MKT 101 - Chapter 12
MKT 101 - Chapter 12
MKT 101 - Chapter 12
A set of interdependent
organizations that help make a
product or service available for
use or consumption by the
consumer or business user.
HOW CHANNEL MEMBERS ADD VALUE
Information
• Gathering and distributing information about consumers, producers, and other actors and
forces in the marketing environment.
Promotion
• Developing and spreading persuasive communications about an offer.
Contact
• Finding and engaging customers and prospective buyers.
Negotiation
VALUE • Reaching an agreement on price and other terms so that ownership or possession can be
transferred.
Physical Distribution
• Transporting and storing goods.
Financing
• Acquiring and using funds to cover the costs of the channel work.
Risk Taking
• Assuming the risks of carrying out the channel work.
Number of Channel Levels
A layer of intermediaries that performs some work in bringing the product and its
Channel Level ownership closer to the final buyer.
Direct Marketing
A marketing channel that has no intermediary levels.
Channel
Indirect
Marketing A marketing channel containing one or more intermediary levels.
Channel
CONSUMER AND BUSINESS MARKETING CHANNELS
CHANNEL BEHAVIOR AND
ORGANIZATION
Horizontal conflict occurs among firms at the Vertical conflict, conflict between different levels
same level of the channel. of the same channel, is even more common.
CHANNEL CONFLICT
Disagreements among marketing channel members on goals, roles, and rewards—
who should do what and for what rewards.
Conventional Distribution
Channel vs Vertical
Marketing System (VMS)
Conventional Distribution Channel
◦ A channel consisting of one or more
independent producers, wholesalers, and
retailers, each a separate business seeking
to maximize its own profits, perhaps even at
the expense of profits for the system as a
whole.
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Companies can gain a Improved logistics can The explosion in
powerful competitive yield tremendous cost product variety has
advantage by using savings to both a created a need for
improved logistics to company and its improved logistics
give customers better customers. management.
service or lower prices.
Major
Logistics Functions
Inventory
Warehousing
Management
Logistics
Transportation Information
Management
Warehousing
Storage Warehouses
◦ A place to store goods for moderate to
long periods.
Distribution Center
◦ A large, highly automated warehouse
designed to receive goods from various
plants and suppliers, take orders, fill them
efficiently, and deliver goods to customers
as quickly as possible.
Inventory Management
Trucks Railroads
Internet Carriers