Distribution-movements of goods and services from producers to consumers Marketing distribution channelsystem of marketing instructions that enhances the

physical flow of GnD, along with the ownership tile from producer to consumer -organized system of marketing institutions and their interrelationships that enhances the physical flow and ownership of GnD Logistics-the process of coordinating the flow of info, Gnd among members of the marketing channel Supply-chain managementcontrol of activities of purchasing, and delivery through w/c raw materials are transformed into products and made available to FINAL consumer Physical distribution-broad range of activities aimed at efficient movement of finished goods from the end of the product line to the consumer Functions of channels: -facilitate the exchange process by reducing the number of marketplace contacts necessary to make sale

-sorting-alleviate discrepancies by channeling products to suit both the buyer and product needs -standardizing (makes transaction efficient and fair) exchanges transactions by setting expectations for products and it involves the transfer process itself -facilitate searches by both buyers (specific goods to fit need) sellers (learn what buyers want) ANALYZE ALTERNATIVE CHANNELS IN LIGHT W/ COSTUMER NEEDS TO DETERMINE THE APPROPRIATE CHANNEL Flexible-channels change TYPES OF MARKETING CHANNEL -meet seller objectives and buyers need Marketing intermediary (middleman)-operates between producers and consumers Wholesaler-takes title to the goods it handles then distribute to retailer, distributer, and consumer Business products-short channels due to geographic concentration and few business purchasers Service-short channels for personal relationship Not for profit-short, simple, direct

Direct selling-simplest and shortest -producer establishes direct sales contact w/ final consumer -require extensive demonstration -B2Binstallations, accessory, components part and equipment Channels using marketing intermediary Producer-wholesaler-retailercostumer-traditional -carries goods between literally thousands of small producers w/ limited lines and local retailers Producer-Wholesaler-Business user Producer-agent-wholesalerretailer-consumer -Agent-bring buyer and seller together --NEVER TAKES TITLE --REPRESENTS A PRODUCER Producer-agent-wholesalerbusiness user -broker-small producer market offerings to large wholesaler -manufacturers representativeindependent sales force to contact wholesaler buyer Producer-agent-business user -merchant wholesalerindependent own wholesaler takes title of goods (products in small units)

-FOR PRODUCT W/ LARGE UNIT SALES AND TRANSPO ACCOUNT FOR SMALL PERCENT OF TOTAL COST Dual distribution-movement of products through more than one channel to reach target market MAXIMIZE FIRMS COVERAGE OR INCREASE COST EFFECTIVE OF MARKETING EFFORT Reverse channels-return goods to producer -handle product recall and repair Channel strategy decision -select specific channel Selecting of marketing channel -dictated by marketplace -product itself -size and competitive factors MARKET FACTORS -direct channel-concentrated market w/ small number of buyer -marketing intermediarygeographically disperse, small amount of purchase PRODUCT FACTORS -complex products-direct to buyers -low unit cost-long channel ORGANIZATIONAL AND COMPETITIVE FACTORS -broad product line-direct to buyers

DETERMINING DISTRIBUTION INTENSITY-number of intermediaries through w/c a manufacturer distributes its goods in particular market -adequate market coverage-goal of firm, type of product, consumer segments Intensive distribution-distribute through all available channels in trade area -wide appeal across broad groups of consumer Selective distribution-limited retailers to handle line -reduce total marketing cost w/ strong relationship w/ channel -retailers comply w/ rules for advertising, pricing and displaying Cooperative advertisingmanufacturer pays percentage of retailers advertising expenditures for display of product for mutual benefit EXCLUSIVE DISTRIBUTIONproducer grants exclusive rights to wholesaler and retailer to sell its product to specific geographic area -quality and prestige Problems of ED Exclusive dealing agreementsprohibits marketing intermediary from handling competing product -high price shopping goods

-specialty products, accessory equipment Closed sales territories-restrict distribution to certain geographic regions -legality depends if it decreases competition -imposes horizontal (retailerwholesaler to avoid competition of seller of same product from same producer)/vertical (producer/wholesaler/retailer increase competition of brands) restrictions Tying agreements-channel members to become exclusive dealers only of they also carry products other than those they want to sell CHANNEL MANAGEMENT AND LEADERSHIP focus on channel management by developing and maintaining relationships w/ intermediaries in their marketing channel -manage incentives to induce channel members to promote their product -partnership w/ other channel members for high levels of coordination, commitment and trust Channel captain-dominant member marketing channel Channel con

Channel conflict Horizontalconflict from disagreements among members of the same channel level -causes sparks between different types of marketing intermediaries that handle similar product Vertical-frequent and severe conflict among members of different channel level Grey market-competing own brands produced by overseas affiliates Grey goods-goods produced at overseas market at lower price Achieving channel cooperation -effective cooperation among channel members Cooperation-equal members of same organization Channel captain-leadership VERTICAL MARKET SYSTEM -planned channel system to improve distribution efficiency and cost effectiveness by integrating various function throughout distribution chain Forward integration-control downstream distribution Backward-manufacturer gain greater control over inputs in production process

-extend control of wholesaler and retailer to producer -improves chances for controlling and coordinating the steps in production/distribution process -development of economies of scale -expand into profitable new business *increase risk of controlling entire distribution chain Corporate and administered system-single owner operates the entire marketing channel Administered-achieves channel coordination when dominant channel member exercises its power Contractual system-coordinates distribution through formal agreements among channel members Wholesaler-sponsored voluntary chain-preserve market by strengthening retail customer -formal agreement between intermediaries to use common name and standardized facilities and purchase wholesaler goods -line of private brands for retailer -smaller retailers compete w/ rival chains -strengthen wholesaler position

Retail cooperatives-retailers established a shared wholesaling operation to help them compete w/ chains -purchase ownership and agree to buy minimum percentage of inventories -common store name, common private brands Franchise-wholesaler agrees to meet the operating requirements of manufacturer -use company brand name, services, marketing, advertising