pipeline through which products, their ownership, communication, financing and payment flow to the customer.
Marketing Channel Function
1. specialization and division of labor
2. overcoming discrepancies (of quantity, assortment, time ans space)
3. providing contact efficiency- cutting the # of transactions required to get products to consumers
Division of Labor
businesses that specialize in delivery, marketing, financing, etc. and provide the service for another company
*4 Discrepancies Channels Must Overcome:
*Discrepancy of Quantity
difference between the amount of product produced and the amount an end user wants to buy.
*Discrepancy of Assortment
the lask of all the items a customer needs to receive full satisfaction from a product.
Example of Discrepancy of Assortment
for pancakes to provide max satisfaction, several other products are required to complete the assortment (knives, plate, fork, butter, syrup).
to over come discrepancies of assortment, marketing channels assemble in one place many of the products necessary to complete a consumer's need assortment
a situation that occurs when a product is produced but a customer is not ready to buy it.
the difference between the location of a producer and the locatin of widely scattered markets
2. merchant wholesaler
3. agents and brokers
a channel intermediary that sells mainly to customers
an institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them.
*Agents and Brokers
wholesaling intermediaries who facilitate the sale of a product by representing channel members
*3 Functions of Intermediaries:
1. contacting/promotion (hot deals)
3. risk taking
1. physically distributing
process of managing the efficient flow of storage of goods from point of origin to consumption
*Channels for Consumer Products
1. direct channel
2. retailer channel
3. wholesaler channel
4. agent/broker channel
used to sell products directly to consumers w/o any intermediaries (i.e. telemarketing, on-line shopping).
Most consumer products are sold through the ___ and ___ distribution channels.
Alternative Channel Arrangements
1. multiple channels
2. nontraditional channels
3. strategic channel alliances
aka dual-distribution. a company using multiple distribution channels.
internet, mail-order channels. help differentiate a firms product from the competition
Strategic Channel Alliances
producers use another manufacturer's already-established channel (ex. red bull has budweiser ship thier case)
Factors Affecting Channel Choice:
1. market factors
2. product factors
3. producer factors
Market Factors Affecting Channel Choice
1. customer profiles
2. consumer or industrial customer
3. size of market (large market requires more intermediaries)
4. geographic location
Product Factors Affecting Channel Choice
1. product complexity
2. product price
3. product standardization
4. product life cycle
5. product delicacy
Products that are complex, customized and expensive benefit from ____ marketing channels.
1. producer resources
2. number of products
3. desire for channel control
*Levels of Distribution Intensity
aimed at having a product available at every outlet. many intermediaries (i.e. coke)
screens dealers to eliminate all but a few in any single area , several intermediaries. (i.e. android phone). usually higher priced items.
establishes one or a few dealers within a given area, one intermediary. (i.e. gucci bags)
fight between intermediaries
intermediaries that have conflict are on the same level (MC ginsberg vs Costco in Omega watch example)
intermediaries in conflict are on separate levels (i.e. Apple being sued by retailers b/c they opened Apple stores and gave them special orders of new products)
joint effort of all channel members to create a supply chain that serves customers and creates a CA
Global Channel Development
1. channel structure and type differ
2. gray marketing channels
*Gray Marketing Channel
authorized retailers sell products to unauthorized retailers. as a result, producers have said they aren't upholding the warranty if you buy from the unauthorized retailer.