●Multiple channels through which the product can be available to customers●Omnichannels●The more we move into the Internet for shopping, the more logistics become necessaryFunction of channel membersAgents-Usually act purely as a sales arm for the manufacturer, without buying the products. The agent never takes title to the goods; sales representativeWholesaler- actually buy the productChannel selection - Factors affecting channel choiceMarket factors●# of buyers, concentration level, order size, frequencyProduct factors●Price, turnovers, complexity, servicesProducer factors●Available resources, product mix, objectives
Intermediaries’ factorsCompetitors’ characteristics●Channel used by competitorsEnvironment factors●Economic cycles, legislationExample: L’eggs pantyhose - low in price, new elastic technology, since 70% of women wore the same size the company brought the product to the supermarket and drug stores in the midwest states. Company started selling to the coasts when he had financial resources and distribution resourcesWholesalersA merchant establishment operated by a concern that is primarily engaged in buying, taking title to, usually storing and physically handling goods in large quantities, and reselling the goods (usually in smaller quantities) to retailers or to industrial or business usersWholesaler Functions:●Selling & promoting●Buying & assortment building●Bulk breaking●Warehousing●Transportation●Financing●Risk bearing●Market information●Management services and counselingTypes of wholesalersMerchant wholesaler: independent wholesalersbrokers/agents: perform only a few functionsmanufacturer ‘ sales branches and offices: wholesaling by buyers or sellers themselves rather than through independent wholesalers
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- Fall '19