Chapter 13 Managing Marketing Channels and Supply Chains
* Nature and Importance of Marketing Channels: Reaching potential buyers, either directly or indirectly, is a necessary first step for successful marketing. * What is a Marketing channel of Distribution?: Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. Marketing channels make possible the flow of goods from a producer, through intermediaries, to a buyer. * Value created by Intermediaries:
* Middleman: Any intermediary between manufacturer and end-user markets. * Agent or broker: any intermediary with legal authority to act on behalf of the manufacturer. Wholesaler: an intermediary who sells to other intermediaries, usually to retailers; term us
* ually applies to consumer markets.
* Retailer: an intermediary who sells to consumers
* Distributor: an imprecise term, usually used to describe intermediaries who perform a variety of distribution functions, including selling, maintaining inventories, extending credit, and so on; a more common term in business markets but may also be used to refer to wholesalers * Dealer: a more imprecise term than distributor that can mean the same as distributor, retailer, wholesaler, and so forth * Functions performed by intermediaries: Intermediaries make possible the flow of products from producers to ultimate consumers by performing three basic functions Types of Functions:
* Transaction Function:
* Buying: purchasing products for resale or as an agent for supply of a product * Selling: Contracting potential customers, promoting products, and seeking orders * Risk taking: Assuming business risks in the ownership of inventory that can become obsolete or deteriorate * Logistical function:
* Assorting: Creating products assortments from several sources to serve customers * Storing: assembling and protecting products at a convenient location to offer better customer service * Sorting: purchasing in large quantities and breaking into smaller amounts desired by customers * Transporting: physically moving a product to customers * Facilitating Function:
* Financing: Extending credit to customers
* Grading: Inspecting, testing, or judging products, and assigning them quality grades * Marketing information and research: providing information to customers and suppliers, including competitive conditions and trends * Customer Benefits from Intermediaries: Consumers also benefit from intermediaries. Having the goods and services you want, when you want them, where you want them, and in the form you want them is the ideal result of marketing channels. * Channel Structure and Organization: A product can take many routes on its journey from a producer to buyers, and marketers, search for the most effective route from the many alternatives available. * Marketing Channels for Consumer Goods and Services: A direct channel when the producer sells directly to the consumer. Basically a producer and ultimate consumer deal directly with each other. Because there are no intermediaries with a direct channel, the producer must perform all the channel functions Indirect channels are when intermediaries are inserted in between the producer and consumer and perform numerous channel functions. * Marketing Channels for Business Goods and Services: Firms that sell directly from producer to industrial user maintain their own sales force and perform all channel functions. Indirect channels are when producers firms must work with either an industrial distributor then to the final industrial user, or going through an agent first or both. * Electronic Marketing Channels: Interactive electronic technology has made possible electronic marketing channels, which employ the Internet to make goods and services available to consumers or...
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