{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

CLEP Principles of Marketing Study Notes

Part iv distribution activities that make products

Info iconThis preview shows pages 10–12. Sign up to view the full content.

View Full Document Right Arrow Icon
PART IV Distribution - activities that make products available to customers when and where they want to purchase them. Choosing which channels of distribution to use is a major part of developing a marketing strategy. A Channel of Distribution (aka: Marketing Channel) - group of individuals and organizations that direct the flow of products from producers to customers. Channels of distribution make products available at the right time, in the right place, and in the right quantity by providing functions such as transportation and inventory management. 3 Functions of Distribution: 1. Transportation 2. Inventory management 3. Customer service Industry sales peak during the maturity stage of the product life cycle. During the maturity stage, industry sales peak and begin to decrease . During the growth stage, industry profits peak. In the growth stage, profits peak, but then as more competitors enter the market, prices go down and promotional expenses go up--this means ultimately more sales in the maturity stage, but less profits. Most channels of distribution involve marketing intermediaries , or middlemen, who link producers to other middlemen or to consumers. The middlemen are known as "intermediaries." There are 2 types of Marketing Intermediaries: 1. Merchants - businessperson who trades in commodities that were produced by others to earn a profit 2. Functional middlemen Services Marketing – services are distinct in 4 ways from manufactured goods: 1. Intangible – not experienced by buyers until services are done 2. Inseparability - services cannot be separated from person providing it 3. Perishable – services cannot be inventoried, returned or resold 4. Variable Sorting activities - functions that allow the members of a distribution channel to divide roles and separate tasks :
Background image of page 10

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
1. Sorting - which involves separating conglomerates of heterogeneous products into relatively uniform, homogeneous groups based on product characteristics. After sorting the goods by quality , color, size, etc., the next step, if necessary is Accumulation. 2. Accumulation - involves developing a reserve or inventory of products that have similar production or demand requirements. An example might be where farmers who grow a relatively small amount of corn transport their corn to central collection points, where the corn is accumulated in large lots for movement into the next level of the distribution channel. The idea is to pool relatively small individual shipments so that they can be transported more economically . 3. Assorting - combination of products it offers to meet the preferences of consumers. The result of the Sorting process is to develop a broad assortment to meet the diverse preferences of consumers. Final result of the entire sorting process is a broad assortment to meet the diverse needs of customers. Combining products into collections that buyers want to have available in one place. Usually done at the retail
Background image of page 11
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page10 / 28

PART IV Distribution activities that make products...

This preview shows document pages 10 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online