Chapter 21

Channels of Distribution vocabulary.
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Terms in this set (...)

Channel of Distribution
the path a product takes from its producer or manufacturer to the final user.
Intermediaries
aKA middle men, businesses involved in sales transactions that move products from the manufacturer to the final user.
Wholesalers
are businesses that buy large quantities of goods form manufacturers, store the goods, and then resell them to other businesses.
Rack Jobbers
wholesalers that manage inventory and merchandising for retailers by counting stock, filling it in when needed, and maintaining store displays.
Drop Shippers
own the goods they sell but do not physically handle the actual products.
Retailers
sell the goods to the final consumer for personal use.
Brick and Mortar Retailers
traditional retailers; sell goods to the consumer from their own physical stores.
E-tailing
Online retailing, involves retailers selling products over the Internet to the customer.
Agents
act as intermediaries by bringing buyers and sellers together.
Manufacturers' Representatives
work with several related manufacturers in a specific industry.
Brokers
main goal is to bring buyers and sellers together in order for a sale to take place.
Direct Distribution
occurs when the producer sells goods or services directly to the customer, with no intermediaries.
Indirect Distribution
involves one or more intermediaries.
Channel A
is direct distribution. Methods include selling where products are made, home calls, catalogs, phone calls, and online.
Channel B
manufacturer to retailer to consumer. Mostly used for products that will go out of date fast.
Channel C
manufacturer to wholesaler to retail to consumer. Used for necessary items and staple goods.
Channel D
manufacturer to agents to wholesaler to retailer to consumer. Mostly used with manufacturers that concentrate on production, leave sales to others.
Channel E
manufacturer to agents to retailer to consumer. Used with manufacturers who don't want to handle sales.
Exclusive Distribution
involves protected territories for distribution of a product in a given geographic area. Mostly used for prestige, image, channel control, and high profit margins. Ex. franchises.
Integrated Distribution
variation on exclusive distribution, manufacturer acts as wholesaler and retails own products. Ex. Gap Outlets.
Selective Distribution
limited number of outlets in a given geographic are are used to sell the product. Goal is for channel members to maintain image of product. Ex. clothing lines at department stores.
Intensive Distribution
involves the use of all suitable outlets to sell a product. Goals is complete coverage of market and to sell product where ever possible. Ex. motor oil.
E-marketplace
online shopping location for e-tailing.