MGMT 1 Lecture 21: MGMT 1 notes
Paul Merage School of Business
MGMT 1
Intro to Business Management
4 units
No Pre-reqs
Course code: 38001
tuesday/thursdays 9:30-10:50
Location:SB1 1200
Final: Thursday of finals week
Course Notes
❖ Direct Marketing – any activity that directly links manufacturers or intermediaries with
the ultimate consumer
➢ Fastest growing type of retailing: includes direct mail, catalog sales, and
telemarketing as well as online marketing.
➢ Popular companies that use this: Coldwater Creek, L.L. Bean, Lands’ End.
➢ Has become more popular because shopping from home is more convenient for
consumers than going to stores.
➢ Interactive online selling is expected to provide increasing competition for retail
stores.
➢ Direct marketing took on a new dimension with interactive video- producers now
provide all kinds of information on websites and reach out to customers online.
➢ To offer consumers the maximum benefit, marketing intermediaries must work
together to ensure a smooth flow of goods & services.
BUILDING COOPERATION IN CHANNEL SYSTEMS
● One way traditional retailers can compare with online retailers is to be so efficient that
online retailers can’t beat them on cost.
● Four systems have emerged to tie firms together:
● Corporate distribution systems – a distribution system in which all of the organizations
in the channel of distribution are owned by one firm.
o Helps maintain a great deal of control over all its operations.
● Contractual distribution system – a distribution in which members are bound to
cooperate through contractual agreements.
o Three forms of contractual systems:
▪ Franchise systems – franchise agrees to all the rules, regulations and
procedures established by the franchisor; results in consistent quality and
level of service.
▪ Wholesaler-sponsored chains – each store signs an agreement to use the
same name, participate in chain promotions, and cooperate as a unified
system of stores even though each is independently owned and managed.
▪ Retail cooperatives – much like a wholesaler-sponsored chain except it is
initiated by the retailers
