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Chapter 12

Marketing Chapter 12 Notes.docx

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MKT 100
Laila Rohani

Marketing: MKT100 Chapter 12 Notes Ch. 12: Marketing Channels: Distribution Strategy The Importance of Distribution • All goods and services organizations need a well-thought out distribution strategy – even organizations that physically make money • A good distribution strategy is key to the successful launch of a product Distribution Channels, Supply Chain and Logistics Are Related • A distribution channel is the set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption • Supply chain management refers to a set of approaches and techniques firm employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, store, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right times • Wholesalers are those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, and then reselling the goods (usually in smaller quantities) to retailers, industrial or business users • Retailers sell products directly to customers • Logistics management is the integration of two or more activities for the purpose of planning, implementing and controlling the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption • Intermediaries are wholesalers and retailers and perform a variety of transactional, logistical, and facilitating functions Transactional Functions: Buying, Risk Taking, Promotion, Selling Logistical Functions: Physical Distribution, Storing Facilitating Functions: Gathering Information, Financing Designing Distribution Channels - Channel structure:  Direct distribution: allow manufacturers to directly deal with consumers, ex. Dell, Avon, Tupperware  Indirect distribution: one or more intermediaries work with manufactures to provide goods to consumers  Multichannel distribution: hybrid approach, combo of both direct and indirect distribution  Customer Expectations: important to know from which manufactures the customers want to buy  Channel member characteristics: larger channel member-less likely to use intermediary - Distribution Intensity:  Number of channel members to use at each level of the supply chain  Intensive distribution: get products into as many outlets as possible  Exclusive distribution: exclusive rights to sell to one or few retail customers, so no others can sell • Exclusive geographic territories: no other customers can sell a particular brand in these areas  Selective distribution: between the intensive and exclusive, uses a few selected customers in a territory Supply Chain Adds Value - Supply chain management streamlines distribution - Supply Chain Management affects marketing  Distribution centre: facility for the receipt, storage, and redistribution of goods to company stores Managing Channels Through Vertical Marketing Systems
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