Marketing chapter 15a managing marketing channels wholesalers

Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems.. FIGURE 15-4 Common marketing channels for consumer of

LO1 Explain what is meant by a marketing

channel of distribution and why intermediaries are needed.

Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems.

LO2

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:

LO3 Describe the factors and

considerations that affect a company’s choice and management of a marketing channel.

Recognize how conflict, cooperation, and legal considerations affect

marketing channel relationships.

LO4

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO:

FIGURE 15-1 The variety of terms used

for marketing intermediaries that vary in

specificity and use in consumer and

business markets

FIGURE 15-2 Intermediaries minimize

transactions and the cost of distribution for

producers and customers

NATURE AND IMPORTANCE OF

FIGURE 15-3 Marketing channel

intermediaries perform three functions, each

consisting of different activities

CHANNEL STRUCTURE & ORGANIZATION

MARKETING CHANNELS FOR CONSUMER GOODS AND SERVICES

FIGURE 15-4 Common marketing channels

for consumer offerings by the kind and

number of intermediaries

CHANNEL STRUCTURE & ORGANIZATION

MARKETING CHANNELS FOR BUSINESS GOODS AND SERVICES

FIGURE 15-5 Common marketing channels

for business offerings by the kind and

number of intermediaries

FIGURE 15-6 Consumer electronic

marketing channels are similar to those for

consumer and business offerings

CHANNEL STRUCTURE & ORGANIZATION

DUAL DISTRIBUTION &

STRATEGIC CHANNEL ALLIANCES

LO2

 Dual Distribution

 Strategic Channel Alliances

FIGURE 15-7 Functions performed by

independent wholesaler types

CHANNEL STRUCTURE & ORGANIZATION

 Specialty Merchandise (Limited-Line) Wholesalers

CHANNEL STRUCTURE & ORGANIZATION

 Cash and Carry Wholesalers

 Drop Shippers/Desk Jobbers

CHANNEL STRUCTURE & ORGANIZATION

CHANNEL STRUCTURE & ORGANIZATION

VERICAL MARKETING SYSTEMS

CHANNEL STRUCTURE & ORGANIZATION

VERICAL MARKETING SYSTEMS

 Manufacturer-Sponsored Wholesale Systems

 Service-Sponsored Retail Franchise Systems

CHANNEL STRUCTURE & ORGANIZATION

VERICAL MARKETING SYSTEMS

LO2

 Administered Systems

 Channel Partnership

FIGURE 15-8 Three types of vertical

marketing systems: corporate, contractual

(most popular), and administered

CHANNEL CHOICE AND MANAGEMENT

CHANNEL CHOICE CONSIDERATIONS

LO3

 Target Market Coverage

Retail Store Distribution

CHANNEL CHOICE AND MANAGEMENT

FIGURE 15-9 The Clayton Act and Sherman

Act place legal restrictions on specific

marketing channel strategies and practices

Marketing Channel

A marketing channel consists

of Individuals and firms involved

in the process of making a

product or service available for

use or consumption by consumers

or industrial users

Industrial Distributor

An industrial distributor is an

intermediary that performs a

variety of marketing channel

functions, including selling,

stocking, delivering a full product

assortment, and financing

Electronic Marketing Channels

Electronic marketing channels

employ the Internet to make

goods and services available for

consumption or use by consumers

or business buyers

Direct Marketing Channels

Direct marketing channels

allow consumers to buy products

by interacting with various

advertising media without a

face-to-face meeting with a

salesperson

Multichannel Marketing

Multichannel marketing involves

the blending of different

communication and delivery channels that are mutually reinforcing in

attracting, retaining, and building

relationships with consumers who

shop and buy in traditional

intermediaries and online.

Dual Distribution

Dual distribution involves an

arrangement whereby a firm

reaches different buyers by

employing two or more different

types of channels for the same

basic product

Strategic Channel Alliances

Strategic channel alliances is a

practice whereby one firm’s

marketing channel is used to sell

another firm’s products

Merchant Wholesalers

Merchant wholesalers are

independently owned firms that

take title to the merchandise

they handle

Manufacturer’s Agents

Manufacturer’s agents are

agents who work for several

producers and carry

noncompetitive, complementary

merchandise in an exclusive

territory Also called

manufacturer’s representatives.

Selling Agents

Selling agents are agents who

represent a single producer and

are responsible for the entire

marketing function of that

producer

Brokers are independent firms

or individuals whose principal

function is to bring buyers and

sellers together to make sales

Vertical Marketing Systems

Vertical marketing systems

are professionally managed and

centrally coordinated marketing

channels designed to achieve

channel economies and

maximum marketing impact

Franchising involves a contractual

arrangement between a parent

company (a franchisor) and an

individual or firm (a franchisee) that

allows the franchisee to operate a

certain type of business under an

established name and according to

specific rules.

Channel Partnership

A channel partnership consists

of agreements and procedures

among channel members for

ordering and physically distributing

a producer’s products through the channel to the ultimate consumer

Intensive Distribution

Intensive distribution is a level

of distribution density whereby a

firm tries to place its products and services in as many outlets as

possible

Exclusive Distribution

Exclusive distribution is a level

of distribution density whereby

only one retail outlet in a specific

geographical area carries the

firm’s products

Selective Distribution

Selective distribution is a level

of distribution density whereby a

firm selects a few retail outlets in a specific geographical area to carry its products

Channel Conflict

Channel conflict arises when

one channel member believes

another channel member is

engaged in behavior that

prevents it from achieving its

goals

Disintermediation involves

channel conflict that arises when

a channel member bypasses

another member and sells or

buys products direct

Channel Captain

A channel captain is a channel

member (producer, wholesaler,

or retailer) that coordinates,

directs, and supports other

channel members