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11-6 Lecture - AEM 2400 Lecture Distribution Strategy Place...

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11/6/09 AEM 2400 Lecture Distribution Strategy “Place” Wegman’s Case: at the beginning, sales were lowered, but as consumers adjusted, Wegman’s saw their market share increase Looks as if changing to EDLP was a good move Managing Marketing Channels Vertical channels Producer consumer, produce retailer consumer, producer wholesaler retailer consumer, producer agent wholesaler retailer consumer Use analogy of stream to consumer Upstream (producer) to downstream (consumer) Direct channel – uses no market intermediaries (anything between the producer and consumer) o Schwan’s – uses direct channel o Frito Lay – 18,000 trucks and takes the food directly to the store (retailer); no wholesaler involved; product is highly perishable; usually an impulse purchase o Avon – cosmetics direct marketer - $10.1B revenue Direct Marketing Channels Mail order (catalogues) TV shopping - $100B o TV shopping sales in 2006 were over $100B, and have increased 16.4% since 2002 o
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