individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
any intermediary between manufacturer and end-user markets
Agent or Broker
any intermediary with legal authority to act on behalf of the manufacturer
an intermediary who sells to other intermediaries usually to retailers, usually applies to consumer markets
an intermediary who sells to customers
an imprecise term usually used to describe intermediaries who perform a variety of distribution functions including selling, maintenance of inventories, and so on
an even more imprecise term they can mean the same as distributor, retailer, wholesaler
buying, selling, risk-taking
sorting, storing, sorting, transporting
financing, grading, marketing information and research
a marketing channel where producer and ultimately consumers deal directly with each other
a marketing channel where intermediaries are inserted between the producer and consumer and perform numerous channel functions
performs a variety of marketing channel functions including selling something delivering a full product assortment, and financing for business goods and services
Electronic marketing channels
employ the Internet to make goods and services available for consumption or use by consumers or business buyers
Direct marketing channels
allow consumers to buy products by interacting with various advertising media without a face-to-face meeting with the salesperson.
Multiple channel distribution
sometimes referred to as hybrid marketing channels or dual distribution – an arrangement whereby a firm reaches buyers by employing two or more different types of marketing channels
Strategic channel alliances
a practice whereby one firm’s marketing channel is used to sell another firm’s products
independently owned firms that take title to the merchandise they handle
General merchandise or full-line wholesalers
carry a broad assortment of merchandise and perform all channel functions
Specialty merchandise or limited line wholesalers
offer a relatively narrow range of products but have an extensive assortment within the product line carried
work for several producers and carry non-competitive complement three merchandise in an exclusive territory, also called manufacturers’ representatives
represent a single producer and are responsible for the entire marketing function of that producer
independent firms or individuals whose principal function is to bring buyers and sellers together to make sales
Manufacturers branch office
carries a producers inventory and performs the functions of a full-service wholesaler
Manufacturers sales office
does not carry inventory, typically performs only a sales function and serves as an alternative to agents and brokers
Vertical marketing systems
professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact
Corporate vertical marketing system
combination of successive stages of production and distribution under a single ownership
a producer might own the intermediary at the next level down in the channel, examples include Goodyear and Irving oil.
Contractual vertical marketing system
independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact
Wholesaler sponsored voluntary chains
wholesaler develops a contractual relationship with small independent retailers to standardize and coordinate buying practices
Retailer sponsored cooperatives
small independent retailers form an organization that operates wholesale facility cooperatively
contractual arrangement between the parent company and an individual firm that allows a franchise to operate a certain type of business under an established name and according to specific rules
Administered vertical marketing system
achieve coordination that successive stages of production and distribution by the size and influence of one channel member rather than through ownership.
Factors affecting channel choice
Environmental, Consumer, Product, company
Channel Design Considerations
target market coverage, satisfying buyer requirements, profitability
target market coverage
Intensive distribution, exclusive distribution, selective distribution.
means that a firm tries to place its products and services as many outlets as possible
the extreme opposite of intensive distribution because only one retail outlet in a specified geographical area carries the firms product
lies between these two extremes and means the firm selects and the retail outlets and a specified geographical area
Satisfying buyer requirements
falls under four categories information, convenience, variety, and attendant services
the third consideration in designing a channel is profitability which is determined by the margins earned for each channel member and for the channel as a whole
global dimensions of marketing channels
understanding marketing channels in global markets is a pre-requisite to successful marketing, marketing channels around the world of sex traditions customs and geography
this type of distribution bonds producers and intermediaries together through vertical integration and social and economic ties to ensure that each channel member benefits from the distribution alignment.
arises when one channel member believes another channel member is engaging in behavior that prevents it from achieving its goals
occurs between different levels in a marketing channel for example between the manufacturer and a wholesaler or retailer.
conflict arises when a channel member bypasses another member and cells or by-product direct
occurs between intermediaries at the same level in a marketing channel such as between two or more retailers for example Zellers and Walmart
Cooperation in marketing channels
one means is through a channel captain, which is a channel member that coordinates directs and supports other channel members
conflict in marketing channels is typically resolved through negotiation or the exercise of influence by channel members, sometimes conflict reduces legal action.
a situation where a manufacturer distributes through its own vertically integrated channels in direct competition with wholesalers and retailers that also sell its products
not illegal but the practice could be subject to legal action is such integration were designed to eliminate or lesson competition duly.
occurs when supplier requires a distributor adjusting some products to by other goods from the supplier.
Resale or market restrictions
referred to as suppliers attempt to stipulate to you and distributors maybe sell the suppliers products and in which geographical areas
the practice of organizing the cost-effective flow of raw materials, in process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements
a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users
supply chain management
the integration and organization of information and logistics activities across firms and a supply chain for the purpose of creating and delivering goods and services that provide value to customers
Key Logistics Function in a Supply Chain
Warehousing and Materials Handling
Warehousing and Materials Handling
Just in time inventory concept
supply system that operates with very low inventories and requires fast on-time delivery
Vendor managed inventory
supplier determines product amount and assortment a customer needs and automatically delivers the appropriate terms.
reclaiming recyclable materials from the point of consumption for repair, remanufacturing, redistribution, or disposal