1. Wholesaling
Chapter 15

2. Marketing Channels Definition Intermediaries Transactional role
Logistical role
Facilitation role
Transactional- Buy, sell, and risk taking
Logistical-Gather, store, and distribute products
Facilitation- Make good more attractive to buyers

3. Marketing Channels- B2C
Direct v. Indirect

4. Marketing Channels- B2B

5. Direct Marketing Channels Dual Distribution
L.L. Bean
Dual Distribution
Hallmark
Strategic Channel Alliances
Kraft & Starbucks
DMC-Customers buy products by interacting with various advertising media without a face-to-face meeting with a salesperson.
Dual distribution- Sell through two different types of channels

6. Channel Intermediaries
Merchant Wholesalers
Full-service
General-merchandise
Specialty-merchandise
Limited-service
Rack jobbers
Cash & carry
Drop shippers
Truck jobbers

7. Agents & Brokers Characteristics Manufacturer’s Agents Selling Agents
Do not take title, make $$ from commissions
MA- Carry noncompetitive, complementary merchandise in an exclusive territory
SA- Single producer and work with 4 P’s (recommendations for the product)
Bring buyers and sellers together. No continuous relationship with them.

8. Channel Partnerships Vertical Marketing Systems Corporate Contractual
Forward integration: Sherwin-Williams
Backward integration: Kroger
Contractual
Wholesaler-sponsored Voluntary Chains
Retailer-sponsored Cooperatives
Franchising
Administered
Administered Vertical Marketing Systems
VMS- Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.
Corporate: Under single ownership
Contractual- Independent firms integrate their efforts in order to obtain better economies and marketing impact than they would working alone

9. Channel Partnerships
Collaborative use of information and open communication
Levi Strauss and Modell’s Sporting Goods

10. Factors Determining Channels Choice
Environmental Factors
Consumer Factors
Product Factors
Company Factors

11. Considerations Target Market Coverage Buying Requirements
Profitability

12. Considerations Target Market Coverage Intensive distribution
Exclusive distribution
Selective distribution
Intensive- Put it in as many outlets as possible. Coke- “arm’s reach of desire”
Exclusive- Only one outlet in a geographical area Radio Shack and Compaq Computers
Selective- Only sell in a few retail outlets

13. Considerations Buyer Requirements Information Convenience Variety
Proximity
8-second rule
Variety
Breadth and depth of products offered by intermediary
Attendant Services
Variety-PetCo.
AS- Whirpool

14. Considerations
Profitability
How are margins divided?

15. Global Market
Must consider intermediaries in foreign markets

16. Types of Conflict Vertical conflict Horizontal conflict
Disintermediation
Profit margin distribution
Attention given to products
Horizontal conflict
Infringement upon market area
Different retailers selling same brand
VC- Between different levels of the marketing channel
Disintermediation- One party bypasses another for direct marketing

17. Cooperation Channel Captain Economic influence Expertise influence
Identification influence
Legitimate influence
Channel Captain- Coordinates, directs and supports other channel members
ID- Desire to be associated with certain group
Legit- Contracts

18. Legal Issues Dual distribution Exclusive Dealing Tying Arrangements
Too much power?
Exclusive Dealing
Tying Arrangements
ED- Channel member restricts another member from selling competitive products
TA- Supplier requires buyer to purchase other products in order to get access to products it desires