Class Notes (839,460)
Canada (511,348)
MGTA02H3 (143)
H Laurence (21)
Lecture

MGTA04 Chapter 9.docx

4 Pages
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Department
Management (MGT)
Course Code
MGTA02H3
Professor
H Laurence

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Description
The Distribution Mix  Distribution mix: the combination of distribution channels a firm selects to get a product to end users Intermediaries and Distribution Channels  intermediary: individual or firm other than the producer who participates in a products distribution  wholesalers: intermediaries who sell products to other businesses, which in turn resell to the end users  retailers: intermediaries who sell products to end-users  Distribution of consumer products: a distribution channel is the path a product follows from the producer to the end user o Direct distribution of consumer products: direct channel, the product travels from the producer to the consumer without passing through any intermediary i.e. AVON o Retail Distribution of Consumer Products o Wholesale distribution of consumer products: i.e. non-direct distribution needing large space wholesalers store merchandise and restock it frequently o Distribution through sales agents or brokers Sales agent/broker: an independent business person who represents a business and receives a commission in return but never takes legal possession of the product o Pros and Cons of Non-direct distribution:  Higher prices due to more intermediaries who make profit  Intermediaries provide added value by saving consumers both time and money  Intermediaries exist because provide time-saving information and make the right quantities of products available where and when you need them  they do necessary jobs in cost-efficient ways Distribution Strategies  Intensive distribution: a distribution strategy in which a product is distributed un nearly every possible outlet, using many channels and channel members  Exclusive distribution: a distribution strategy in which a products distribution is limited to only one wholesaler or retailer in a given geographic area  Selective distribution: a falls between intensive and exclusive distribution, calling for the use of a limited number of outlets for a product Wholesaling  Merchant wholesaler: an independent wholesaler that buys and takes legal possession of goods before selling them to customers full service merchant wholesaler provides credit, marketing, and merchandising services, limited function merchant wholesalers provide only a few services and sometimes merely storage (customers are normally small operations that pay cash and pick up their own goods)  Agents and brokers, including internet e-agents serve as sales forces for various manufacturers and are independent reps of many companies products  they work on commission and they do not take title of the merchandise. Value of agent depends on their knowledge of markets and their merchandising expertise, they also provide a wide variety of services such as shelf and display merchandising and advertising layout they also maintain product saleability by removing open, torn, or dirty packages, arranging them neatly and generally keeping them attractively displayed Retailing  Most retailers are small operations, often consisting of just the owners and part-time help but there are few very large retailers and these accounts for billions of dollars of sales each year in Canada  Retail operations in Canada are classified by size, pricing strategies, location range of services, product lines, etc  Product Line Retailers: feature broad product lines including department stores: large retail stores that offer a wide variety of high-quality items divided into specialized deparments and supermarkets: large retail stores that offer a variety of food and food-related items divided into specialized departments  Specialty Stores: small retain stores that carry one line of related products  Bargain Retailers: retail outlets that emphasize low prices as a means of attracting customers o Discount houses: bargain retail stores that offer major items such as TV’s and large appliances at discount prices o Catalogue show room: bargain retail store in which customers place orders for items described in a catalogue and pick up those items from an on-premises warehouse o Factory outlets: bargain retail stores that are owned by the manufacturers whose products they sell o Warehouse club/wholesale club: huge, membership only, combined retail-wholesale operations that sell brand name merchandise o Convenience stores: retail stores that offer high accessibility, extended hours, and fast service on selected items Non-store and Electronic Retailing  Not all goods and services are sold in stor
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