Chapter 13: marketing channels: distribution strategy

direct channel
A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business owner
an intermediary who sells to consumers
how intermediaries help (3)
– provide specialization and division of labour
– overcome discrepancies
– provide contact efficiency
transactional function
– buying
– selling
– risk taking
logistical function
– assorting
– storing
– sorting
– transporting
facilitating function
– financing
– grading
– marketing
channel level
a layer of intermediaries that perform some work in bringing the product and its ownership close to the final buyer
channel conflict
disagreement between channel members over goals and roles, who should do what and for what rewards
horizontal conflict
conflict between firms on the same level
marketing channel systems(4)
a set of interdependent organizations
– conventional channel
– vertical channel
– horizontal channel
– hybrid channel
conventional channel (marketing channel systems)
channel members independently owned
vertical channel (marketing channel systems)
channel members act as a unified system
horizontal channel (marketing channel systems)
two or more companies on the same level join together for mutual gain
hybrid channel (marketing channel systems)
combination to serve different segments
hybrid marketing system (multichannel distribution system)
a single firm sets up two or more marketing channels to reach one or more customer segments
product factors (3)
– complexity
– product life cycle
– delicacy of the product
producer factors (3)
– resources
– control
– customer support
supply chain management
a management system that coordinates and integrates all the activities performed by supply chain members into a seamless process, from the source to the point of consumption resulting in enhanced customer and economic value
the process of strategically managing the efficient flow and storage of raw materials, WIP and finished goods from point of origin to point of consumption
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