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MARKETING CHANNEL
A
set of interdependent organizations that help make a product or service available for use or consumption by consumer or business user.
Dell revolutionized its industry by selling its PC directly to consumers. Amazon.com pioneered the sales of books and wide range of other goods via the internet
to other firms
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Intermediaries require fewer contacts to move the product to the final purchaser. Intermediaries help match product assortment demand with supply.
Intermediaries help bridge major time, place, and possession gaps that separate products from those who would use them.
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Channel Level- A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.
Producer
Producer
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Producer
Producer
Business Distributer
Business Distributer
Business Customer
Business Customer
Business Customer
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Types of intermediaries
Company sales force, manufacturers agency, industrial distributors Intensive, selective, and exclusive distribution
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Performance should be checked against standards Channel members should be rewarded or replaced as dictated by performance
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A distribution channel structure in which producers , wholesaler, retailer act as a unified system. One channel member owns the others, has contracts with them, or has so much power that hey all cooperate.
channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
Wal-Mart + McDonalds Coca cola + Nestle
MULTICHANNEL DISTRIBUTION
Also called hybrid marketing channels Occurs when a firm uses two or more marketing channels Changing Channel Organization (changing and chopping channel members) Disintermediation ( removing some layers altogether)
Producer
Consumer segment1
Consumer segment2
Business segment1
Business segment2
CHANNEL CONFLICT
Channel conflict is a situation in which channel partners have to compete against one another or the vendor's internal sales department. Channel conflict can cost a company and its partners money as partners try to undercut one another. It can also lower morale within the channel and cause some partners to consider other vendors.
CAUSES OF CONFLICT
Goal Incompatibility Unclear Roles and Rights Difference in Perception Degree of Dependence
DEFINITIONS
Retailing
All activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use. Business whose sales come primarily from retailing.
Retailer
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TYPES OF RETAILERS
Specialty Stores Department Stores Supermarkets
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CLASSIFICATIONS OF RETAILERS
Amount of service
Product lines Relative prices
Self-service retailers
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Limited-service retailers
Organizational approach
Full-service retailers
CLASSIFICATIONS OF RETAILERS
Specialty stores
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Department stores
Limited line
Superstores
Category killers
CLASSIFICATIONS OF RETAILERS
Discount stores
Amount of service
Product lines Relative prices
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Off-price retailers
Factory outlets
Organizational approach
Warehouse clubs
CLASSIFICATIONS OF RETAILERS
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Target marketing and positioning Product assortment, service mix, stores atmosphere Price Promotion Place (location)
WHOLESALING
All
activities involved in selling goods and services to those buying for resale or business use.
Wholesaler- A firm engaged primarily in wholesaling activity.
FUNCTIONS OF WHOLESALER
Selling and promoting Buying and assortment building Bulk breaking Warehousing Transportation Financing Risk bearing Market information Management services and advices
TYPES OF WHOLESALERS
Merchant Wholesalers Brokers and Agents Manufacturers and retailers branches and offices
Full-service wholesalers
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Limited-service wholesalers
Cash-and-carry wholesalers Truck wholesalers (jobbers) Mail-order wholesalers (handle only mail order jobs - Fedex)
TYPES OF WHOLESALERS
Merchant Wholesalers Brokers and Agents Manufacturers and
Brokers
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Agents
Commission merchants
TYPES OF WHOLESALERS
Merchant Wholesalers Brokers and Agents Manufacturers and retailers branches and offices
Branches carry inventory: lumber, auto equipment, parts Offices do not carry inventory: dry goods
Purchasing officers
Perform roles similar to brokers and agents, however these individuals are employees of the organization
WHOLESALING
Targeting may be made on the basis of size of customer, type of retailer, need for service.
Product and service assortment: inventory, line Pricing: usual markup on COG is 20% Promotion: largely disorganized and unplanned Place: location, facilities
TRENDS IN WHOLESALING