Distribution Channel Chapter 12 PDF

Chapter 12 Distribution Channel A set of independent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user. Why are marketing intermediaries used?  To provide economies (Fig. 12.1)  To match demand and supply Dis...

Chapter 12 Distribution Channel A set of independent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user. Why are marketing intermediaries used?  To provide economies (Fig. 12.1)  To match demand and supply Distribution channel functions  Information  Promotion  Contact  Matching  Negotiation  Physical distribution  Financing  Risk taking Channel level A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.  Direct and indirect marketing channel Fig.12.2 All of the institutions in the channel are connected by several types of flows:  Physical flow of product  The flow of ownership  The payment flow  The information flow Chapter 12 Mkt201 1   The promotion flow Channel conflict Disagreement among marketing channel members on goals and roles.  Horizontal conflict  Vertical conflict Vertical marketing system Fig. 12.3 1. Corporate VMS 2. Contractual VMS  Wholesaler-sponsored voluntary chains  Retailer cooperatives  Franchise organizations 1. Manufacturer-sponsored retailer franchise system 2. Manufacturer-sponsored wholesaler franchise system 3. Service firm-sponsored retailer franchise system 3. Administered VMS Horizontal marketing system A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. Hybrid marketing channel Multichannel distribution system (Fig. 12.4) Chapter 12 Mkt201 2 Changing channel organization  Disintermediation Channel design decisions 1. Analyzing consumer service needs 2. Setting channel objectives and constraints 3. Identifying major alternatives  Types of intermediaries (sales force, manufacturer’s agency, industrial distributors)  Number of marketing intermediaries (Intensive, selective and exclusive distribution) 4. Evaluating the major alternatives  Economic criteria  Control issue  Adaptive criteria Chapter 12 Mkt201 3