MKTG101 Lecture Notes - Lecture 10: Direct Selling, Direct Marketing
Chapter 10 (Distribution)
Channels of distribution are distinctive and important because they :
•are relatiel edurig ad ifleile (longer than product life cycles) •tpiall iole
independent but interdependent orgaisatio •Coflit V. Cooperatio Paradigs
•also iole the ustoer as a atie partiipat •are a ajor etr arrier ad
deteriat of profit •are ietrial liked to ustoer serie •are a ke drier of
marketplace changes (linked to technological change)•are a potential source of a
sustaiale opetitie adatage
Marketing channels
• Marketing intermediaries are individuals or organisations that act in the distribution
chain between the producer and the end user (e.g. industrial buyers, wholesalers,
agents and brokers and retailers).
• The distribution channel involves a group of individuals and organisations directing
products from producers to end users.
• Effective intermediaries in marketing channels achieve the following:
• Time utility: Making products available at the time the consumer wants to purchase
them
• Place utility: Making products available in the locations that the consumer wants
them
• For utilit: Custoisig produts to the osuers partiular eeds • Possessio
utility: facilitating purchasing, payment and ownership.
• Exchange efficiencies: Making transactions as simple and cheap as possible by
establishing and managing efficient exchange processes.
Types of Intermediaries
• Merchants (take title and negotiate sales)
• Wholesalers
• Retailers
• Agents (negotiate sales but do not take title)
• Brokers (short term, one off),
• Representative Agents
• Facilitators (neither take title nor negotiate sales, but still perform ancillary
functions)
• Transport Companies
• e-fulfilment Specialists
• Finance Intermediaries
• Warehousers
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Types of intermediaries: merchants (take title and negotiate sales, wholesalers, retailers, agents (negotiate sales but do not take title, brokers (short term, one off), representative agents, facilitators (neither take title nor negotiate sales, but still perform ancillary functions) Managing marketing channels based on ongoing partnerships among marketing channel members that reduce costs, eliminate redundant processes and develop new ways to deliver value to customers. When one member of the marketing channel can exert power over the ability of other members to achieve goals, that member is known as the channel captain, and has channel power. Channelconflict: the (cid:373)ore parties i(cid:374)(cid:448)ol(cid:448)ed i(cid:374) a (cid:373)arketi(cid:374)g channel, the greater the potential for conflict. Managing channel relationships: sources of channel power: coer(cid:272)i(cid:448)e, legiti(cid:373)ate, e(cid:449)ard, e(cid:454)pert, efere(cid:374)t. Retailing: any exchange in which the buyer is the ultimate consumer of the product, retailing excludes transactions in which the buyer intends to resell the product or use it in the making of another product.
