marketing Channel (channel of distribution)
set of interdependent orgs that eases the transfer of ownership as products move from producer to biz user or consumer
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Channel Members
all parties in the mktg channel who negotiate with one another, buy and sell products, and facilitate the change of ownership b/w buyer and seller in teh course of moving the product from the manufacturer into the hands of the final consumer
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Discrepancy of Quantity
the difference b/w the amount of product produced and the amount an end user wants to buy
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Discrepancy of Assortment
lack of all the items a customer needs to receive full satisfaction from a product(s)
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Temporal Discrepancy
situation that occurs when a product is produced but a customer is not ready to buy it
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Spatial Discrepancy
difference b/w the location or a producer and the location of widely scattered markets
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Retailer
channel intermediary that sells mainly to consumers
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Merchant Wholesaler
institution that buys goods from manufacturers and resells them to businesses, govt agencies & other wholesalers or retailers & that receives and takes title to goods, stores them in its own warehouses and later ships them
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Agents & Brokers
wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers or manufacturers
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Determining Type of Intermediary to Use
- Product characteristics
- Buyer considerations
- Market characteristics
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Logistics
efficient and cost-effective forward and reverse flow and storage of goods, services & related info into, thru, and out of channel member companies
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Channel Functions
(Chart on p. 205)
- Transactional
- Logistical
- Facilitating
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Direct Channel
distribution channel in which producers sell directly to consumers
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Marketing Channels for Consumer Products
- Direct
- Retailer
- Wholesaler
- Agent/Broker
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Channels for Biz & Industrial Products
- Direct - Industrial & Govt. buyers
- Industrial Distributor
- Agent/Broker
- Agent/Broker-industrial Distributor
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Dual Distribution (Multiple Distribution)
use of 2+ channels to distribute the same product to target markets
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Strategic Channel Alliance
cooperative agreement b/w BF's to use the other's already established distribution channel
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Factors Affecting Channel Choice
- Market Factors
- Product Factors
- Producer Factors
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Product Factors
Delicacy of Product
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Producer Factors
- Producer Resources
- # of Product Lines
- Desire for Channel Control
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Intensive Distribution
form of distribution aimed at having a product available in every outlet where target customers might want to buy it
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Selective Distribution
- form of distribution achieved by screen dealers to eliminate all but a few in any single area
- EX: not everyone carries Epson printers
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Exclusive Distribution
- form of distribution that establishes one or a few dealers with a given area
- EX: ferrari dealers in SA
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Types of Channel Relationships
- Arm's Length Relationship
- Cooperative
- Integrated
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Social Dimensions of Channels
- Power
- Control
- Leadership
- Conflict
- Partnering
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Channel Power
capacity of a particular mktg channel member to control or influence the behavior of other channel members
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Channel Control
situation that occurs when 1 mktg channel member intentionally affects another member's behavior
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Channel Leader
member of a mktg channel that exercises authority/power over the activities of other members
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Channel Conflict
clash of goals and methods b/w distribution channel members
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Horizontal vs. Vertical Conflict
- Horizontal: conflict on same level
- Vertical: conflict b/w different levels in a mktg channel
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Channel Partnering
joint effort of all channel members to create a channel that serves customers and creates a competitive advantage
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