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Retail channel: one intermediary––retailers
Wholesaler channel: two intermediaries––
wholesalers and retailers
Agent/broker channel: three intermediaries––
agents or brokers, wholesalers, and retailers
Direct marketing to consumers includes telemarketing, factory outlets, mail-order and catalog
shopping, and electronic retailing. However, most consumer products are sold through retailer
and wholesaler channels.
Five channel structures are common in business-to-business markets:
Direct channel: no intermediaries, direct to •
• industrial users
Direct channel: no intermediaries, direct to
Industrial distributor: one intermediary––
Agent/broker channel: one intermediary––
agents or brokers
Agent/broker–industrial distributor: two
intermediaries––agents or brokers and
industrial distributors Direct selling to a final user is more common in business-to-business marketing than in consumer
marketing. If intermediaries are used, agents or brokers can be used to bring producers and buyers
together for negotiations. Alternatively, an industrial distributor can be used as an intermediary
for standardized items of moderate or low value. Industrial distributors are channel members who
buy and take title to products, usually keep inventories of their products, and sell and service
KEY: CB&E Model Distribution OBJ: 13-3 TOP: AACSB MSC: BLOOMS Synthesis 8. Name and briefly discuss two alternative channel arrangements that can be used to move
There are three alternative channel arrangements discussed in the chapter, and students can
discuss any two of the following:
MULTIPLE CHANNELS/DUAL OR MULTIPLE DISTRIBUTION. Two or more different
channels could be selected to distribute the same product to target markets. For example,
consumer products could be sold through wholesaler and/or retailer channels, in addition to
catalog mail ordering and electronic shopping.
NONTRADITIONAL CHANNELS. The products could be sold through channels such as the
Internet, mail-order channels, or infomercials.
STRATEGIC CHANNEL ALLIANCES. The company could form an alliance with another
manufacturer that already has an established channel. This could be important in foreign
distribution or in any case when creation of marketing channel relationships may be expensive
KEY: CB&E Model Distribution OBJ: 13-3 TOP: AACSB MSC: BLOOMS Synthesis 9. What are the three factors affecting channel choice? Briefly discuss how each factor might
influence a company to implement a direct channel of distribution.
ANS: MARKET FACTORS. Industrial customers tend to buy in larger quantities and require more
customer service. Conversely, consumers usually buy in very small quantities and sometimes do
not mind if they get no service at all. Geographic location and size also determine channel c...
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This document was uploaded on 09/29/2013.
- Fall '13