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CHAPTER 13 – Marketing Channels and Supply Chain Management

CHAPTER 13 – Marketing Channels and Supply Chain Management. TYPES OF DISTRIBUTION CHANNELS. A. Direct Selling - direct sales between buyer & seller Ex. Mary Kay, Tupperware, Baskets B. Marketing Intermediaries: Figure 13.2. DUAL DISTRIBUTION.

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CHAPTER 13 – Marketing Channels and Supply Chain Management

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  1. CHAPTER 13 – Marketing Channels and Supply Chain Management

  2. TYPES OF DISTRIBUTION CHANNELS A. Direct Selling - direct sales between buyer & seller Ex. Mary Kay, Tupperware, Baskets B. Marketing Intermediaries: Figure 13.2

  3. DUAL DISTRIBUTION • Use of 2 or more distribution channels to reach the same target market.

  4. REVERSE CHANNELS • Backward movement of goods from user to the producer Ex. recycling

  5. Functions of Intermediaries Create: TIME UTILITY PLACE UTILITY OWNERSHIP UTILITY

  6. Types of Wholesaling Intermediaries 1. Manufacturer-Owned Facilities - sales branches & offices 2. Independent Wholesaling Intermediaries - account for majority of wholesaling establishments & wholesale sales in U.S. Merchant wholesalers: take title to goods they handle Agents & Brokers:may or may not take possession of goods but they never take title

  7. 3. Retailer-Owned Facilities - independent retailers may band together to form buying groups to get cost savings thru quantity purchases

  8. Factors Affecting Channel Strategy Decisions 1. MARKET FACTORS • whether product is intended for the consumer (long) or the business (short) market 2. PRODUCT FACTORS • perishable or complex products(short channels) • generally the more standardized the product, the longer the channel

  9. 3. PRODUCER FACTORS • companies w/ adequate financial, managerial & marketing resources are less compelled to utilize intermediaries in marketing their products 4. COMPETITIVE FACTORS • inadequate promotion of products may require manufacturers to develop unique distribution channels

  10. Distribution Intensity 1. INTENSIVE DISTRIBUTION - used for convenience goods Ex. Gum, soda, candy, cigarettes 2. SELECTIVE DISTRIBUTION - a firm chooses only a limited number of retailers in a market area to handle its product line Ex. Nike

  11. 3. EXCLUSIVE DISTRIBUTION - extreme form of selective distribution - most often used for specialty goods • Suboptimization

  12. Modes of Transportation • Truck • Railroad • Pipeline • Air • Water Carriers

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