- are organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C).
- They're called intermediaries because they're in the middle of a series of organizations that join together to help distribute goods from producers to consumers.
Channel of distribution
consists of a set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.
are marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods
are organizations that sell to ultimate consumers.
Basic points about intermediaries
- 1.Marketing intermediaries can be eliminated, but their activities can't; that is, you can eliminate some wholesalers and retailers, but then consumers or someone else would have to perform the intermediaries' tasks, including transporting and storing goods, finding suppliers, and establishing communication with suppliers.
- 2.Intermediary organizations have survived because they perform marketing functions faster and more cheaply than others can.
3.Intermediaries add costs to products, but these costs are usually more than offset by the values they create.
Types of Utility
- Form Utility
- Time Utility
- Place Utility
- Possession Utility
- Information Utility
- Service Utility
are independently owned firms that take title to the goods they handle. About 80 percent of wholesalers fall in this category. There are two types of merchant wholesalers
furnish racks or shelves full of merchandise, like music, toys, hosiery, and health and beauty aids, to retailers.
serve mostly smaller retailers with a limited assortment of products.
solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.
puts products into as many retail outlets as possible, including vending machines.
uses only a preferred group of the available retailers in an area.
is the use of only one retail outlet in a given geographic area. The retailer has exclusive rights to sell the product and is therefore likely to carry a large inventory, give exceptional service, and pay more attention to this brand than to others.
consists of selling goods and services to ultimate consumers online.
is a form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services
is the sale of goods and services by telephone. Many companies use it to supplement or replace in-store selling and complement online selling
reaches consumers in their homes or workplaces
includes any activity that directly links manufacturers or intermediaries with the ultimate consumer. It includes direct mail, catalog sales, and telemarketing as well as online marketing.
Corporate distribution system
one firm owns all the organizations in the channel of distribution.
three forms of contractual systems
- Franchise systems
- wholesaler-sponsored chains
- retail cooperatives
. The franchisee agrees to all the rules, regulations, and procedures established by the franchisor. This results in the consistent quality and level of service you find in most franchised organizations.
Each store signs an agreement to use the same name, participate in chain promotions, and cooperate as a unified system of stores, even though each is independently owned and managed.
This arrangement is much like a wholesaler-sponsored chain except it is initiated by the retailers. The same degree of cooperation exists, and the stores remain independent. Normally in such a system, retailers agree to focus their purchases on one wholesaler, but cooperative retailers could also purchase a wholesale organization to ensure better service.
Administered distribution system
a system in which producers manage all the marketing functions at the retail level.
consists of all the linked activities various organizations must perform to move goods and services from the sources of raw materials to ultimate consumers.
Channel Of Distribution
- Suppliers plants
is the planning, implementing, and controlling of the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.
is the movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations.