Test 3 Study Guide

Test 3 Study Guide - Chapter 14 I. Global Perspective...

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Chapter 14 I. Global Perspective (p.395) – Mastering the distribution system is the single most important challenge of China’s economic revolution. Finding reliable distributers, usually by word of mouth is the first challenge and then the distributors are often state owned, have little incentive to position your brand, and very little understanding of how to do so. Wrigley’s goals are market coverage, maintaining product quality, and effective presentation at the point of sale. II. Channel of Distribution Structures (p.396-405) – The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), and – most importantly – the buying and selling negotiations between producers and middlemen and between middlemen and customers. The distribution structure is the process through which goods pass from producer to user. The middlemen’s customary functions, activities, and services reflect existing competition, market characteristics, tradition, and economic development. a. 3 Characteristics of All Channels (not in textbook) i. Direct/ Indirect (number of levels in a channel) – Refers to the number of levels in a channel (levels between manufacturer and end user). 1. Direct channel has a manufacturer and a consumer as the end user (no levels). Most direct channel have no levels. Has to be a product. a. Ex. Dell computers ordered directly from Dell 2. Most indirect channel has manufacturer, distributer, wholesaler, retailer, and end consumer. Many levels between manufacturer and end user. a. Still less expensive to use middlemen. ii. Intensive/ Exclusive (amount of middlemen at a level) – Refers to the amount of middlemen at a level. 1. Ex. Need to choose a level, retail level. Say you’re Rolex; there are not many retailers where you go to buy Rolex, so at the retail level Rolex uses an exclusive retail channel. 2. Ex. If you’re Timex, you can buy Timex’s almost anywhere. So at the retail level Timex uses an intensive retail channel. You can buy the watches lots of places. 3. Ex. Candy uses many wholesalers, because candy needs to show up in practically every retail market you can think of. iii. Corporate/ Contractual / Administered – Refers to who makes the decisions within the channel. What kind of decisions are we going to make? 1. Corporate: Owned by a channel member, corporate because one of the corporations in the channel owns the channel. Normally manufacturer or brand owner but doesn’t have to be. 1
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a. Ex. apple stores where you can buy apple products is owned by the parent corporation the Apple Computer Company. b. Ex. Talbots is a corporate owned store 2. Contractual: Franchise document 3. Administered: Administered in the sense that Procter Gamble sells it to Wal-Mart at one price and then Wal-Mart turns around and sells it at another. a.
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This test prep was uploaded on 03/18/2009 for the course MKTG 4400 taught by Professor Engel,stev during the Fall '07 term at Colorado.

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Test 3 Study Guide - Chapter 14 I. Global Perspective...

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