1. Marketing Channels, aka Distribution

2. 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

3. Are we?

4. What valued services do intermediaries provide?
Form
Time
Place
Possession

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

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

7. Managerial choices for channels
Baseline selection:
Direct
Indirect

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

9. So how do you pick?

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

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

12. 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.