1

MARKETING CHANNELS AND

SUPPLY-CHAIN MANAGEMENT
Distribution
Activities involved in making products available to
customers when and where they want to purchase
them.
Marketing Channel
Marketing Intermediary
Supply Chain Management

2
The Marketing Game
(refer Chapter 3 p. 34)
The game discusses dealers not wholesalers or
retailers
We can assume that with two channels of
distribution we can have wholesalers only
Or we can have in the second channel
wholesalers and retail electronic dealers
Or some combination.
3
Marketing Channels Consist of
Intermediaries
Marketing Intermediary
An intermediary linking producers to other
intermediaries or to ultimate consumers through
contractual arrangements or through the purchase
and resale of products
Direct Channel Direct Channel
Producer Producer Producer
Customer Customer Customer
Producer Producer Producer
Customer Customer Customer
Indirect Channel Indirect Channel
Producer Producer Producer
Customer Customer Customer
Intermediary Intermediary Intermediary
Producer Producer Producer
Customer Customer Customer
Intermediary Intermediary Intermediary
4
Typical Marketing Channels for Consumer Products
Figure 14.2
5
Selecting Marketing Channels
Figure 14.3
6
Intensity of Market Coverage
Intensive Distribution

Selective Distribution

Exclusive Distribution

Marvin Windows and Doors
available at selective outlets.
Used By Permission.
7
Intensive Distribution
Selling products using all responsible dealers
and suitable dealers in a distribution channel

Q. Should intensive distribution be selected?
Can 90 to 99% of channel dealers be serviced?
8
Selective Distribution
Using dealers who will service your product
Using dealers who provide special attention to
your product
Sales reps call on a mid range percentage say
35 to 75% of available dealers within a channel
9
Exclusive Distribution
Using only one or a select few dealers to sell
product.
Sales reps call on relatively few, 2 to 12%, a
small percentage of available dealers within a
channel.
Types of Full-Service Wholesalers
General-Merchandise
Wholesalers
Full-service wholesalers with a wide
product mix but limited depth within
product lines
General-Line
Wholesalers
Full-service wholesalers that carry
only a few product lines but many
products within those lines
Specialty-Line
Wholesalers
Full-service wholesalers that carry
only a single product line or a few
items within a product line
Rack Jobbers Full-service specialty-line
wholesalers that own and maintain
display racks in stores

Traditional Full Service
v. Discounters
Advantages of full service:
Service
Provides warranty coverage
Focus on ways to differentiate value
Wholesaling
Transactions in which products are bought for
resale, for making other products, or for
general business operations
Wholesaler
An individual or organization that sells products
which are bought for resale, for making other
products, or for general business operations
Handles the physical distribution
of goods
Furnishes channel information
to facilitate and manage the
supply channel
Services Provided by
Wholesalers
Serve as an extension of the producers
sales force through contact with suppliers
and retailers
Lend financial assistance for the
distribution channel
Transport and warehouse inventories
Assume credit risks of buyers/customers
Purchase producers entire output:
convert producers output immediately to
working capital
Channel information from and to sellers
and buyers
Major Wholesaling Functions
Supply-Chain Management
Promotion
Warehousing, Shipping, and Product Handling
Inventory Control and Data Processing
Risk Taking
Financing and Budgeting
Marketing Research and Information Systems