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Chapter 12 Distribution Channels

Principles of marketing
by

sohel is

on 8 November 2017

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Transcript of Chapter 12 Distribution Channels

Distribution Channels
and Logistics Management



A set of independent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.
Distribution Channel
Why are
marketing intermediaries
used?
•To provide economies

•To match demand and supply
Distribution channel functions
• Information
• Promotion
• Contact
• Matching
• Negotiation
• Physical distribution
• Financing
• Risk taking
A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

•Direct and indirect marketing channel
Channel level
All of the institutions in the channel are connected by several types of flows:
Physical flow of product
The flow of ownership
The payment flow
The information flow
The promotion flow

Channel conflict
D
isagreement among marketing channel members on goals and roles.


Ho
r
izontal conflict
Vertical conflict
Vertical marketing system
Corporate VMS
Contractual VMS
Administered VMS
Successive stages
of production and
distribution under
single ownership.
Firms at different levels of production and distribution join together through contracts.
•Wholesaler-sponsored voluntary chains
Retailer cooperatives
Franchise organizations
Wholesalers organize voluntary chains of independent retailers to help them compete with large chain organizations.
Retailers organize a new, jointly owned business to carry on wholesaling and possibly production.
2.Manufacturer-sponsored
wholesaler franchise system
1.Manufacturer-sponsored
retailer franchise system
3.Service firm-sponsored
retailer franchise system
System that combines successive stages of production and distribution, not through common ownership or contractual ties but through the size and power of one of the parties.
A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.
Horizontal marketing system
Vertical Marketing System
Hybrid marketing channel
Multichannel distribution system
Changing channel organization

• Disintermediation

1. Analyzing consumer service needs
Channel design decisions
2. Setting channel objectives
and constraints
3. Identifying major alternatives
• Types of intermediaries
(sales force, manufacturer’s agency, industrial distributors)
• Number of marketing intermediaries
(Intensive, selective and exclusive distribution)
4. Evaluating the major alternatives
• Economic criteria
• Control issue
• Adaptive criteria
Full transcript