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Chapter 11: Place and Development of Channel Systems

Chapter 11: Place and Development of Channel Systems. 1. Understand what product classes suggest about Place objectives. 2. Understand why some firms use direct channel systems while others rely on intermediaries and indirect systems.

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Chapter 11: Place and Development of Channel Systems

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  1. Chapter 11: Place and Development of Channel Systems

  2. 1. Understand what product classes suggest about Place objectives. 2. Understand why some firms use direct channel systems while others rely on intermediaries and indirect systems. 3. Understand how and why marketing specialists develop to make channel systems more effective. 4. Understand how to develop cooperative relationships— and avoid conflicts—in channel systems. 5. Know how channel members in vertical marketing systems shift and share functions—to meet customer needs. 6. Understand the differences between intensive, selective, and exclusive distribution. 7. Understand the important new terms. Chapter 11 Objectives When you finish this chapter, you should 11-2

  3. Place objectives Customer service level desired Type of channel Direct Indirect Type of physical distribution facilities needed Degree of market exposure desired Middlemen/ facilitators needed How to manage channels Strategy Decision Areas in Place Exhibit 11-1 11-3

  4. Greater Control Why a Firm May Want to Use Direct Channels Lower Cost Some Reasons for Choosing Direct Channels Value added subsequent to production process Direct contact with Customer Needs Quicker Response or Change in Marketing Mix Suitable Middlemen Not Available 11-4

  5. Bulk- Breaking Accumulating Sorting Assorting Regrouping Activities 11-5

  6. Choosing the Type of Relationship Whole-Channel Product-Market Commitment Key Issues in Channel Management Conflict Handling Common Objectives Role of Channel Captain Managing Channel Relationships 11-6

  7. Characteristics Type of channel Traditional Vertical marketing systems Administered Contractual Corporate Amount of cooperation Little or none Some to good Fairly good to good Complete Control maintained by None Economic power and leadership Contracts One company ownership Examples Typical “inde-pendents” General Electric McDonald’s Florsheim Vertical Marketing Systems Exhibit 11-3 11-7

  8. Intensive Selective Exclusive Market Exposure What Market Exposure Fits the Marketing Objectives = number of outlets 11-8

  9. Key Terms Place Channel of Distribution Direct Marketing Discrepancy of Quantity Discrepancy of Assortment Regrouping Activities Accumulating Bulk-Breaking Sorting Assorting Traditional Channel Systems Channel Captain Vertical Marketing Systems Corporate Systems Vertical Integration Administered Systems Contractual Systems Ideal Market Exposure Intensive Distribution Selective Distribution Exclusive Distribution Dual Distribution Reverse Channels

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