1. * * Chapter Fifteen Distributing Products Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

2. * * The Emergence of Marketing Intermediaries Marketing Intermediaries -- Organizations that assist in moving goods and services from businesses to businesses (B2B) and from businesses to consumers (B2C). They are called intermediaries because they’re in the middle of a series of firms that distribute goods. WHAT are MARKETING INTERMEDIARIES? LG1 15-2

3. * * The Utilities Created by Intermediaries Utility -- The want-satisfying ability, or value, that organizations add to goods and services by making them more useful or accessible to consumers. Six types of utilities: 1. Form 2. Time 3. Place 4. Possession 5. Information 6. Service INTERMEDIARIES CREATE UTILITY LG2 15-3

4. * * Wholesale Intermediaries Merchant Wholesalers -- Independently owned firms that take title to the goods they handle. There are two types: 1. Full-service wholesalers perform all distribution functions. 2. Limited-function wholesalers perform only selected distribution functions. About 80% of wholesalers are merchant wholesalers. TYPES of WHOLESALE INTERMEDIARIES LG3 15-4

5. * * Agents and Brokers Agents generally maintain long-term relationships with the clients they represent. ROLES of AGENTS and BROKERS LG3  Manufacturer’s agents represent several manufacturers in a specific territory.  Sales agents represent a single client in a larger territory. Brokers usually represent clients on a temporary basis. 15-5

6. * * Retail Distribution Strategy Intensive Distribution -- Puts products into as many retail outlets as possible including vending machines. Selective Distribution -- Uses only a preferred group of the available retailers in an area. Exclusive Distribution -- The use of only one retail outlet in a given geographic area. RETAIL DISTRIBUTION STRATEGIES LG4 15-6

7. * * Electronic Retailing -- Selling goods and services to ultimate consumers over the Internet. Telemarketing -- The sale of goods and services via the telephone. FORMS of NON-STORE RETAILING LG5 Non-Store Retailing Vending machines, kiosks, and carts dispense convenience goods when consumers deposit sufficient funds. 15-7

8. * * Building Cooperation in Channel Systems 1. Corporate Distribution Systems 2. Contractual Distribution Systems 3. Administered Distribution Systems 4. Supply Chains The FOUR SYSTEMS of CHANNEL RELATIONSHIPS LG6 15-8

9. * * The SUPPLY CHAIN LG6 Building Cooperation in Channel Systems 15-9

10. * * Logistics: Getting Goods to Consumers Efficiently COMPARING TRANSPORTATION MODES LG7 ModeCostSpeed Dependabilit y FlexibilityFrequencyReach RailMed.SlowMediumHighLowHigh TrucksHighFastHighMediumHighHighest PipelineLowMediumHighestLowestHighestLowest ShipsLowestSlowestLowestHighestLowestLow AirHighestFastestLow Medium 15-10

11. * * Logistics: Getting Goods to Consumers Efficiently Freight Forwarder -- Puts many small shipments together to create a single large shipment that can be transported cost-effectively by truck or train. LOGISTICS SPECIALISTS LG7 Intermodal Shipping -- Uses multiple modes of transportation to complete a single long-distance movement of freight. 15-11

12. * * The Storage Function Storage warehouses hold products for a relatively long period of time. Distribution warehouses are used to gather and redistribute products such as:  Beer and soft drinks  Package deliveries STORAGE WAREHOUSES LG7 15-12