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Lecture 6

MKT 304 Lecture Notes - Lecture 6: Kroger, Direct Marketing

Course Code
MKT 304
Matthew Wilson

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Channel Organization
Marketing channels are also known as distribution channels, are a set of interdependent
organizations that help make a product or service available to buyers.
Upstream vs. Downstream
Upstream: firms that supply the raw materials
Downstream: marketing channel members that link the firm to the customer
In marketing we typically focus on downstream channel members.
Channel levels:
The number of intermediary partners indicates the length of a channel
Direct marketing channels (no intermediaries)
o Product consumer
Indirect marketing channels (one or more intermediaries)
o Producer WholesalerRetailer Consumer
Channel members perform two main categories of functions.
Transaction completion involves getting marketers to the point of sale.
Transaction fulfillment involves fulfilling the agreement.
Transaction Completion:
Info gathering: gather and distribute market research
Promotion: develop and spread persuasive communications
Contract Buyers: find and communicate with buyers
Matching: shaping and fitting orders to buyers needs
Negotiation: reaching an agreement terms of the sale
Transactional Fulfillment
Physical distribution: transporting and sorting goods
Financing: acquiring and using funds to cover costs of exchange
Risk taking: assuming the risk of carrying out the channel work
Channel members should partner together to deliver customer value.
Conventional: one or more independent organizations. E.g. clothing/consumer goods.
-corporate: single ownership of multiple levels. Ex.) Sherman Williams, Kroger
-contractual: independent firms join together under contract. Ex.) car dealerships.
-administered: this is where we get leadership that is assumed, usually because of size.
(power) they basically run the channel. Ex.) Walmart
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