Marketing (Marketing Channels Slides)

marketing channel
interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumers
Marketing channel functions (3)
specialization and division of labor
overcoming discrepancies
providing contact efficiency
Marketing channel function: specialization and division of labor (5)
1. creates greater efficiency
2. provides lower production costs
3. achieves economies of scale
4. aids producers who lack resources to market directly
5. builds good relationships with customers
Marketing channel function: overcoming discrepancies (4)
discrepancy of quantity
discrepancy of assortment
temporal discrepancy
spatial discrepancy
Overcoming discrepancies: discrepancy of quantity
difference between the amount of product produced and the amount an end user wants to buy
overcoming discrepancies: discrepancy of assortment
lack of all items a customer needs to receive full satisfaction from a product or products
overcoming discrepancies: temporal discrepancy
situation that occurs when a product is produced but a customer is not ready to buy it
overcoming discrepancies: spatial discrepancy
difference between the location of a producer and the location of widely scattered markets
channel intermediaries (3)
retailer: sells to customers
merchant wholesaler: buys from manuf., resells
agents and brokers: represent channel members
channel intermediaries that DO take title to goods (2)
merchant wholesalers
channel intermediaries that DON’T take title to goods
agents and brokers
channel intermediary: retailers perform…
transactional functions
channel intermediary: wholesalers perform….
logistical functions
channel intermediary: agents and brokers perform…
facilitating functions
market factors affecting channel choice (4)
customer profiles
consumer or industrial customer
size of market
geographic location
product factors affecting channel choice (5)
product complexity
product price
product standardization
product life cycle
product delicacy
producer factors affecting channel choice (3)
producer resources
number of product lines
desire for channel control
social dimensions of channels (5)
channel power
channel member’s capacity to control or influence the behavior of other channel members
channel control
situation that occurs when one marketing channel member intentionally affects another member’s behavior
channel leader
member of a marketing channel that exercises authority/power over the activities of other members
channel conflict
clash of goals and methods between distribution channel members
conflicts may occur if channel members… (4)
have conflicting goals
fail to fulfill expectations of other channel members
have ideological differences
have different perceptions of reality
channel partnering (cooperation)
create a channel that serves customers and creates a competitive advantage
channel cooperation
service, and reduce total costs of marketing channel

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