L18 Managing marketing channels and supply chains
Terms in this set (30)
- Flow of products and services from a producer, through intermediaries, to a buyer.
- Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
Intermediary between manufacture and end-user markets
Agent / broker
Intermediary with legal authority to act on behalf of the manufacturer
Intermediary who sells to other intermediaries; retailers for end-user sale
Intermediary who sells to consumers
Intermediary who act on distribution functions ; selling, maintaining inventories, extending credit
Informal term for distributor, retailer, wholesaler
4 Intermediary functions
1. Transactional function
2. Logistical function
3. Facilitating function
4. Consumer benefits
3 factors: Transactional function
> Buying: Purchasing products for resale or as an agent for supply of a product.
> Selling: Contacting potential customers, promoting products, and seeking orders.
> Risk taking: If the stock is unsold for any reason, the intermediary suffers the loss
4 factors Logistical function
> Assorting: product assortments from several sources
> Storing: products at a convenient location.
> Sorting: Purchasing in large quantities and breaking into smaller amounts desired by customers.
> Transporting: Physically moving a product to customers.
3 factors Facilitating function
> Financing: Extending credit to customers.
> Grading: Inspecting, testing, or judging products and assigning them quality grades.
> Marketing information and research: information to customers and suppliers/ competitive conditions and trends.
4 factors Consumer benefits
> Time utility: delivering when consumers want it.
> Place utility: available where consumers want it.
> Form utility: involves enhancing a product/service to make it more appealing to buyers.
> Possession utility: help buyers take possession; airline tickets delivered by a travel agency
3 types of marketing channels
1. Consumer products and services
2. Business products and services
3. Internet marketing channels
Direct marketing channels
Consumers buy products by interacting with various advertising media without face-to-face.
- mail-order selling,
- catalogue sales,
- televised home shopping.
Blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers.
Multichannel marketing seeks to integrate a firm's electronic marketing and delivery channels.
3 Factors Affecting Channel Choice and Management
1. TARGET MARKET COVERAGE
2. BUYER REQUIREMENTS
TARGET MARKET COVERAGE
3 Degrees of distribution density exist
1. Intensive distribution
2. Exclusive distribution
3. Selective distribution
- Placing products/services in as many outlets as possible.
- Usually chosen for convenience products or services such as candy, fast food, newspapers, and soft drinks.
- Only one retailer in a specific geographical area carries the firm's products.
- Specialty products/services, luxury
- Between these Intensive and Exclusive
- Few retailers in a specific geographical area to carry products.
4 categories of consumer interest
4. Pre or Post sales services
Intermediaries communicate with buyers through in-store displays, demonstrations, and personal selling.
Proximity or driving time to a retail outlet.
Interest in having numerous competing and complementary items from which to choose.
Pre or Post sales services
Provided by intermediaries are an important buying requirement for products such as large household appliances that require delivery, installation, and credit.
Determined by the margins earned (revenue minus cost) for each channel member and for the channel as a whole.
- Inc Channel Cost: distribution, advertising, selling expenses, shared across channel members
Two types of conflict occur in marketing channels
1. Vertical conflict:
between different levels in a marketing channel
2. Horizontal conflict:
between intermediaries at the same level in a marketing channel
Job of the channel captain
Coordinates, directs, and supports other channel members.
Firms involved in performing the activities required to create and deliver a product or service to consumers.
Begins with raw materials, ands in a final product sale
3 steps of Marketing strategy and Supply chain alignment
1. Understand the customer
understand needs, low price, convenience
2. Understand the supply chain
design, response to customers, efficiency
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