Marketing channels, distribution and retailing Flashcards
Define marketing channel (distribution channel)
set of interdependent organizations that handle products (movement of the product ex: producer to business to consumer
Define retailing
process of selling goods or services directly to consumers. It encompasses (englobe) all activities involved in selling products to the FINAL CONSUMER
What functions do intermediaries perform (Channel members)?
business or entities that facilitate the movement of products from manufacturers to consumers.
Types of intermediaries
Wholesalers
Agents
Brokers
Reatailers
What’s a wholesaler
buy products in bulk and sell them to retailers. Provide storage, break down bulk quantities, handle logistics. (Costco acts as a wholesaler by selling products in bulk to small businesses and consumers at discounted prices (discounts))
What are Agents
Work on behalf (au nom de) of manufacturers or buyers, negotiating sales and managing relationships. Earn commission doesn’t own the product they sell.
(An agent represents authors in the publishing industry, negotiating book deals with publishers on behalf of their clients. They earn a commission from book sales and provide expertise and connections to help authors secure contracts.)
What are brokers
Temporary intermediaries who connect buyers and sellers for specific transactions.
(A real estate broker connects home buyers with sellers, facilitating transactions and negotiations.)transactions.
What’s a retailer
sell products directly to the consumers for personal use. Provide customer service etc. (Walmart is a well-known retailer that buys a wide variety of products from manufacturers or wholesalers)
Factors influencing the choice of a channel (intermediaries)
product Characteristics: Perishable items may need faster channels, while luxury goods may require exclusive distribution.
Market Characteristics: Larger and more dispersed target markets may need more intermediaries for widespread reach.
Company Resources and Capabilities: A company with a strong distribution network might opt for direct channels, while smaller businesses may rely on intermediaries.
Competitor Strategies: The channels used by competitors can impact the company’s choice to align with industry standards or to differentiate.
Customer Preferences: Some customers prefer to shop in-store, while others prefer online channels, influencing distribution decisions.
Level of distribution intensity
Intensive Distribution: Products are made available in as many outlets as possible.
Example: Soft drinks like Coca-Cola, available in supermarkets, vending machines, and gas stations.
Selective Distribution: Products are sold in select outlets to maintain a certain brand image and ensure quality control.
Example: Designer clothing brands like Calvin Klein available in select department stores.
Exclusive Distribution: Products are sold through a single retailer or dealer in a particular area.
Example: High-end luxury cars like Ferrari sold at exclusive dealerships.
Type of retail store
Department Stores: Large stores with a wide range of products organized into departments.
Example: Macy’s
Specialty Stores: Focus on a specific product category.
Example: Foot Locker
Supermarkets: Large, self-service grocery stores.
Example: Walmart
Discount Stores: Offer products at lower prices.
Example: Dollar Tree
Convenience Stores: Small stores offering basic goods, often open late.
Example: 7-Eleven
Online Retailers: Sell products exclusively through an online platform.
Example: Amazon
Type of non-store retailing
E-commerce: Buying products online.
Example Purchase: Clothing on Amazon.
Direct Selling: Sales made directly to consumers, often at home.
Example Purchase: Beauty products through Mary Kay.
Telemarketing: Selling products via phone calls.
Example Purchase: Magazine subscriptions purchased over a call.
Retailing mix example of H&M
Product: Trendy, affordable fashion for all ages and home items.
Price: Competitive, budget-friendly with frequent sales.
Place: Global presence in malls, high streets, and online.
Promotion: Uses social media, influencer marketing, and eco-friendly Conscious Collection.
Presentation: Minimalist, organized layout focusing on trends.
People: Friendly staff providing style advice and customer service.
