marketing lecture 8 (place) Flashcards
marketing channels
or channel of distribution –> individuals or firms that are involved in the process of making a product or service available for use or consumption for customers or industrial users
channel members is called
market intermediaries
terms for market intermediaries
- middleman –> any intermediary that comes in between manufacturers and end-users markets
- agent or broker –> any intermediary with legal authority acting on behalf of the manufacturer
- wholesaler –> an intermediary that sells to another intermediary, usually to retailers; usually acts on the consumer market
- retailers –> an intermediary that sells to customers
- distributors –> an impresice term –> intermediaries that performs distribution functions; acts on business market but can refer to wholesalers
- dealers –> a more imprecise term than distributor, same meaning as distributor, wholesaler, retailer, etc
functions performed by the intermediaries
- transactional functions
- logistical functions
- facilitating functions
transactional functions
- buying : buying inventory for resale or as an agent for supply of a product
- selling : contacting potential customers, seek orders, and promoting the product
- risk taking : assuming business risks of ownership as inventory can become obsolete or deteriorate
logistical functions
- assorting : make product assortments from several sources to serve customers
- storing : keeping and protecting products in a convenient place to offer better customer service
- sorting : order products in huge amounts and then breaking them down to smaller amount desired by customers
- transporting : physically moving the products to customers
facilitating functions
- financing : extending credits to customers
- grading : inspecting, testing, and judging products and assigning them quality grades
- marketing information and research : providing information to suppliers and customers, as well as about competitive conditions and trends
direct vs indirect marketing channels
direct : a producer and customer interact directly with each other
indirect : intermediaries in between the customer and producers
ex : producer –> agent –> wholesaler –> retailer –> customer
types of marketing channels
- digital marketing channels
- direct-to-customer marketing channels
- dual distribution
digital marketing channels
- advancement of electronic commerce allows new avenues for reaching buyers and creating customer value
- combine the internet and traditional intermediaries to create time, place, form, and possession utility for buyers
- cheaper than traditional intermediaries because of information technology efficiency
direct-to-customers marketing channels
allows customers to buy product by interacting with various advertising media without direct face-to-face interactions with a salesperson
dual distribution
a firm reaches different buyers by employing 2 or more types of channels for product distribution
vertical marketing system (VMS)
a coordinated distribution system where manufacturers, wholesalers, and retailers work together as a unified system to increase sale and distribution of products
- the goal of a VMS is to increase efficiency, reduce costs, and enhance customer satisfaction by integrating various levels of distribution channels
key types of VMS
- corporate VMS –> one single firm owns multiple distribution channels
- contractual VMS –> multiple firms on different distribution levels works together on a contractual agreement to coordinate their activities
- administered VMS –> one distribution channel exerts more power than others without ownership or contractual agreements
3 questions marketers ask before choosing a channel or intermediaries
- which will give the best coverage of target market ?
- which will be most profitable?
- which will best fulfill the buying requirements of target market?
