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34 Cards in this Set
- Front
- Back
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channel intermediaries
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set of organizations involved in the process of making a product/service available for consumption
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agent/broker
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negotiates sales without taking title to the goods, generally paid by commission or fees
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wholesaler
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takes title to the goods and resells them
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retailer
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sells to end user
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facilitating agency
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simply carries the goods, postal service, railroad
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channel functions
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set of activities that must be performed to deliver the product/service to the end user
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transactional functions
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buying (wholesalers), selling, risk-taking
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logistical functions
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transporting, storing, sorting, creating assortments
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facilitating functions
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financing, information/research, promoting, inspecting/testing
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channels evolve with PLC
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specialized channels -> alternative channels -> mass channels
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density of coverage
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-exclusive
-selective -intensive |
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exclusive
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-high influence of reseller marketing activities
-high margins throughout channel -stable levels of distribution -less competition at point of sale |
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selective
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-resellers compete to carry our product
-less reseller loyalty -good market coverage, more control, less cost intensive |
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intensive
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-high coverage
-convenient for end customers -high conflict potential |
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vertical integration
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own the channel vs. let other firms handle certain distribution functions=conventional distribution channel
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reasons to integrate
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need to control (specialized training, processes), importance of non-selling activities (info gathering, relationship building, consistent brand image), importance of key accounts, easier to monitor, motivate, control, don't have to compete for reps' attention, high product complexity, difficulty of evaluating performance
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reasons to outsource
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motivation (rewards for success, fear of failure), specialization (focused energy), economies of scale (larger assortments and warehouses), market coverage (market knowledge), credibility with end user
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compromise strategy
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different channels for different customers
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multiple channels
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-hybrid marketing system
-different customers, products may require different channels |
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multiple channel used
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-mature industries
-variety of potential users |
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objective criteria for multiple channels
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-size of account
-nature of application -geography |
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channel conflict and power
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power is the ability to get channel members to do things, often helps efficiency
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causes of conflict
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different expectations, differences in perception, disagreement over who should do what, poor communication, imbalances in channel power
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reward power
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economic advantages that grow if a channel leader's wishes are followed
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coercive power
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-involves negative sanctions or possible punishments to get another channel member to conform
-good in short run, corrosive over time |
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legitimate power
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-based on the belief that one channel member has the right to exert influence on other channel members and to expect compliance
-laws, contracts, and agreements as well as industry values and norms |
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expert power
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-based on the perception that one channel member has special knowledge that will be beneficial
-holding valuable info the channel member doesn't have and could use |
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referent power
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gained from superior image or association based on pride in a present or anticipated relationship
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balancing power and conflict
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maximizing profits across the channel
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sources of distribution change
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social, technological, regulatory, globalization
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growth of new channels
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online auctions and exchanges, peer-to-peer networks
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trends in marketing
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-growth of direct marketing
-"downstream" power shifts (from producers and wholesalers to retailers) -more hybrid systems -greater degree of sophistication in order fulfillment and customer tracking |
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retailing stores
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specialty, department, "category killer", discount
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non-store
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direct (catalogues, telemarketers, internet), automatic vending
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