0. Practicum 5: Marketing Channels: Delivering Customer Value
Alex Fertig
Dolyn Hall
Lauren Blankenship
Isaac Okebiorun

1. Distribution Channels
Channel of distribution- a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
PRODUCERS CONSUMERS
Distribution channels offer a variety of services that ease and enhance selling and buying goods
Companies pay too little attention to their distribution channels

2. Channel Members
Producers use intermediaries to make their products easily available to target markets
Intermediaries play an important role in matching supply and demand
Producers narrow down the different types of products in large quantities
Consumers want broad types of products in small quantities
Intermediaries buy large quantities from the producers and create small quantities of different types of products that are wanted by the consumers

3. Marketing Logistics
Marketing Logistics is also known as physical distribution
Involved planning, implementing, and controlling the flow of the product
As the textbook Principles of Marketing states,
“It involves getting the right product to the right customer in the right place at the right time.”
(Kotler & Armstrong, 2014)

4. Types of Intermediaries
Intensive Distribution is stocking the certain product in as many outlets as possible
Products such as Coca-Cola, Kraft, etc.
Exclusive Distribution which is giving a limited number of dealers the exclusive right to distribute the company’s products in their territories
A more extreme form compared to intensive
Examples: Bentley automobiles
Selective Distribution is the use of more than one but fewer than all of the intermediaries who are willing to carry the companies products
Selective is in between intensive and exclusive
Gives producers more control and less cost than intensive

5. Direct vs. Indirect Channels
The number of intermediary levels, determines the length of a channel
Direct marketing channels is a marketing channel that has no intermediary levels
This means that the producer sells directly to the consumer
Ex. GEICO sells insurance directly online; selling door-to-door and through telephone
Indirect market channels contain one or more intermediary levels
Most of the products we buy today use the indirect method
Ex. Toothpaste, cosmetics, cameras, etc.

6. Netflix Innovation has become a vital part in Netflix’s success.
Due to the new ideas, it has completely changed the way people watch movies and TV shows online
Companies have noticed Netflix’s success and have tried to create their own digital streaming
Because of this, Netflix is forced to come up with new ideas to stay competitive.
This company wiped out all movie rental services
They are forced to keep their distribution strategies up to date so they will not be overtaken by companies such as Amazon Video, Hulu and YouTube

7. Our Product Old Spice Established in 1937
Wide variety of body care products ranging from antiperspirants to shaving products.
Has a total of 6 online retailers

8. Market Channels
Since Old Spice uses more than one intermediary level, it uses indirect marketing channels.
Producer = Old Spice
Wholesaler = Yosemite Wholesalers
Retailers = Save Mart, Target, Amazon, etc.
Consumer = You, me, anyone interested in the product

9. Producer This is the production of the product Old Spice.
Old Spice makes millions of soaps, deodorants, and body sprays that then get shipped to the Wholesaler.

10. Wholesaler Known as the “Middle Man”
Buy producers product and sell it to retailers for profit.
Some wholesale warehouses sell directly to consumers (Costco, Sam’s Club)
Advantages:
Ability to produce in volume
Able to move the product along to the Retailer
Disadvantages:
Low demand= Big Losses

11. Retailer These are the neighborhood grocery stores.
The Retailer takes the large quantities from the Producer and Wholesaler and makes smaller quantities.
This is what the consumer sees in stores, and ultimately purchases.

12. Consumer
An individual that buys products for personal use or consumption
They can make the decision whether or not to purchase an item

13. References
About Us. (2014, January 1). Retrieved October 14, 2014, from
Marketing Channels and Supply Management. (2006, January 1). Retrieved October 12, 2014, from
Old Spice. (2014, January 1). Retrieved October 14, 2014, from
Old Spice Products. (2012, August 4). Retrieved October 28, 2014, from
Procter & Gamble. (2011, January 1). Retrieved October 28, 2014, from
Saltmarsh, N. (2004, April 30). Retrieved October 28, 2014.