COMM 223 Lecture Notes - Lecture 7: Direct Market, Walmart, Vertical Integration
Document Summary
Apple, toshiba and dell make and sell laptop and desktop computers. Without them, company might be able to reduce distribution costs, if the supermarket can perform these functions more efficiently than a wholesaler, but the supermarket"s inventory costs may increase, making no savings and less efficient. Value-added marketing channels: reduce transaction costs, transactional functions buying/selling/risk-taking, logistical functions assortments/warehousing/transporting, facilitating functions financing/market info. Type of transaction they prefer (in person, phone, mail, online) Do they value assortment breadth? (wal-mart & sears vs. apple store) How much add-on service do customers require? (instructions, professional assembly: setting channel objectives. Minimizing the cost of meeting customer service requirements: channel structure. Types of channel structures: direct without intermediaries. Advantages: greater control, lower cost, direct contact with customer needs, internet makes direct distribution easier: indirect with intermediaries (retailers and/or wholesalers, hybrid/mixed. Advantages of multi-channel structure: gain opportunities to tailor its products and services to specific needs of diverse customer segments.
