Channel Strategy

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marketing channel

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consists of individuals and firms involved in the process of making a product service available for use or consumption by consumers or industrial users

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channel strategy

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creates utility for customers -particulary time and place utilities

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time utility

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provide convenience by having the product available when consumers want to buy it. speed getting the product to the customer in a timely manner

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place utility

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convenience of location and prestige of location refers to how exclusive or upscale a location is.

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form utility

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created when a channel member takes an unassembled product and assembles it

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possession utility

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created when a channel member gives the consumers actualy possession of the product

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logistical functions

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performed by intermediaries and relate most closely with the movement of products

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transactional function

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performed by intermediaries and involved buying, selling, and risk taking because they stock merchandise in anticipation of sales

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facilitating functions

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performed by intermediaries; assist producers in making goods and services more attractive to buyers. also involveds financing and market research

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intensive distribution

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want their products to be in every place a consumer could conceivably get them. (i.e. gum and soft drinks); objectives is to achieve a sense of convenience

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direct channels

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producer and ultimate consumer deal directly with each other (i.e. Dell). there is no middleman

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indirect channels

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rely on marketing intermediaries to perform different functions and reach ultimate consumer. Becuase itnermediaries are used there is no direct contact between the producer of the good and the ultimate consumer

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selective distribution

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place products in just a few locations (i.e. perfume at department store)

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exclusive distribution

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sell products through just one outlet per geographic territory (i.e. Armani); typically used when manufacturer wants to add an element of prestige to the product

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industrial distributor

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performs a variety of marketing channel functions including selling, stocking, and delivering a full prodcut assortment and financing

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electronic marketing channels

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employ the Internet to make goods and services available for consumption or use by consimers or business buyers

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direct marketing channels

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allow consumers to buy products by interacting with various advertising media with a face-to-face meeting with a salesperson; include mail-order selling, direct-mail sales, catalog sales, telemarketing, interactive media, and televised home shopping

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dual distribution

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an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for same basic product

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strategic channel alliances

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whereby one firm's marketing channel is used to sell another firm's products; popular in global marketing where creation of marketing channel relationships is expensive and time consuming

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merchant wholesalers

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independently owned firms that take title to the merchandise they handle- classified as either full-service or limited-service; two types of full-service wholesalers exist general marechandise wholesalers and speciality merchandise wholesalers

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general merchandise wholesalers

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aka full-line; carry a broad assortment of merchandise and perform all channel functions

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specialty merchandise

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aka limited-line; offer a relatively narrow range of products but have an extensive assortment within the product line carried

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rack-jobbers

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type of limited-service wholesalers; furnish the racks or shelves that display merchandise in retail stores, perform all channel functions, and sell on consignment to retailers, which means they retain the title to products displayed and bill retailers only for the merchandise sold

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Cash and carry wholesalers

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type of limited-service wholesaler; take title to merchandise but sell only to buyers who call on them, pay cash for merchandise, and furnish their own transportation for merchandise

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drop shippers/desk jobbers

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type of limited-service wholesaler; own merchandise they sell but do not physically handle, stock, or deliver it

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truck jobbers

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type of limited-service wholesaler; have a small warehouse from which they stock their trucks for distribution retailers

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types of limite-service wholesaler

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4; rack-jobbers, cash and carry wholesalers, drop shippers/desk jobbers, truck jobbers

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manufacturer's agent

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aka manufacturer's representative; works for several producers and carry noncompetitive, complementary merchandise in an exclusive territory

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selling agents

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represent a single producer and are responsible for entire marketing function of the producer

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brokers

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independent firms or individuals whose principal function is to bring buyers and sellers together to make sales

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general merchandise wholesalers

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aka full-line; carry a broad assortment of merchandise and perform all channel functions

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specialty merchandise

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aka limited-line; offer a relatively narrow range of products but have an extensive assortment within the product line carried

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rack-jobbers

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type of limited-service wholesalers; furnish the racks or shelves that display merchandise in retail stores, perform all channel functions, and sell on consignment to retailers, which means they retain the title to products displayed and bill retailers only for the merchandise sold

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Cash and carry wholesalers

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type of limited-service wholesaler; take title to merchandise but sell only to buyers who call on them, pay cash for merchandise, and furnish their own transportation for merchandise

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drop shippers/desk jobbers

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type of limited-service wholesaler; own merchandise they sell but do not physically handle, stock, or deliver it

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truck jobbers

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type of limited-service wholesaler; have a small warehouse from which they stock their trucks for distribution retailers

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types of limite-service wholesaler

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4; rack-jobbers, cash and carry wholesalers, drop shippers/desk jobbers, truck jobbers

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manufacturer's agent

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aka manufacturer's representative; works for several producers and carry noncompetitive, complementary merchandise in an exclusive territory

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selling agents

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represent a single producer and are responsible for entire marketing function of the producer

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brokers

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independent firms or individuals whose principal function is to bring buyers and sellers together to make sales

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manufacturer's branch office

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carries a producer's inventory and performs the functions of a full-service wholesaler

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manufacturer's sales office

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does not carry inventory, typically performs only a slaes function, and serves as an alternative to agents and brokers

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channel conflict

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aries when one channel member believes another member is engaging in behavior that prevents it from achieving its goals

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vertical conflict

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occurs between two actors at dirffernt levels in a marketing channel;

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vertical marketing systems

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professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact

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corporate vertical marketing system

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combination of successive stages of production and distribution under a single ownership

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forward integration

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manufacturer also owns a store that sells the products i.e. Ralph Lauren manufacturers clothes and sells them in retial outlets

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backward integration

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retailer owns a manufacturing operation

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distintermediation

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occurs when a manufacturer bypasses a channel intermediary and sells directly to the customer

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horizontal conflict

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occurs between actors at the same level in a marketing channel

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franchising

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a contractual agreement between a parent company (franchisor) and an individual or firm ( a franchisee) that allows the franchise to operate a cetain type of business under an established name and according to specfic rules

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manufactured-sponsored retail franchis

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prominent in automobile industry

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manufacturer-sponsored wholesale systems

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exist in soft-drink industry

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service-sponsored retail franchise systems

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provided by firms that have designed a unique appraoch for performing a service and wish to profit by selling the franchise to others

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service-sponsored franchise systems

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exist when franchisors license indivduals or firms to dispense a service under a trade name and specific guidelines

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adminsitered vertical marketing systems

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achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership

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channel partnership

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consists fo agreements and procedures among channel members for ordering and physically distributing a producer's products through the channel to the ultimate consumer

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channel captain

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a channel member that coordinates directs and supports other channel members; can be producers, wholesalers, or retailers

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wholesaler

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intermediaries that sell to other businesses; 3 kinds merchant wholesalers, agents, and manufacturer-owned wholesalers

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merchant wholesalers

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distributors and jobbers' maintain physical possession of goods; distrbutor is a full-service wholesaler - performs all functions that we would expect a channel to perform; jobber is a wholesaler that does not perform all of the functions we expect from the channel, is a subset of distributor

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agents

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do not have possesion over goods. simply represent the company, take orders, and transfer the orders back to the manufacturer

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drop shipping

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the manufacturer ships the product to the customer