ch 14-15 marketing channels

8/10/2019 CH 14-15 Marketing Channels

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1

MARKETING CHANNELS ANDSUPPLY-CHAIN MANAGEMENT

Distribution

Activities involved in making products available tocustomers when and where they want to purchasethem.

Marketing Channel

Marketing Intermediary

Supply Chain Management



2

The Marketing Game(refer Chapter 3 p. 34)

The game discusses dealers not wholesalers orretailers

We can assume that with two channels of

distribution we can have wholesalers only Or we can have in the second channel

wholesalers and retail electronic dealers

Or some combination.



3

Marketing Channels Consist ofIntermediaries

Marketing Intermediary

An intermediary linking producers to otherintermediaries or to ultimate consumers throughcontractual arrangements or through the purchaseand resale of products

Direct ChannelDirect ChannelProducer

ProducerProducer Customer

CustomerCustomerProducer


CustomerCustomer

Indirect ChannelIndirect Channel

Producer


CustomerCustomerIntermediary

IntermediaryIntermediaryProducer


CustomerCustomerIntermediary

IntermediaryIntermediary



4

Typical Marketing Channels for Consumer Products

Figure 14.2



5

Selecting Marketing Channels

Figure 14.3



6

Intensity of Market Coverage

Intensive Distribution

Selective Distribution

Exclusive Distribution

Marvin Windows and Doorsavailable at selective outlets.

© Used By Permission.



7

Intensive Distribution

Selling products using all responsible dealersand suitable dealers in a distribution channel

Q. Should intensive distribution be selected?

Can 90 to 99% of channel dealers be serviced?



8

Selective Distribution

Using dealers who will service your product

Using dealers who provide special attention toyour product

Sales reps call on a mid range percentage say35 to 75% of available dealers within a channel



9

Exclusive Distribution

Using only one or a select few dealers to sellproduct.

Sales reps call on relatively few, 2 to 12%, a

small percentage of available dealers within achannel.



Types of Full-Service Wholesalers

General-MerchandiseWholesalers

Full-service wholesalers with a wideproduct mix but limited depth withinproduct lines

General-Line

Wholesalers

Full-service wholesalers that carry

only a few product lines but manyproducts within those lines

Specialty-LineWholesalers

Full-service wholesalers that carryonly a single product line or a fewitems within a product line

Rack Jobbers Full-service specialty-linewholesalers that own and maintaindisplay racks in stores



Traditional Full Servicev. Discounters

Advantages of full service:

Service

Provides warranty coverage

Focus on ways to differentiate value



Wholesaling• Transactions in which products are bought for

resale, for making other products, or forgeneral business operations

• Wholesaler

– An individual or organization that sells productswhich are bought for resale, for making otherproducts, or for general business operations

• Handles the physical distributionof goods

• Furnishes channel informationto facilitate and manage thesupply channel

S i P id d b



Services Provided byWholesalers

• Serve as an extension of the producer’ssales force through contact with suppliersand retailers

• Lend financial assistance for the

distribution channel• Transport and warehouse inventories

• Assume credit risks of buyers/customers

• Purchase producers’ entire output:convert producer’s output immediately toworking capital

• Channel information from and to sellers

and buyers



Major Wholesaling Functions

• Supply-Chain Management• Promotion

• Warehousing, Shipping, and Product Handling

• Inventory Control and Data Processing

• Risk Taking

• Financing and Budgeting

• Marketing Research and Information Systems

ch 14-15 marketing channels

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