chapter 15 outline - Chapter 15: Managing Marketing...

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Chapter 15: Managing Marketing Channels and Wholesaling I. Nature and Importance of Marketing Channels What is a Marketing Channel of Distribution? o Marketing channel: individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users o Analogy: pipeline – make flow of goods possible from producer to buyer Value is Created by Intermediaries o Make selling goods and services more efficient by minimizing number of sales contacts necessary to reach a target market o Important Functions Performed by Intermediaries Transactional function: buying, selling, risk taking because they stock merchandise in anticipation of sales Logistical function: gathering, storing, and dispersing of products Facilitating functions: assist producers in making goods and services more attractive to buyers Channel members negotiate about which specific functions they will perform o Consumers Also Benefit from Intermediaries Time: having a good/service when you want it Place: having a good/service where you want it Form: enhancing a product to make it more appealing to buyers Possession: intermediaries help buyers take possession of a good/service II. Channel Structure and Organization Marketing Channels for Consumer Goods and Services o Direct Channel Producer and ultimate consumers deal directly with each other o Indirect Channel Intermediaries inserted between producer and consumers and perform numerous channel functions Large retailers: usually just have one retailer intermediary and no wholesaler No wholesaler because there are so many variations that it would be impossible for a wholesaler to stock all models required to satisfy buyers Low-cost, low-unit value: usually wholesaler to retailer to consumer Many small manufacturers and many small retailers: most indirect channel, with agent, then wholesaler, then retailer, then consumer Marketing Channels for Business Goods and Services o Direct Channel
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Buyers are large and well-defined, sales effort requires extensive negotiations, products are of high unit value: producer directly to industrial user o Indirect Channel Industrial distributor: performs a variety of marketing channel functions, selling, stocking, delivering, financing; like wholesalers Producer to industrial distributor to industrial user Agent: serves primarily as independent selling arm of producers and represents a producer to industrial users Producer to agent to industrial user Agent/Distributor: producer to agent to industrial distributor to industrial user Electronic Marketing Channels o Employ internet to make goods and services available for consumption or use by consumers or business buyers Combine electronic and traditional intermediaries to create time, place, form, and possession utility for buyers o Channels for books: publisher to wholesaler to virtual retailer to
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chapter 15 outline - Chapter 15: Managing Marketing...

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