Jo - Test 3 Review - Chapter 11: Place and Development of...

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Chapter 11: Place and Development of Channel Systems - Place : making goods and services available in the right quantities and locations, when customers want  them o Place decisions often have long-run effects; harder to change than product, promotion, or price;  may not  be one arrangement that is best - Channel of Distribution : any series of firms or individuals who participate in the flow of products from  producer to final user or consumer o Direct or Indirect     Direct      = producers handle the whole distribution process themselves; example: direct-to- consumer e-commerce   offers more control over the whole marketing job (sometimes  can offer lower prices, more effectiveness, easier to change the marketing mix b/c more  aware of customer attitudes, fewer competitors) The internet and e-commerce make this much easier Many business products are sold direct to consumer b/c of fewer transactions,  larger orders, concentration in geographic areas, ease or re-order through e- commerce once relationships are established Many service firms use direct channels Indirect      = producers distribute product through a “middleman”; example: wholesalers,  retailers, other specialists Many firms who produce physical goods use indirect channels in order to provide  “follow up” services that customers expect; an intermediary produces the service An increasing number of consumer products are sold through middlemen Many contractors like to make all purchases is one convenient stop; customers  sometimes prefer to make purchases at specific places Companies with limited financial resources or who want to maintain flexibility may  want to avoid long-term investment by using intermediaries Indirect distribution can reduce a company’s need for working capital by buying  the producer’s output and carrying it in inventory until it is sold Most important reason to use INDIRECT CHANNEL: an intermediary can often  help producers serve customer needs better and at a lower price** Direct Marketing : direct communication between a seller and an individual customer  using a promotion method other than face-to-face personal selling Directly concerned with promotion , not place ! Do NOT confuse with direct  channel of distribution!! - Channel Specialists     o Discrepancy of Quantity : the difference between the quantity of products it is economical for a  producer to make and the quantity final users or consumers normally want  Middlemen (wholesalers/retailers) help adjust for this discrepancy o Discrepancy of Assortment : the difference between the lines a typical producer makes and 
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This note was uploaded on 04/22/2009 for the course MKT 320F taught by Professor Miller during the Spring '08 term at University of Texas at Austin.

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Jo - Test 3 Review - Chapter 11: Place and Development of...

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