1. Marketing Channels Chapter 13

2. Determine 2-3 different ways of transportation for the following 24 air compressors, each of 36’’x36’’x60’’, 400 p. each to Dallas, TX. Two crates of rare orchids, 12’’x24’’x48’’, each weighing 27 pounds to NYC 6 classic cars purchased by an eccentric, wealthy customer in UK. The cars are not currently running.

3. Vocabulary Marketing (Supply/Distribution)Channel: group of individuals and organizations that directs the flow of products from producers to customers. Supply chain management: starts before physical distribution, covering procurement of inputs, conversion into finished products, and product movement to final destinations

4. o ? retail stores o wholesalers o telemarketing o mail order catalogs o web sites "Push" : getting channels to ………your product "Pull" : getting consumers to ……...your product by name Firm Channel members Customer

5. Why would a manufacturer want to use a wholesaler or a retailer?

6. Functions performed by intermediaries Transactional (promote, negotiate, take risks ) Logistical Facilitating (researching and financing)

7. Logistical : Physical Distribution Gets It to Customers Logistics or Physical Distribution Coordinating the flow of information among channel members

8. Assorting …………….. Bulk-Breaking Allocating or Bulk-Breaking Allocating or Bulk-Breaking Accumulating ……………… (Medical Clinics) ……………… (Medical Clinics) Facilitating : Channel Specialists Adjust Discrepancies with Regrouping Activities Sorting (Grading Oranges) Sorting (Grading Oranges) COSTCO Heterogeneity QUANTITY ASSORTMENT

9. Marketing channels add Value

10. Channel Intermediaries Retailers Merchant Wholesalers Merchant Wholesalers Agents and Brokers Agents and Brokers Take Title to Goods Do NOT Take Title to Goods

11. Types of Marketing Channels Channels for Consumer Products Direct Channel TRADITIONAL DUAL DISTRIBUTION & REVERSE CHANNELS

12. Exploring Multiple Channel Options: Benefits of Different Channels

13. Types of Marketing Channels Channels for Industrial Products

14. CHANNEL STRATEGY DECISIONS 1.Selection of a Marketing Channel 2.Intensity of Distribution Distribution 3.Management of Relationships Relationships

15. 1.Selection of a Marketing Channel Market factors: Consumer vs Business markets (large vs. small quant, service) Geographic location (concentrated, dispersed) Product factors: Complex, customized, expensive Products’ life cycle/delicacy (e.g. mature, perishable) Producer factors: Big/small Image protection

16. 2. Intensity of Market coverage Selective……………..

17. Red Bull is sold at convenience stores, supermarkets and warehouse clubs. Red Bull has _________ distribution A. selective B. exclusive C. intermediate D. intensive E. limited

18. 3. Management of relationship

19. Retailer Distributor Retailer Horizontal

20. "Captive Channels" : channels owned by firm "Non-Captive Channels" : channels not owned by firm "When do retailers have "channel power"? firm's product is not well differentiated from competitors threat of backward integration Firm Channels Customer

21. Channel conflict examples Firm: Your retail prices are too high, and are driving down demand Retailer: With your wholesale prices, it’s the only way we can make money Firm: You carry too many lines, our product isn't even noticed on shelves Retailer: Customers come first. BTW, why don't you prune your line. Firm Channels Customer

22. "free – riding" by internet channel customers who use more than one channel get confused return policies origin of merchandise different prices Firm Website Customer Retail store

23. Questions?