Chapter 11 Flashcards
CHANNELS OF DISTRIBUTION
The Marketing Channel consists of a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.
FUNCTIONS OF MARKETING CHANNELS
1) Marketing communications
2) Inventory management
3) Physical distribution
4) Market feedback
5) Financial risk
CHANNEL STRUCTURE ISSUES
Direct versus indirect channels
The producer and consumer are always members of the channel.
Indirect channels include intermediaries.
Direct: Producer Consumer Indirect: Producer Retailer Consumer Producer Wholesaler Retailer Consumer
CHANNEL STRUCTURE ISSUES
1) Single versus multiple channels
2) Vertical marketing systems(VMS):
- channel members are owned by other members or linked via some agreement.
- Corporate channel systems
- Contractual channel systems
- Administered channel system
MANAGING MARKET COVERAGE
1) Intensive distribution - saturation of all suitable retail outlets.
2) Exclusive distribution - sales are restricted to one outlet in a given geographic area.
3) Selective distribution - sales are restricted to a limited number of outlets.
LOGISTICS MANAGEMENT
1) Marketing Logistics is the planning, implementation, and movement of goods and services from point of origin to point of consumption.
2) Decisions often involve a compromise between low cost and high customer service.
KEY LOGISTIC ACTIVITIES
1) Order processing & logistics information management
2) Warehousing & materials handling
3) Inventory control
4) Transportation
RETAILING
Retailing: All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use.
Unique characteristics:
1) Sell smaller quantities more frequently
2) Provide assortments
3) Emphasize atmospherics
CLASSIFYING RETAILERS
Retailers are normally classified along the following dimensions:
1) Ownership (organization)
2) Level of service
3) Product Assortment
4) Price
