Term
| Marketing channels (functions and activities) |
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Definition
Functions:
specialization and division of labor
creates greater efficiency
provides lower production costs
create time, place, form and exchange utility
overcoming discrepancies
providing contact efficiency
retailers simplify distribution by cutting the number of transactions required by consumers, making an assortment of goods available in one location (think places like: Kohl’s, Wal-Mart, Best Buy, etc.) |
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Term
| Channel intermediaries (functions and activities) |
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Definition
Merchant Wholesalers - buys goods from manufacturers, takes title of goods, stores them, and resells and ships them
Agents and Brokers - wholesaling intermediaries who facilitate the sale of a product by representing channel members ; DO NOT take title to goods
Factors suggesting type of wholesaling intermediaries to use
product characteristics
buyer consideration
market characteristics |
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Term
| Common Channel Structures |
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Definition
| consumer products; business and industrial products; Alternative channel arrangements. |
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Term
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Definition
consumer products
direct channel - Producer → consumer
Retailer channel - Producer → retailer → consumer
Wholesaler Channel - Producer → wholesaler → retailer → consumer
Agent/broker channel - producer → agents or brokers → wholesaler → retailer → consumer |
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Term
| business and industrial products |
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Definition
business and industrial products
direct channel - Producer → industrial user
Industrial distribution - Producer → Industrial distribution → industrial user
Agent/broker channel - producer → agents or brokers → industrial user |
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Term
| Alternative channel arrangements |
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Definition
Alternative channel arrangements
dual (multiple) distribution - the use of two or more channels to distribute the same product to target markets
strategic channel alliances - a cooperative agreement between business firms to use the other’s already established distribution channel
nontraditional channels - non-physical (often electronic) channels that facilitate the unique market access of products and services |
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Term
| Factors affecting Channel choices |
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Definition
| Market factors; Product factors; Producer factors. |
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Term
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Definition
include the target customer considerations such as q’s: who are the potential customers? what/where/when/how do they buy?
customer profiles
consumer or industrial customer
size of market
geographic location |
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Term
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Definition
products that are more complex, customized, and expensive benefit from shorter and more direct marketing channels and through a direct sales force.
product complexity
product price
product standardization
product life cycle
product delicacy |
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Term
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Definition
producers with larger financial, managerial, and marketing resources are able to use more direct channels.
producer resources
number of product lines
desire for channel control |
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Term
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Definition
Intensive distribution - a form of distribution aimed at having a product available in every outlet where target customers might want to buy
selective distribution - a form of distribution achieved by screening dealers to eliminate all but a few in any single area
exclusive distribution - a form of distribution that establishes one or a few dealers within a given area |
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