1. MARKETING CHAPTER 21: CHANNEL MANAGEMENT

2. I. DISTRIBUTION AND THE PLACE UTILITY WHERE WILL THE TARGET MARKET BUY SERVICES?

3. A. BEGINNINGS AND ENDINGS- A PRODUCT ALWAYS STARTS WITH THE PRODUCER AND ENDS WITH THE CONSUMER

4. A CHANNEL CHANGES WHEN A NEW FORM HAS TAKEN PLACE. 1. ORANGES---ORANGE JUICE MANUFCT 2. ORANGE JUICE MANFT---FOOD BROKER-----RETAILER---CONSUMER

5. B. CHANNEL MEMBERS INDUSTRIAL USER-WHEN THE FINAL PRODUCT IS FOR USE IN THE BUSINESS CONSUMER USER-FINAL PRODUCT FOR USE IN THE HOME

6. BETWEEN THE PRODUCER AND THE CONSUMER ARE MIDDLEMEN OR INTERMEDIARIES

7. 1. MERCHANT INTERMEDIARIES- TAKE THE TITLE OF THE PRODUCT -WHOLESALERS -RETAILERS

8. 2. AGENTS- NEGOTIATE TITLE OF GOODS AFTER MANUFATURED. TAKES CARE OF SHELF DISPLAYS.

9. 3. NON-CHANNEL MEMBERS- TRANSPORTATION COMPANIES AND INDEPENDENT WAREHOUSES DO NOT TAKE TITLE OF GOODS…THEY ONLY STORE AND TRANSPORT

10. 4. DIRECT AND INDIRECT CHANNELS OF DISTRIBUTION

11. II. CHANNELS IN CONSUMERAND INDUSTRIAL MARKET THERE ARE SEPARATE CHANNELS FOR THE SAME PRODUCT IN CONSUMER AND INDUSTRIAL MARKETS:

12. A. CONSUMER MARKET- DIRECT & INDIRECT:

13. 1. DIRECT- USED VERY LITTLE IN CONSUMER MARKET: 4 WAYS: PG. 378 1. SELLING PRODUCT ON SITE (FARMER’S SITE) 2. SALES FORCE GOING DOOR-TO-DOOR 3. MAIL ORDER 4. TELEPHONE SOLICATION

14. 2. INDIRECT DISTRIBUTION- 4 TYPES PG. 379 a. MANF---RETAILER—CONSUMER (CLOTHES) b. MANF.—WHOLESALER—RETAILER—CONSMR (CANDY, STATIONARY, SPORTING GOODS) c. MANF—AGENT—WHOLSLR—RETL-CONSM (HOISSERY, COOKWARE) d. MANF-AGENT—RETLE—CONMER (MANF DO NOT WANT TO HANDLE THEIR OWN SALES)

15. B. INDUSTRIAL MARKET- CHANNELS ARE NORMALLY DIFFERENET AND SHORTER

16. 1. DIRECT CHANNEL- MOST COMMON FOR INDUSTRIAL GOODS MANUFACTURER-INDUSTRIAL USER

17. 2. INDIRECT CHANNEL (379) a. MANF-INDUSTR DIST-USER (AMERITECH-AMERITECH CELL-USER) b. MANF-AGENT-INDUSTR DIST-USER c. MANF-AGENTS-INDUTR USER

18. III. CONSIDERATIONS IN DISTRIBUTION PLANNING INVOLVES DECISIONS REGARDING PRODUCTS. THERE ARE 4 TYPES OF PHYSICAL MOVEMENTS

19. A. NON TRADITIONAL AND MULTIPLE CHANNELS SELLING PANTYHOSE IN SUPERMARKETS EDDIE BAUER AND VICTORIA SECRET USE MULTIPLE CHANNELS FOR DIST.

20. B. INTERMEDIARIES SIMPLIFY DISTRIBUTION FOR MANUFACTURERS. TAKES PRODUCT FROM PRODUCER AND GETS IT TO THE CONSUMER(AGENT)

21. C. CONTROL AND COSTS MORE COSTLY TO HAVE MORE CHANNELS BUT MANUFACTURERS CAN HAVE COMPLETE CONTROL OVER AGENTS WITHOUT HAVING TO DO ALL THE LEG WORK

22. D. INTENSITY USE OF ALL CHANNELS OF DISTRB.

23. INTENSIVE- MARKET IS BLOWN WIDE OPEN; SELLS TO EVERYONE AND IS FREQUENTLY PURCHASED (TOOTHPASTE, GUM, SHAMPOO)

24. SELECTIVE- USE OF SPECIFIC CHANNELS (RALPH LAUREN, CALVIN KLEIN) ONLY SOLD AT SPECIFIC STORES.

25. EXCLUSIVE- FRANCHISE; LIMITED NUMBER OF INTERMEDIARIES. RETAILER IS TIED BY CONTRACT TO MANUFACTURER