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Unformatted text preview: USC Marketing 307 #8 Distribution (Place) 2006 Ira S. Kalb. All rights reserved. 1 1. De nition . Process of making it convenient for market targets to nd, buy, and use your product (to achieve the goals of your marketing plan). 2. Channel Options . Similar to waterways, veins, and arteries, products are distributed through channels. 2-1. Direct to end buyer. There are two direct channels (1) Direct Marketing (Internet, mail order, home shopping network, phone sales) where there is no face-to-face contact between buyer and seller, and (2) Selling via your Sales force, where there is face-to-face contact between buyer and seller. 2-2. Distributor (wholesaler) and Dealer (retailer) . The Manufacturer sells to a distributor that sells to a dealer that, in turn, sells to an end buyer . In this case there are two middle people. 2-3. Big Dealer (Big Box) . The Manufacturer sells to a big dealer , such as Wal-Mart, Costco, Home Depot who sells directly to the end buyer . Since this eliminates one of the middle people, end buyers drive longer distances to save money by buying directly from big dealers or outlet stores. 3. Levels, types of companies (players), and their added value function . The players that operate in the channels and their added values are 3-1. Manufacturers Add value by making the product . 3-2. Distributors Add value by warehousing the product for the levels above (manufacturers) and below (dealers). 3-3. Dealers Add value by making it convenient for end buyers (consumers or companies) to nd, buy and use the product. Manufacturers make products and need to sell them quickly to make money. Dealers can only afford to buy in small quantities to make money selling in smaller quantities to End Buyers . This creates a need for Distributors who add value by warehousing products so Manufacturers and Dealers can make money and satisfy the needs of End Buyers . It is all about making it convenient for end buyers and enabling channel players to make money (return on investment). USC Marketing 307 #8 Distribution (Place) 2006 Ira S. Kalb. All rights reserved. 2 4. Distributors versus Agents there are two main types of players that operate in distribution channels Resellers (distributors) and Agents. 4-1. Resellers All middle people (distributors and dealers)who make up the levels of distribution channels are legally called distributors (hence the general term of this building block Distribution )....
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