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Unformatted text preview: Discussion Question 4.1 Due Episode IV, Due Day 3 Distribution Channels How will the distribution channels differ for an organization that primarily provides a service from one that produces a tangible good? What similarities will exist? What examples can you provide from your own experiences and your readings to illustrate these differences and similarities? Goods are tangible—you can see them, feel them, touch them (Kerin, 2006). Services are intangible—the result of human or mechanical efforts to people or objects (Kerin, 2006). For organizations, the distribution decision is primarily concerned with the supply chain’s front- end or channels of distribution that are designed to move the product (goods or services) from the hands of the company to the hands of the customer. This exchange is an intangible service; however, the concept is the same with tangible goods. All activities and organizations helping with the exchange are part of the organization’s channels of distribution (KnowThis, 2006). Activities involved in the channel are wide and varied though the basic activities revolve around (1) ordering, (2) handling and shipping, (3) storage, (4) display, (5) promotion, (6) selling, and (7) information feedback. The term marketing channel was first used to describe trade channels that connected producers of goods with users of goods (BookRags, 2006). As described above, any movement of products or services requires an exchange. Whenever something tangible (e.g., a computer) or intangible (e.g., services or data) is transferred between individuals or organizations, an exchange has occurred (Thompson, 2001). For example, organizations that are successful without utilizing resellers to sell their products (e.g., Dell Computers sells mostly through the Internet and not in retail stores) may still need assistance with certain parts of the distribution process (e.g., Dell uses parcel post shippers such as FedEx and UPS). In Dell’s case creating their own transportation system makes little sense given how large such a system would need to be in order to service Dell’s customer base. Thus, by using shipping companies Dell is taking advantage of the benefits these services offer to Dell and to Dell’s customers. References BookRags. (2006). Channels of distribution . Electronically retrieved August 8, 2006, from http://www.bookrags.com/other/business/channels-of-distribution-ebf-01.html Kerin, R., Hartley, S., et al. (2006). Marketing (8 th ed.). New York: McGraw-Hill. KnowThis. (2006). Principles of marketing - Part 8: Distribution decisions . Electronically retrieved August 8, 2006, from http://www.knowthis.com/tutorials/principles-of-marketing/distribution- decisions/1.htm Thompson, G. (2001). Channels of distribution. Encyclopedia of Business and Finance ....
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This note was uploaded on 06/12/2011 for the course ETHICS mba taught by Professor Wilkes during the Spring '05 term at University of Phoenix.
- Spring '05