Mark 8 Flashcards
Explain the different consumer channels used in distribution
- Producer direct to consumer
- Producer to retailer to consumer (retailer)
- Producer to wholesale to retail to consumer (wholesales that buy in bulk that then distribute smaller amounts to customers)
- Producer to an agent to wholesaler to retailer to consumer (A long channel involving an agent who takes commissions for orders)
Explain the different distribution channels used for industrial goods
- Producer to a business customer
- Producer to an agent to the business customer (agent take commissions on the selling of business to business basis)
- Producer to distributer to the business customer (Less expensive method used for the more frequent business to business purchases. Rule on the internal staff who focus on order placing and inventory level, and external sales staff that focus on obtaining new customers)
- Producer to an agent to distributor to the business customer (Used where business customers prefer to utilise distributors, so an agent is used to manage producer good to distributors)
Explain the different distribution channels used for services
Explain the process of choosing a channel strategy
Channel strategy decisions involve the selection of:
1) the most effective distribution channel,
2) the most appropriate level of distribution intensity, and
3) the degree of channel integration.
Channel management decisions involve the selection, motivation, training and evaluation of channel members, and managing conflict between producers and channel members.
Explain the factors of Channel Selection
- Market factors: Matching customer expectations
- Producer factors: Having adequate resources
- Product factors: How the product is sold
- Competitive factors: avoiding channels governed by competitors and creating alternatives
Explain the different methods of distribution intensity
Intensive distribution: aims to provide saturation coverage of the market
Selective distribution enables market coverage to be achieved. A producer uses a limited number of outlets in a geographical area to sell its products.
Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or business-to-business distributor is used in a particular geographic area.
Define Channel integration
Channel integration can range from conventional marketing channels – comprising an independent producer and channel intermediaries – through a franchise operation to channel ownership by a producer
Define a Franchise
A franchise is a legal contract in which a producer and channel intermediaries agree to each members’ rights and obligations.
What are the four levels of the Franchising Distribution chain
Define Channel ownership
Channel ownership brings with it total control over distributor activities and establishes a corporate vertical marketing system. By purchasing retail outlets, producers control their purchasing, production and marketing activites
Define and discuss the factors that affect channel management
- Selection: Identification of potential channel members and development of selection criteria
- Motivation: Selected members should be motivated to ensure the distibution of adequate resources is provided to producer lines.
- Training: Ensure all members are equipped and trained for the intensity of the distribution.
- Evaluation: Evaluating members to access keeping or dropping them.
- Managing conflict: Ensure conflict can be resolved without damaging the producer line.
What factors affect key retailing marketing decisions
What are the Components of physical distribution
- Customer service
- Order processing
- Inventory control
- Warehouse
- Transportation
- Materials handling
