Practicum 5: Marketing Channels: Delivering Customer Value Alex Fertig Dolyn Hall Lauren Blankenship Isaac Okebiorun

Distribution Channels Channel of distribution- a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user PRODUCERS CONSUMERS Distribution channels offer a variety of services that ease and enhance selling and buying goods Companies pay too little attention to their distribution channels

Channel Members Producers use intermediaries to make their products easily available to target markets Intermediaries play an important role in matching supply and demand Producers narrow down the different types of products in large quantities Consumers want broad types of products in small quantities Intermediaries buy large quantities from the producers and create small quantities of different types of products that are wanted by the consumers

Marketing Logistics Marketing Logistics is also known as physical distribution Involved planning, implementing, and controlling the flow of the product As the textbook Principles of Marketing states, “It involves getting the right product to the right customer in the right place at the right time.” (Kotler & Armstrong, 2014)

Types of Intermediaries Intensive Distribution is stocking the certain product in as many outlets as possible Products such as Coca-Cola, Kraft, etc. Exclusive Distribution which is giving a limited number of dealers the exclusive right to distribute the company’s products in their territories A more extreme form compared to intensive Examples: Bentley automobiles Selective Distribution is the use of more than one but fewer than all of the intermediaries who are willing to carry the companies products Selective is in between intensive and exclusive Gives producers more control and less cost than intensive

Direct vs. Indirect Channels The number of intermediary levels, determines the length of a channel Direct marketing channels is a marketing channel that has no intermediary levels This means that the producer sells directly to the consumer Ex. GEICO sells insurance directly online; selling door-to-door and through telephone Indirect market channels contain one or more intermediary levels Most of the products we buy today use the indirect method Ex. Toothpaste, cosmetics, cameras, etc.

Netflix Innovation has become a vital part in Netflix’s success. Due to the new ideas, it has completely changed the way people watch movies and TV shows online Companies have noticed Netflix’s success and have tried to create their own digital streaming Because of this, Netflix is forced to come up with new ideas to stay competitive. This company wiped out all movie rental services They are forced to keep their distribution strategies up to date so they will not be overtaken by companies such as Amazon Video, Hulu and YouTube

Our Product Old Spice Established in 1937 Wide variety of body care products ranging from antiperspirants to shaving products. Has a total of 6 online retailers

Market Channels Since Old Spice uses more than one intermediary level, it uses indirect marketing channels. Producer = Old Spice Wholesaler = Yosemite Wholesalers Retailers = Save Mart, Target, Amazon, etc. Consumer = You, me, anyone interested in the product

Producer This is the production of the product Old Spice. Old Spice makes millions of soaps, deodorants, and body sprays that then get shipped to the Wholesaler.

Wholesaler Known as the “Middle Man” Buy producers product and sell it to retailers for profit. Some wholesale warehouses sell directly to consumers (Costco, Sam’s Club) Advantages: Ability to produce in volume Able to move the product along to the Retailer Disadvantages: Low demand= Big Losses

Retailer These are the neighborhood grocery stores. The Retailer takes the large quantities from the Producer and Wholesaler and makes smaller quantities. This is what the consumer sees in stores, and ultimately purchases.

Consumer An individual that buys products for personal use or consumption They can make the decision whether or not to purchase an item

References About Us. (2014, January 1). Retrieved October 14, 2014, from http://www.savemart.com/about-us Marketing Channels and Supply Management. (2006, January 1). Retrieved October 12, 2014, from http://www.laukamm.de/fomweb/elearning/marketing/channel/kotl_channels1.htm Old Spice. (2014, January 1). Retrieved October 14, 2014, from http://www.oldspice.com/en-US/where-to-buy.aspx Old Spice Products. (2012, August 4). Retrieved October 28, 2014, from http://fashioniseverywhere.com/2014/04/08 Procter & Gamble. (2011, January 1). Retrieved October 28, 2014, from http://news.oldspice.com/about/history_timeline Saltmarsh, N. (2004, April 30). Retrieved October 28, 2014.