Chapter 15 book notes

Chapter 15 book notes - Chapter 15: Nature and Importance...

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Chapter 15: Nature and Importance of Marketing Channels Marketing channel : consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. Make possible the flow of goods from a source to terminus. Intermediaries: o Middleman : between manufacturer and end-user markets o Agent or broker : legal authority to act on behalf of the manufacturer o Wholesaler : sells to other intermediaries, usually to retailers; applies to consumer markets o Retailer: sells to consumers o Distributor : perform a variety of distribution functions – selling, maintaining inventories, extending credit, etc; may be used to refer to wholesalers o Dealer : more imprecise term than distributer that can mean the same as distributer, retailer, wholesaler, and so forth. Producers recognize that intermediaries make selling goods and services more efficient because they minimize the number of sales contact necessary to reach a target market. (value). Intermediaries make possible the flow of products from producers to buyers by performing 3 basic functions: o Transactional function : involves buying, selling and risk taking because they stock merchandise in anticipation of sales. o Logistical function : the gathering, storing, and dispersing of products. o Facilitating function : assist producers in making goods and services more attractive to buyers. Cannel members often negotiate about which specific function they will perform. Consumers: having the goods and services you want, when you want them, where you want them, and in the form you want them is the ideal result of marketing channels. o [time, place, form, and possession] Channel Structure and Organization: o As the number of intermediaries between a producer and buyer increases, the channel is viewed as increasing in length. producer wholesaler retailer consumer channel is longer than the producer consumer channel. o CONSUMER MARKETING CHANNELS: Direct Channel : a producer and ultimate consumers deal directly with each other. Producer consumer [insurance companies] Indirect Channel : intermediaries are inserted between the producer and consumers and perform numerous channel functions. Producer retailer consumer [automobiles] Producer wholesaler retailer consumer [candy, low-cost items] Producer agent wholesaler retailer consumer [foreign jeweler]
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o BUSINESS CHANNELS: typically are shorter and rely on one intermediary or none at all because business users are fewer in number, tend to be more concentrated geographically, and buy in larger quantities. Direct Channel
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This note was uploaded on 10/04/2011 for the course MKTG 3104 taught by Professor Ebcoupey during the Spring '08 term at Virginia Tech.

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Chapter 15 book notes - Chapter 15: Nature and Importance...

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