Marketing Channels, aka Distribution

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Presentation transcript:

Marketing Channels, aka Distribution

Let’s Cut Out the Middleman! Egg farmers get about $1.00/dozen We pay twice that at the grocery store. We are getting ripped off! Solicit a distribution channel from the audience. Should get something like: Big egg farmer brokerretailerconsumer Consider eggs when trucks were just arriving on the scene. Louis Weld in 1912 Egg farmer Egg farmer Egg farmer egg collective (grading and sorting) egg broker City wholesaler M&P Grocery M&P Grocery

Are we?

What valued services do intermediaries provide? Form Time Place Possession

External Changes Create Opportunities and Threats to the Existing Channel Structure Technological Economic Social Political Natural

Channel Partners also drive change by exercising power Coercive Reward Legitimate Referent Expert Informational

Managerial choices for channels Baseline selection: Direct Indirect

Some Options for Indirect Manufacturer’s Representatives Distributors/Wholesalers Agents/Brokers

So how do you pick?

So how do you pick? Fit with your: Customer Characteristics Existing Distribution System Product/Service Attributes

A Warning Channel selection is not just a marketing question. The choices you make for channels affect the rest of the company.

Closing Thoughts: Intermediaries provide services others do not wish to provide. Existing channels are the cheapest way to accomplish the needed tasks in the current environment. Changes in the external environment drive changes in channels of distribution. Channel partners drive change via power.