Marketing chapter 15a managing marketing channels wholesalers

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO: LO1 Explain what is meant by a marketing channel of distribution and why intermediaries are needed LO2 Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems 15-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO: LO3 Describe the factors and considerations that affect a company’s choice and management of a marketing channel LO4 Recognize how conflict, cooperation, and legal considerations affect marketing channel relationships 15-3 FIGURE 15-1 The variety of terms used for marketing intermediaries that vary in specificity and use in consumer and business markets 15-4 FIGURE 15-2 Intermediaries minimize transactions and the cost of distribution for producers and customers 15-5 LO1 NATURE AND IMPORTANCE OF MARKETING CHANNELS THE VALUE CREATED BY INTERMEDIARIES  Marketing Channel  Functions Performed by Intermediaries • Transactional Function • Logistical Function • Facilitating Function  Utilities Received by Consumers 15-6 FIGURE 15-3 Marketing channel intermediaries perform three functions, each consisting of different activities 15-7 CHANNEL STRUCTURE & ORGANIZATION LO2 MARKETING CHANNELS FOR CONSUMER GOODS AND SERVICES  Direct Channel  Indirect Channel • Retailers • WholesalersRetailers • AgentsWholesalersRetailers 15-8 FIGURE 15-4 Common marketing channels for consumer offerings by the kind and number of intermediaries 15-9 CHANNEL STRUCTURE & ORGANIZATION LO2 MARKETING CHANNELS FOR BUSINESS GOODS AND SERVICES  Direct Channel  Indirect Channel • Industrial Distributor • Agents • AgentsIndustrial Distributors 15-10 Dual Distribution Dual distribution involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product 15-31 Strategic Channel Alliances Strategic channel alliances is a practice whereby one firm’s marketing channel is used to sell another firm’s products 15-32 Merchant Wholesalers Merchant wholesalers are independently owned firms that take title to the merchandise they handle 15-33 Manufacturer’s Agents Manufacturer’s agents are agents who work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory Also called manufacturer’s representatives 15-34 Selling Agents Selling agents are agents who represent a single producer and are responsible for the entire marketing function of that producer 15-35 Brokers Brokers are independent firms or individuals whose principal function is to bring buyers and sellers together to make sales 15-36 Vertical Marketing Systems Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact 15-37 Franchising Franchising involves a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules 15-38 Channel Partnership A channel partnership consists of agreements and procedures among channel members for ordering and physically distributing a producer’s products through the channel to the ultimate consumer 15-39 Intensive Distribution Intensive distribution is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible 15-40 Exclusive Distribution Exclusive distribution is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm’s products 15-41 Selective Distribution Selective distribution is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products 15-42 Channel Conflict Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals 15-43 Disintermediation Disintermediation involves channel conflict that arises when a channel member bypasses another member and sells or buys products direct 15-44 Channel Captain A channel captain is a channel member (producer, wholesaler, or retailer) that coordinates, directs, and supports other channel members 15-45 ... a variety of marketing channel functions, including selling, stocking, delivering a full product assortment, and financing 15-27 Electronic Marketing Channels Electronic marketing channels employ... traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems 15-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO: LO3... SERVICES  Direct Channel  Indirect Channel • Retailers • Wholesalers Retailers • Agents Wholesalers Retailers 15-8 FIGURE 15-4 Common marketing channels for consumer offerings by the kind and number