Place Flashcards
1
Q
What is a channel structure?
A
- A marketing channel can be defined as the structure linking a group of individuals or organisations through which a product or service is made available to the consumer or user.
- Degree of relationships can vary between parties for example buyers and sellers on FB v supermarkets and manufacturers.
- The ROUTE selected to move a product to a market through different intermediaries is known as the CHANNEL STRUCTURE.
2
Q
What are the 4 consumer good channel structures?
A
- Producer –> consumer = Direct supply
- Producer –>retailer –> consumer = Short channel
- Producer –> wholesaler –> retailer –> consumer = Long channel
- Producer –> agent –> wholesaler –> retailer –> consumer
3
Q
What is direct supply
A
- Manufacturer and consumer deal directly with each other.
- Many ways of this taking place – personal selling, retail selling, direct mailing, online etc.
- Eliminates the need for intermediaries.
4
Q
What is short channel distribution?
A
- Most popular with large retailers.
- Buy in large quantities, obtain special prices.
- Direct relationships between Manufacturer and Retailers.
5
Q
What is long channel distribution?
A
- Useful for smaller manufacturers and smaller retailers.
- Don’t have the resources to access a wide range of customers or manufacturers.
- Wholesaler does both for each party.
- Buys in bulk from the manufacturers and then splits that up for retailers all under one roof.
- Provides a wider range of retailers for smaller manufacturers too.
- Wholesaler is effectively marketing on the behalf of the manufacturer.
6
Q
What is producer –> agent –> wholesaler –> retailer –> consumer distribution?
A
- Longest and most indirect channel.
- Maybe an unknown market – use an agent that knows it better, for example if looking to expand internationally, export goods etc.
- Agent earns commission.
- Manufacturer is dependent upon the Agent -Relationship Marketing is key!
7
Q
What are the 4 B2B channel structures?
A
- Manufacturer –> user
- Manufacturer –> distributor –> user
- Manufacturer –> agent –> user
- Manufacturer –> agent –> distributer –> user
8
Q
What is the Manufacturer –> user?
A
- Direct channel – most appropriate where the goods sold have a high unit cost and high technical content.
- Small number of buyers.
- Manufacturer manages their own sales and distribution teams to negotiate sales, provide service and administration.
- For example, plastic manufacturers who deal directly with car manufacturers
9
Q
What is the Manufacturer –> distributor –> user?
A
- Less direct channel.
- Like the short channel in the Consumer Goods channels.
10
Q
What is the Manufacturer –> agent –> user?
A
- Agents are sometimes used where direct entry isn’t viable – expensive, lack of expertise in the market etc.
- Commission basis – exchange process.
- Agent acts on behalf of the client.
- Manufacturer to Agent to Distributor to User.
- In fast moving export markets * Multiple channels of distribution.
- Agent coordinates sales and distributors provide stock and premises close to the customer.
- Allows more market segments to be reached.
11
Q
What is the Manufacturer –> agent –> distributer –> user?
A
- In fast moving export markets.
- Multiple channels of distribution.
- Agent coordinates sales and distributors provide stock and premises close to the customer.
- Allows more market segments to be reached.
12
Q
What are the components of rational?
A
- MONEY – every transaction costs money.
- COSTS - delivery costs, order packing costs, marketing costs, admin costs and so on.
Intermediary increases efficiency and reduces the cost of individual transactions.
13
Q
What are the categories of adding value by using an intermediary?
A
- Facilitating value
- Transactional value
- Logistical value
14
Q
What is Facilitating value?
A
- Financing
- Training
- Information
- After sales
15
Q
What is Transactional value?
A
- Risk
- Marketing
- Administration
