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Premium member Presentation Transcript TYPES OF MARKETING CHANNELS: TYPES OF MARKETING CHANNELS Marketing channel: system of marketing institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a distribution channelSTRATEGIC IMPLICATIONS: THE ROLE OF MARKETING CHANNELS IN MARKETING STRATEGY: STRATEGIC IMPLICATIONS: THE ROLE OF MARKETING CHANNELS IN MARKETING STRATEGY Channels provide the means by which the firm moves the goods and services it produces to ultimate users Channels perform four important functions. They:TYPES OF MARKETING CHANNELS: TYPES OF MARKETING CHANNELS Marketing intermediary: wholesaler or retailer that operates between producers and consumers or business users; also called a middleman Wholesaler:TYPES OF MARKETING CHANNELS: TYPES OF MARKETING CHANNELS Logistics: process of coordinating the flow of information, goods, and services among members of the distribution channel Physical distribution:Figure 13.2: Alternative Marketing Channels: Figure 13.2: Alternative Marketing Channels TYPES OF MARKETING CHANNELSDirect Selling: Direct Selling Direct channel: marketing channel that moves goods directly from a producer to ultimate user Direct selling: strategy designed to establish direct sales contract between producer and final userDell Dell Computer: A Direct Seller of Computers: Dell Dell Computer: A Direct Seller of ComputersDUAL DISTRIBUTION: DUAL DISTRIBUTION Dual distribution: © PhotoDiscCHANNEL STRATEGY DECISIONS: CHANNEL STRATEGY DECISIONS Channel design includes decisions concerning channel length and channel width Factors which impact the selection of a marketing channel include: Selection of a Marketing ChannelPowerPoint Presentation: Table 13.1: Factors Influencing Marketing Channel Strategies Characteristics of Short Channels Characteristics of Long Channels Market factors Business users Consumers Geographically concentrated Geographically diverse Extensive technical knowledge and regular servicing required Little technical knowledge and regular servicing not required Large orders Small orders Product factors Perishable Durable Complex Standardized Expensive Inexpensive Continued on next slide . . .PowerPoint Presentation: Characteristics of Short Channels Characteristics of Long Channels Producer factors Manufacturer has adequate resources to perform channel functions Manufacturer lacks adequate resources to perform channel functions Broad product line Limited product line Channel control important Channel control not important Competitive factors Manufacturing feels satisfied with marketing intermediaries’ performance in promoting products Manufacturer feels dissatisfied with marketing intermediaries’ performance in promoting products Table 13.1: Factors Influencing Marketing Channel Strategies (Continued)CHANNEL STRATEGY DECISIONS: CHANNEL STRATEGY DECISIONS Distribution intensity: number of intermediaries through which a manufacturer distributes its goods Intensive distribution: channel policy in which a manufacturer of a convenience product attempts to saturate the market Determining Distribution Intensity (LengthXWidth)CHANNEL STRATEGY DECISIONS: CHANNEL STRATEGY DECISIONS Exclusive distribution: channel policy in which a firm grants exclusive rights to a single wholesaler or retailer to sell its products and a particular geographic area Selective distribution: channel policy in which a firm chooses only a limited number of retailers to handle its product line Determining Distribution IntensityCHANNEL STRATEGY DECISIONS: CHANNEL STRATEGY DECISIONS Legal problems of exclusive distribution Exclusive-dealing agreement: arrangement between manufacturer and e-marketing intermediary that prohibits the intermediary from handling competing product lines Tying agreement: Arrangement that requires a marketing intermediary to carry items other than those they want to sell Determining Distribution IntensityChannel Management: Channel Management Once channels have been designed, the challenge becomes effectively managing all the relationships The challenge is to set up a system or method for assigning responsibilities, controlling behaviors, and monitoring performance Various forms of Vertical Marketing Systems allow us to do thisVERTICAL MARKETING SYSTEMS: VERTICAL MARKETING SYSTEMS Vertical marketing system (VMS): planned channel system designed to improve distribution efficiency and cost effectiveness by integrating various functions throughout the distribution chain Four types of VMS: © PhotoDiscVERTICAL MARKETING SYSTEMS: Corporate marketing system: a VMS in which a single owner operates at each stage in its marketing channel Example: Corporate Systems VERTICAL MARKETING SYSTEMSVERTICAL MARKETING SYSTEMS: Administered marketing system: VMS that achieves channel coordination when a dominant channel member exercises its power Example: Administered Systems VERTICAL MARKETING SYSTEMSCHANNEL MANAGEMENT AND LEADERSHIP: CHANNEL MANAGEMENT AND LEADERSHIP Channel Captain: a dominant and controlling member of a marketing channelPowerPoint Presentation: Contractual marketing system: VMS that coordinates channel activities through formal agreements among channel members like: Wholesaler-Sponsored Voluntary Chains Retail Cooperatives Franchises Contractual Systems VERTICAL MARKETING SYSTEMSTHE ROLE OF LOGISTICS IN DISTRIBUTION STRATEGY: THE ROLE OF LOGISTICS IN DISTRIBUTION STRATEGY Supply (value) chain: sequence of suppliers that contributes to the creation and delivery of a good or serviceRyder Ryder, a Member of the Supply Chain, Helps Firms Control Their Delivery Costs : Ryder Ryder, a Member of the Supply Chain, Helps Firms Control Their Delivery Costs Copyright © 2001 by Harcourt, Inc. All rights reserved.PHYSICAL DISTRIBUTION: PHYSICAL DISTRIBUTION A company’s physical distribution system contains the following elements: Customer Service Transportation Inventory Control Protective packaging and materials handling Order Processing Warehousing © PhotoDiscTransportation: Common carriers move freight via all modes of transportation for the general public Contract carriers do not serve the general public Private carriers do not offer services for hire, but provide transportation services solely for internally generated freight Classes of Carriers TransportationTransportation: Railroads Motor Carriers Water Carriers Pipelines Air Freight Freight Forwarders and Supplemental Carriers Intermodal Coordination Major Modes of Transportation TransportationFedEx FedEx: Now Offering a Form of Multinational Intermodal Coordination for Freight When Speed Is Needed : FedEx FedEx: Now Offering a Form of Multinational Intermodal Coordination for Freight When Speed Is Needed Copyright © 2001 by Harcourt, Inc. All rights reserved.PowerPoint Presentation: Table 13.2: Comparison of Transport Modes Mode Speed Depend- ability in Meeting Schedules Frequency of Shipments Availabil- ity in Different Locations Flexibility in Handling Cost Rail Average Average Low Low High Average Water Very slow Average Very low Limited Very high Very low Truck Fast High High Very extensive Average High Pipeline Slow High High Very limited Very low Low Air Very fast High Average Average Low Very highWarehousing: Warehousing Storage Warehouse: warehouse that holds goods for moderate to long periods prior to shipment, usually to buffer seasonal demand Distribution Warehouse:Protective Packaging and Materials Handling: Protective Packaging and Materials Handling Unitizing: process of combining individual materials into large loads for easy handling Containeriztion: You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.