a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer
In marketing channels, how do we achieve economies of scale?
Marketing channels can also attain economies of scale through specialization and division of labor by aiding producers who lack the motivation, financing, or expertise to market directly to end users or consumers.
Who are the intermediaries of marketing channels?
Channel members ( also called intermediaries, resellers, and middlemen) negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer.
What roles do they play?
As products move to the final consumer, channel members facilitate the distribution process by providing specialization and division of labor, overcoming discrepancies, and providing contact efficiency.
Role of logistics in marketing channel
Physically distributing: Transporting and sorting goods to overcome temporal and spatial discrepancies
Storing: Maintaining inventories and protecting goods
Sorting: Overcoming discrepancies of quantity and assortment by :
Sorting out: Breaking down a heterogeneous supply into separate homogeneous stocks
Accumulating: Combining similar stocks into a larger homogeneous supply
Allocating: Breaking a homogeneous supply into smaller and smaller lots (” breaking bulk”)
Assorting: Combining products into collections or assortments that buyers want available at one place
the efficient and cost- effective forward and reverse flow and storage of goods, services, and related information into, through, and out of channel member companies
Dual distribution (Multiple distribution)
the use of two or more channels to distribute the same product to target markets
The third need fulfilled by marketing channels is that they provide contact efficiency by reducing the num-ber of stores customers must shop in to complete their purchases.
a channel conflict that occurs among channel members on the same level
Integrated relationships are closely bonded relation-ships characterized by formal arrangements that explic-itly define the relationships of the channel members. These relationships may take two forms. With vertical integration, all the related channel members are owned by a single legal entity, whereas in a supply chain, several companies act as one.
When a product is produced but a consumer is not ready to buy it.
Marketing channels overcome temporal discrepancies by maintaining inventories in anticipation of demand. For example, manufacturers of seasonal merchandise, such as Christmas or Halloween decorations, are in operation all year even though consumer demand is concentrated during certain months of the year.
3rd party logistics
Arrangement in which a firm with long and varied supply chains outsources it logistical operations to one or more specialist firms, the third party logistics providers.
Modes of transportation
railroads, motor carriers, pipelines, water transportation, and airways.
individuals or organizations who sell directly to end- consumers
Types of retail establishments
Department stores – a store housing several departments under one roof
Specialty stores – a retail store specializing in a given type of merchandise
Supermarkets – a large, departmentalized, self- service retailer that specializes in food and some nonfood items
Drugstores – a retail store that stocks pharmacy- related products and services as its main draw
Convenience stores – a miniature supermarket, carrying only a limited line of high- turnover convenience goods
Discount stores – a retailer that competes on the basis of low prices, high turnover, and high volume
full- line discount stores offer con-sumers very limited service and carry a much broader assortment of well- known, nationally branded ” hard goods,” including housewares, toys, automotive parts, hardware, sporting goods, garden items, and clothing.
Supercenter – a retail store that combines groceries and general merchandise goods with a wide range of services
Specialty Discount Store – a retail store that offers a nearly complete selection of single- line merchandise and uses self-service, discount prices, high volume, and high turnover
Warehouse Membership Club – a limited- service merchant wholesaler that sells a limited selection of brand name appliances, household items, and groceries on a cash- and-carry basis to members, usually small businesses and groups
Off-price retailer – a retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its stock and usually doesn’t ask for return privileges
Factory outlet – an off-price retailer that is owned and operated by a manufacturer
Restaurants – Restaurants straddle the line between retailing establishments and service establishments. Restaurants do sell tangible products— food and drink— but they also provide a valuable service for consumers in the form of food preparation and food service. Most restaurants could even fall into the definition of a specialty retailer given that most concentrate their menu offerings on a distinctive type of cuisine
Types of ownership
independent retailer – a retailer owned by a single person or partnership and not operated as part of a larger retail institution
chain store – a store that is part of a group of the same stores owned and operated by a single organization
franchise – the right to operate a business or to sell a product
a store that consumers purposely plan to visit
What purpose does atmosphere serve in retailing?
The main element of a store’s presentation is its atmosphere, the overall impression conveyed by a store’s physical layout, decor, and surroundings. The atmosphere might create a relaxed or busy feeling, a sense of luxury or efficiency, a friendly or cold attitude, a sense of organization or clutter, or a fun or serious mood. Urban Outfitters stores, targeted to Generation Y consumers, use raw concrete, original brick, rusted steel, and unfinished wood to convey an urban feel.
Adding interactivity to the retail environment is one of the most popular strategies in retailing in the past few years. Small retailers as well as national chains are using interactivity in stores to differentiate themselves from the competition. The new interactive trend gets customers involved rather than just catching their eye.
Steps in retailing strategy
Define the target market
Choose the retailing mix – consists of six Ps: the four Ps of the marketing mix ( product, place, promo-tion, and price) plus presentation and personnel
Retail promotion strategy in-cludes advertising, public relations and publicity, and sales promotion. The goal is to help position the store in consumers’ minds. Retailers design intriguing ads, stage special events, and develop promotions aimed at their target markets.
4 aspects of promotional mix
one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors
inform the target audience, persuade the target audience, or remind the target audience.
Unique selling proposition
a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
Agreement between two or more marketers with complementary products (such as cosmetics and toiletries) or different seasonal sales cycles (such as raincoats and winter coats) to promote or sell each other’s products with their own. Also called cooperative marketing or co-marketing.
a specific communication task that a campaign should accomplish for a specified target audience during a specified period
The DAGMAR approach ( Defining Advertising Goals for Measured Advertising Results) is one method of setting objectives. According to this method, all advertising objectives should precisely define the tar-get audience, the desired percentage change in some specified measure of effectiveness, and the time frame in which that change is to occur.