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


FIGURE 15-5 Common marketing channels for business offerings by the
kind and number of intermediaries

15-11


FIGURE 15-6 Consumer electronic marketing channels are similar to those
for consumer and business offerings

15-12


CHANNEL STRUCTURE & ORGANIZATION
LO2

DUAL DISTRIBUTION &
STRATEGIC CHANNEL ALLIANCES

 Dual Distribution

 Strategic Channel Alliances

15-13


FIGURE 15-7 Functions performed by independent wholesaler types

15-14


CHANNEL STRUCTURE & ORGANIZATION

LO2

CHANNEL INTERMEDIARIES

 Merchant Wholesalers

•

Full-Service Wholesalers

 General Merchandise
(Full-Line) Wholesalers

 Specialty Merchandise
(Limited-Line) Wholesalers

15-15


CHANNEL STRUCTURE & ORGANIZATION

LO2

CHANNEL INTERMEDIARIES

 Merchant Wholesalers

•

Limited-Service Wholesalers

 Rack Jobbers
 Cash and Carry Wholesalers
 Drop Shippers/Desk Jobbers

15-16


CHANNEL STRUCTURE & ORGANIZATION

LO2

CHANNEL INTERMEDIARIES

 Agents and Brokers

•

Manufacturer’s Agents

•

Selling Agents

•

Brokers

 Manufacturers

•

Branch Offices

•

Sales Offices

15-17


CHANNEL STRUCTURE & ORGANIZATION

LO2

VERICAL MARKETING SYSTEMS

 Vertical Marketing Systems
 Corporate Systems

•

Forward Integration

•

Backward Integration

 Contractual Systems

•

Wholesaler-Sponsored Voluntary Chains

•

Retailer-Sponsored Cooperatives

15-18


CHANNEL STRUCTURE & ORGANIZATION

LO2

VERICAL MARKETING SYSTEMS

 Contractual Systems

•

Franchising

 Manufacturer-Sponsored Retail Franchise
Systems

 Manufacturer-Sponsored Wholesale Systems
 Service-Sponsored Retail Franchise Systems
 Service-Sponsored Franchise Systems
15-19


LO2

CHANNEL STRUCTURE & ORGANIZATION
VERICAL MARKETING SYSTEMS

 Administered Systems

 Channel Partnership

15-20


FIGURE 15-8 Three types of vertical marketing systems: corporate,

contractual (most popular), and administered

15-21


CHANNEL CHOICE AND MANAGEMENT

LO3

CHANNEL CHOICE CONSIDERATIONS

 Target Market Coverage

•

Intensive Distribution

•

Exclusive Distribution

•

Selective Distribution

15-22


Retail Store Distribution
●Intensive

-many outlets as possible
-Convenience Goods

• Selective
-Preferred group of
outlets in an area
-Shopping Goods

• Exclusive
-One retail outlet per area
-Specialty Goods


CHANNEL CHOICE AND MANAGEMENT

LO4

CHANNEL RELATIONSHIPS

 Channel Captain

 Channel Influence

•

Economic

•

Identification

•

Expertise

•

Legitimate Right

15-24


FIGURE 15-9 The Clayton Act and Sherman Act place legal restrictions on
specific marketing channel strategies and practices

15-25