BCOR 350 13.1

marketing channel/channel of distribution
business structure of interdependent orgs from point of origin to the consumer, purpose to move product to their final consumption destination
channel members/intermediaries/re-sellers/middlemen
negotiate with one another, buy sell products, facilitate change of ownership between buyer and seller in course of moving the product from manufacturer to consumer, facilitate the distribution process by providing (specialization, division of labor, overcoming discrepancies, provide contact efficiency)
specialization and division of labor
breaking complex tasks into simpler ones, allocating them to specialists to create greater efficiency/lower average production costs
attain economies of scale
done by marketing channels through specialization/division of labor by aiding producers who lack motivation/financing/expertise to market directly to end users/consumers
overcoming discrepancies
aided by marketing channels for overcoming discrepancies of quality/assortment/time/space created by economies of scale in production
discrepancy of quality
difference between the amount of product produced and amount end user wants to buy, overcome by marketing channels by making products available in the quantities consumers desire
discrepancy of assortment
created by mass production, occurs when a consumer does not have all of the items needed to receive full satisfaction from a product, marketing channels assemble in one place many of the products necessary to complete a consumers needed assortment
temporal discrepancy
created when a product is produced but a consumer is not ready to buy it, marketing channels overcome temporal discrepancies by maintaining inventories in anticipation of demand
spatial discrepancy
the difference between the location of a producer and the location of widely scattered markets, marketing channels overcome by making products available in locations convenient to consumers
contact efficiency
marketing channels provide contact efficiency by reducing the number of stores customers must shop at to complete their purchases, cut the number of transactions required to get products from manufacturers to consumers and making an assortment of goods available in one location, IT enhances by making info on products/services easily available over Internet, Shoppers can find best deals w/o physically searching for them
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