1. Channels of Distribution Placement (Chapter 10)

2.  Channels of distribution  Producer  Ultimate consumer  Industrial user Key Terms

3. How Did I Get Here? A channel of distribution is the path a product takes from producer (or manufacturer) to final user (or consumer).

4.  Route a product follows and the businesses involved in moving a product from producer to final consumer Channel of Distribution

5. Key Terms, defined Producer/Manufacturer Ultimate consumer Industrial User

6.  Intermediaries  Retailers  Wholesalers  agents Key Terms

7. Intermediaries- People (Wholesalers, retailers, distributors, and agents also known as dealers) that move products between producers and final users. Intermediaries are also known as middlemen. They have expertise in that area that producers do not have. Retailers Agents – Has legal authority to act on behalf of the manufacturer to arrange sales between manufacturers/producers and wholesalers or retailers.

8.  How do consumers benefit from channels of distribution?  How do businesses benefit from channels of distribution? Question….

9. Conventional Channels Describe the activities that occur in a channel of distribution.

10. Producer Buyer Producer BB distributor Buyer Producer Agent Buyer Producer Agent Distributor Buyer Channels for industrial goods and services How do channel members add value to a product/service?

11.  Direct channels  Indirect channels Types of Channels

12.  Differences in Quantity  Example: Shoes  Differences in Assortment  Consumers want variety of products  Example: Cell Phones Why do we need Channels?

13.  Differences in Location  Reaching customers in different places  Example: Wal-Mart Hub Need for Channels

14.  Take the large quantities produced and breaks them into quantities people want  Gather products from many producers to give customers variety they want in convenient locations  Move products efficiently from where they are made to where they are sold Distribution Channels…

15. UPS: We ♥ Logistics Commercial Logistics deals with assorting, storing, sorting, and transporting products.

16.  Distribution Density  Intensive Distribution – placing products in all suitable locations Ex. Motor oil is marketed in various places; lube shops, auto parts, supermarkets, drug stores, convenient stores, warehouse clubs, etc. Channel Considerations

17.  Degree of Control Required  We are giving up control of marketing to some degree  Cost  Transportation, Processing, Carrying Costs, Packaging, Handling Channel Considerations (cont.)

18.  Selective Distribution – place products in selected areas Ex. Some top designers only sell through top department stores that appeal to the affluent customers who buy its merchandise.  Exclusive Distribution – place products in extremely limited areas. Dealers are assured that they are the only ones within a certain geographic radius that have the right to sell the manufactured products Distribution Density

19. Personal computer Cashmere A new brand of shampoo A new hybrid car Intensive Selective Intensive Selective

20.  1). Identify a producer and product that uses a Direct Distribution Channel  2). Identify a producer and product that follows an Indirect Distribution Channel (include the various channel members) Activity – Distribution Channels Ticket out the Door