Marketing 2030 Chapter 10.docx

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22 Apr 2012

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Channel of Distribution
o The series of firms or individuals that facilitates the movement of a product from the producer to
the final customer
o Created Efficiency by:
o Reducing the number of transactions necessary for goods to flow from many different
manufacturers to large number of customers:
o Bulk Breaking: Dividing larger quantities of goods into smaller lots to the needs of buyers
o Creating Assortments: Providing a variety of products in one location to meet the needs of
o Facilitating Functions: Functions of channel intermediaries that make the purchase process easier
for customers and manufacturers
o International distribution channels can make global marketing easier
The Composition and Structure of Channels:
Types of Wholesaling Intermediaries: Firms that handle the flow of products from the manufacturer to
the retailer or business user
o Independent Intermediaries: Channel intermediaries that are not controlled by any manufacturer
but rather do business with many different manufacturers and many different customers
o Merchant Wholesalers: Intermediaries that buy goods from manufacturers (take title to them)
and sell to retailers and other business to business customers
o Take Title: to accept legal ownership of a product and the accompanying rights and
responsibilities of ownership
o Jack Robber: Provide retailers with the display units, check inventories, and replace
merchandise for the retailers
o Cash and Carry wholesalers: Provide products for small business customers who purchase at
wholesaler's location
o Truck Jobbers: Deliver perishable food and tobacco items to retailers
o Drop Shippers: Take orders from and bill retailers for products drop-shipped from
o Mail-order wholesalers: Sell through catalogues, telephone, or mail order
o Manufacturer Owned Intermediaries: Manufacturers set up their own channel intermediaries
o Sales branches
o Sales Offices
o Manufacturers Showrooms
Types of Distribution Channels:
o Channel Levels: The number of distinct categories of intermediaries that populate a channel of
o Consumer Channels
o Business to Business Channels
o Distribution Channels for Services
o Dual Distribution Systems
Planning a Channel Strategy:
o Channel Objectives (Decide on a distribution plan to develop appropriate objectives)
o Evaluating the Environment (Consider internal and external environment)
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