Busi. 406 Final Exam Study Guide

Busi. 406 Final Exam Study Guide - Ch. 10: Place and...

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Ch. 10: Place and Development of Channel Systems Beginning story: evolution of the computer industry w/ IBM and Dell Place: making products available in the right quantities and locations, when customers want them o Channel of distribution: any series of firms or individuals who participate in the flow of products from producer to final consumer Place decisions are guided by “ideal” place objectives: o Product classes suggest place objectives: for example the consumer product classes versus the business product classes o Place system is not automatic: several place arrangements may be needed by marketing manager o Place decisions have long-run effects: harder to change place decisions than other 3 P’s; must consider product life cycles Channel system may be direct or indirect: o Direct distribution: Used if it is the cheapest or provides the best service Internet makes direct distribution easier More aware of changes in customer attitudes Used if suitable intermediaries are not available: ex. Glaceau (Vitaminwater) bypassed wholesalers b/c they wouldn’t carry its product at first Common w/ business customers and services: business sales typically require fewer transactions Some consumer products are sold direct: examples are firms that use direct selling by representatives Don’t be confused by the term direct marketing: direct communication b/w a seller and an individual customer using a promotion method other than face-to-face personal selling o Indirect distribution: If intermediaries can serve customer needs better and/or at a cheaper cost Channel specialists may reduce discrepancies and separations: o Intermediaries may supply needed information: provide info. to bring buyers and sellers together; can provide crucial info. about customer needs o Discrepancy of quantity: the difference b/w the quantity of products it is economical for a producer to make, and the quantity final consumers normally want (requires help of intermediaries) Accumulating: collecting products from many small producers (ex. coffee from small farms in Colombia) Bulk-breaking: dividing larger quantities into smaller quantities as products get closer to the final market o Discrepancy of assortment: the difference b/w the lines a typical producer makes and the assortment final consumers want (requires help of intermediaries) Sorting: separating products into grades and qualities desired by different target markets (ex. investment firm sorts different mutual fund options for consumers) Assorting: putting together a variety of products to give a target market what it wants (ex. country club golf stores) o Regrouping activities: adjust the quantities or assortments of products handled at each level in a channel of distribution (accumulating, bulk-breaking, etc.) o Watch for changes: sometimes a breakthrough opportunity comes from cutting channels of distribution Channel relationships must be managed:
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This note was uploaded on 05/12/2011 for the course BUSI 406 taught by Professor Perreault during the Spring '11 term at UNC.

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Busi. 406 Final Exam Study Guide - Ch. 10: Place and...

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