Principles of marketing: Lecture 31
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MGT301
Principles of Marketing
Lecture31
Summary
of
Lecture30
Retailing and Wholesaling
Today’s Topics
Review 3rd P (Place)
Place….Distribution
Channel….Marketing Channel
Simple Marketing System
Communication
Product/Service
Producer/Seller
Money
Feedback
Consumer
Right
Place
Right
Cost
Right
Product
Right
Time
Right
Condition
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
20 Contacts
Manufacturer
Customer
Manufacturer
Manufacturer
Wholesaling
Intermediary
Manufacturer
Customer
Customer
Customer
Manufacturer
9 Contacts
How Channel Members Add Value?
Channel members add value by bridging the major time, place
and possession gaps that separate goods and services from
those who would use them.
Distribution Channel Functions
Risk
Risk Taking
Taking
Information
Information
Financing
Financing
Promotion
Promotion
Physical
Physical
Distribution
Distribution
Contact
Contact
Negotiation
Negotiation
Matching
Matching
M
M
Direct
Channel 1
M
M
Channel 2
M
M
C
C
R
R
C
C
R
R
C
C
R
R
C
C
In-Direct
W
W
Channel 3
M
M
Channel 4
W
W
JJ
Marketing Channels for Consumer
Goods
Producer
Consumer
Producer
Retailer
Producer
Producer
Wholesaler
Agent/
Broker
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Marketing Channels for Business Goods
Business
User
Producer
Producer
Agent/
Broker
Producer
Producer
Agent/
Broker
Business
User
Wholesaler
Business
User
Wholesaler
Business
User
Evaluation of Channel Alternatives
Economic Criteria
– Potential sales, costs and profits of channels
Control Criteria
Amount of control company has over sales efforts
Adaptive Criteria
flexibility of channel to adapt to changing situations
Channel Management Decisions
Motivating
Motivating
Evaluating
Evaluating
FEEDBACK
Selecting
Selecting
The channel will be most effective when..
Each member is assigned tasks it can do best.
All members cooperate to attain overall channel goals and
satisfy the target market.
Conventional Distribution Channel vs.
Vertical Marketing Systems
Vertical
Marketing
Channel
Manufacturer
Manufacturer
Wholesaler
Retailer
Consumer
Wholesaler
Conventional
Marketing
Channel
Retailer
Consumer
Logistic Management
Channels of
distribution
Two
Two different
different
perspectives
perspectives
Channels of
distribution
Two
Two different
different
perspectives
perspectives
Logistics
(Physical distribution)
Producer
Marketing
activities
Intermediaries
Demand
End users
Demand
Push Strategy
Marketing activities
Producer
Demand
Intermediaries
Demand
End users
Pull Strategy
Marketing Logistics and Supply Chain
Management
Functions of Logistics Systems
