Chapter 15Chapter 15Managing Marketing Managing Marketing

ChannelsChannels

I. What is the place element of the I. What is the place element of the marketing mix?marketing mix?

Place is concerned with making products Place is concerned with making products available in the right quantities and available in the right quantities and locations when customers want them.locations when customers want them.

Why is “place” an important element of the Why is “place” an important element of the marketing mix?marketing mix?

II. What is a marketing channel ?II. What is a marketing channel ?

Any series of firms or individuals who Any series of firms or individuals who participate in the flow of goods and participate in the flow of goods and services from producer to final userservices from producer to final user

III. IntermediariesIII. Intermediaries

A.A. TypesTypes RetailerRetailer WholesalerWholesaler AgentAgent

B.B. Value Created by IntermediariesValue Created by Intermediaries Improve exchange efficiencyImprove exchange efficiency Perform marketing functionsPerform marketing functions Eliminate assortment / quantity discrepanciesEliminate assortment / quantity discrepancies

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FIGURE 15-AFIGURE 15-A Types of Intermediaries

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FIGURE 15-2 FIGURE 15-2 How intermediaries improve How intermediaries improve exchange efficienciesexchange efficiencies

IV. Channel Structure DecisionsIV. Channel Structure Decisions

A. Direct Vs. Indirect ChannelsA. Direct Vs. Indirect Channels

Direct channel- a marketing channel that Direct channel- a marketing channel that does not use intermediaries to distribute does not use intermediaries to distribute the product.the product. Why sell directly?Why sell directly?

Indirect channel – a marketing channel Indirect channel – a marketing channel where intermediaries are used to help where intermediaries are used to help distribute the product.distribute the product. Why sell indirectly?Why sell indirectly?

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FIGURE 15-4 Examples of direct and indirect FIGURE 15-4 Examples of direct and indirect channelschannels

B. Target Market Coverage StrategiesB. Target Market Coverage Strategies

Intensive distributionIntensive distribution What is it?What is it? When is it used?When is it used?

Selective distributionSelective distribution What is it?What is it? When is it used?When is it used?

Exclusive distributionExclusive distribution What is it?What is it? When is it used?When is it used?

C. Dual DistributionC. Dual Distribution

Occurs when an organization distributes Occurs when an organization distributes its product through two or more different its product through two or more different types of marketing channels which types of marketing channels which typically compete for the same target typically compete for the same target market.market.

May cause conflict with channel May cause conflict with channel intermediariesintermediaries

V. Vertical Marketing SystemsV. Vertical Marketing Systems

What is a VMS?What is a VMS?

A marketing channel that a single channel A marketing channel that a single channel member coordinatesmember coordinates

Types of VMSTypes of VMS CorporateCorporate ContractualContractual AdministeredAdministered

VI. Factors to Consider When VI. Factors to Consider When Selecting Specific Intermediaries Selecting Specific Intermediaries

The producer will want to use intermediaries The producer will want to use intermediaries who:who:

Reach their target marketReach their target market Have a good reputationHave a good reputation Handle distribution functions efficientlyHandle distribution functions efficiently Order large quantitiesOrder large quantities Pay invoices quicklyPay invoices quickly Display and promote merchandise wellDisplay and promote merchandise well Have a good location and professional Have a good location and professional

salespeoplesalespeople