...he third marketing mix tool is of importance since the success of a company depends not only on its own performance, but also on the total value chain, including the inbound, outbound and reverse (returning faulty products for example) distribution performance. Two remarks: good distribution strategies contribute strongly to create customer value companies or brands rarely compete with each other; their entire value delivery networks do ! Marketing channels: what and why? We distinguish upstream and downstream partners of a company: Upstream partners are the parties involved from the supplier of raw material, equipments, information, finance, components and expertise usually known as the supply chain to the company. Downstream partners traditionally consist of all parties involved that are in between the company and the customer, traditionally known as distributors (or wholesaler and retailer) to the customer This is however a “make-and-sell approach”. Better is to consider a “sense- and-response” approach involving all parties organized in a system (the value delivery network) in order to improve the entire system performance. Marketing Channels are thus a set of interdependent organizations that help make the product or service available for consumption or use by the final consumer or the business user. Market channel decisions: - affect the other mix decisions (product positioning, branding, price setting, sales force role, communications etc.) -...
Words: 329 - Pages: 2
...CHAPTER 12 GLOBAL MARKETING CHANNELS AND PHYSICAL DISTRIBUTION SUMMARY A channel of distribution is the network of agencies and institutions that links producers with users. Physical distribution is the movement of goods through channels. Business –to-consumer marketing uses consumer channels; business-to-business marketing employs industrial channels to deliver products to manufacturers or other types of organizations. Peer-to-peer marketing via the Internet is another channel. Distributors and agents are key intermediaries in both channel types. Channel decisions are difficult to manage globally because of the variation in channel structures from country to country. Marketing channels can create place utility, time utility, form utility, and information utility for buyers. The characteristics of customers, products, middlemen, and environment all affect channel design and strategy. Consumer channels may be relatively direct, utilizing direct mail or door-to-door selling, as well as manufacturer-owned stores. A combination of manufacturers' sales force, agents-brokers, and wholesalers may also be used. Global retailing is a growing trend as successful retailers expand around the world in support of growth objectives. Retail operations takes many different forms, including department stores, specialty retailers, supermarkets, convenience stores, discount stores, warehouse clubs, hypermarkets, supercenters, category killers, and outlet malls. Selection, price...
Words: 6820 - Pages: 28
...Channels of Distribution In the uncertain fluctuating market of today, it is essential for a company to hold on and face those uncertainties in order to survive. Consumers can be an aid for a company's survival, thereby it is essential for consumers to get the goods of a company whenever and however they need them. Here is where distribution channels come in and give hand. "Channels of distribution are the different paths that goods passed through in moving from the producer to the consumer", (Meyer et al, 1988). With the help of distribution channels, companies are able to overcome the time, place and possession gaps that separate goods and services from the consumers. As said by Aaker (1984), access to an effective and efficient marketing channel is often a key success factor. However, in this competitive era, an understanding of the alternative distribution channels and the trends in their relative importance can be of strategic importance for any company. For example, the growth and importance can be of a self service retail gasoline stations and the comparison growth in the importance of convenience stores such as the 7/11 chain in gasoline retailing has strategic significance to petroleum companies and distributors as well as to firms in food retailing (example adapted from Aaker, 1984). Additionally, because of competition, gaining distribution in some industries can be extremely difficult and costly. Nowadays, even large, established firms have trouble obtaining...
Words: 1481 - Pages: 6
...their goods directly to the final users between them stands a set of intermediaries performing a variety of functions. The process of distribution of goods involves all human and physical means which aid the smooth transfer of such good from the manufacturer to the final consumer. Nickeil (1998) The growing of distribution is a key strategy variable in marketing management. In deed, if one look at the major strategy of the marketing mix – product, price, promotion and distribution, the greatest potential for achieving a competitive advantage now lines in distribution. Distribution still offers a new frontier for competing usefully especially if the emphasis is placed on the design and management of superior marketing channel systems to provide excellent customer services. Yet design optimal marketing channel system to boost sales, formulating innovative distribution strategies and management channels system effectively is no simple task. To day, companies are faced with choice of distribution path or strategy that will make product readily available to potential customers. Achumba (1994). Also the need for other institutions or intermediaries in the delivery of good is sometime questioned, particularly since the profits they make are viewed as adding to the cost of product which may eventually slow down sales of the product. The concept of distribution refers to where and how product and services to be offered for sale and all essential mechanism and logistical supports for the transfer...
Words: 8072 - Pages: 33
...[Type the company name] | Marketing channels | 81,105, 117, 93, 69 | | [Type the author name] | 9/21/2010 | Marketing channel: A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user Channel level: A layers of intermediaries that the perform some work in bringing the product and its ownership closer to the final buyer. Channel conflict: Disagreement among marketing channel members. Vertical marketing system :A distribution channel structure in which producer wholsers , and retailers act as a unified system one channel members owns the others ,has contracts with them or has so much power that they all cooperate Future vertical marketing system divided in to two .They are 1.conventional marketing system 2.vertical marketing system Vertical marketing system: A vertical marketing system comprises of the producer, wholesaler and retailer acting as a unified system. One channel member, the channel captain owns the members and has so much power that they all cooperate. It arose as a result of strong channel member’s attempts to control channel behaviour. There are three types of VMS: CORPORATE, ADMINISTERED AND CONTRACTUAL. CORPORATE VMS: A corporate VMS combines successive stages of production and distribution under single ownership. For example Sears obtains over 50% of the goods it sells from companies that it partly or wholly owns. ADMINISTERED VMS: ...
Words: 2012 - Pages: 9
...Ch10 Marketing Channels Supply Chinas and the Value Delivery Network Upstream: Supply raw materials, components, parts, information, finances, and expertise Downstream: Marketing channels towards customers, including wholesales and retailers, * Supply chain: make-and-sell view, which suggest productive inputs as starting point * Demand chain: Sense-and-respond view But sometimes it takes a step-by-step, linear view of purchase-production-consumption activities Value Delivery network: A network composed of company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value The Nature and Importance of Marketing Channels Marketing Channel (Distribution channel): A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user * Affect every other marketing decision * Use imaginative distribution systems * Involve long-term commitment to other firms How Channel Members Add Value * Give up some control over how and to whom to sell products * But they create greater efficiency in making goods available to target markets by better contacts, experience, specialization and scale of operation * Intermediaries reduce the amount of work by both producers and consumers * Transform assortments of products made by producers...
Words: 1295 - Pages: 6
...exclusive distributors for the first four months after a movie's release. c. Windowing greatly benefited movie theaters. d. Windowing greatly threatened movie theaters. e. Windowing may be replaced with new approach to distribution that shortened the time consumers can purchase movies. 2. Which of the following is a false statement about the relationship between channel strategy and marketing strategy? a. Channel strategy is concerned with the place aspect of the marketing strategy. b. Channel strategy is narrower in scope than the marketing strategy. c. Channel strategy focuses on distribution objectives. d. The channel strategy is important to the firm’s overall objectives. e. The marketing channel strategy focuses on product, price, and promotion. 3. Channel strategy may be of more importance than the other strategic variables of the marketing mix and is also important to: a. The operations strategy. b. The development of the breadth of the product line. c. The firm’s overall objectives and strategies. d. The firm’s competitive position in the market place. e. The level of profits the firm achieves. 4. Which of the following is not one of the basic distribution decisions that most firms must address? a. Which individual should be chosen as channel...
Words: 2953 - Pages: 12
...Intercontinental University Unit 3 Individual Project MKTG 205 – Principles of Marketing Abstract When creating a marketing strategy the first thing to ascertain is the importance of distribution channels and how they work. The reader should have a better understanding of the distribution channel levels, channel organizations, as well as understand the best channel members to be utilized in each target market. Channel Distribution When assessing the different distribution channels it is very important to know that distribution channels are the ways in which companies sell their products and services. Knowing the target market and their demographic needs will help establishing a marketing strategy that is successful. Another important factor is to determine channel members and how many will be needed to successfully get products or services to their consumers. There are two different distribution levels in marketing; the direct distribution level and the indirect distribution level. According to Kerin, Hartley & Rudelius, (2013) the direct channel of marketing is when the producer and the ultimate consumers deal directly with each other. With a direct channel there is no intermediaries, the producer handles all channel functioning. A good example of a direct channel is an insurance company. The second distribution level is the indirect level. Unlike direct distribution the indirect distribution level has one or more intermediaries between the producers and the consumers...
Words: 821 - Pages: 4
...serious shortcomings of the traditional marketing channels emerge and accept the challenge, which requires color TV enterprises must begin marketing channel Marketing channel structure and function in areas such as channel improvements and options channel mode. This paper reviews the Marketing channels of China's color TV enterprises the change process, analyze the reasons for change the channel and proposed channel Marketing channel strategy for a Time of Change home appliances. [Keywords:] change color TV industry Marketing channels One of China's color TV industry, the changing course of Marketing channels 1.1 The reform and opening up previously Before the reform and opening up of China's color TV has not yet formed a complete industry, although a few companies able to produce black and white TV, but because of restrictions on people's living standards, only a very small number of urban households and even the 'privilege' home in order to spend household appliances, color TVs for the rural households is going to happen. During this period the basic characteristics of China's household electrical appliance is inadequate supply, color TV manufacturers in the market has the absolute right to speak. At this point, China is still in the planned economy era, the latter part of the planned economy to market economy, the gradual transition period, sales of color TV's main channel for delivery of five state-owned department...
Words: 1507 - Pages: 7
...1.0 Introduction The implementation of a distribution strategy without the coordination of other components of the marketing mix tends to produce a strategy without harmony. A disjointed marketing strategy will not reach the success levels that were expected. Organizations have come to realise the impact of distribution management as a source of competitive advantage with companies like Delta, Lobels and Bakers Inn employing distribution managers and personnel. This is because it has become more difficult to find a unique source of competitive advantage in an era where it is easy to copy strategies and products. Marketing managers are now looking to coordinate the promotion strategy with the distribution strategy, specifically push or pull strategy in relation to distribution strategies that include, intensive, selective or exclusive. Now the combination of these strategies is most important in an environment where the retailer and other relevant intermediaries are faced with so many product options to stock on their floor space. It then becomes apparent that the marketing manger that is able to gain the best and most floor space using one strategy, and persuade end customers to seek out and purchase the organization’s products in another strategy, becomes successful in gaining market share and meeting their objectives. This paper will define distribution management and its components. It will look at the impact of the Bullwhip Effect or the Forrester Effect, the push...
Words: 3931 - Pages: 16
...Principles of marketing Presented by Institution Abstract Marketers take into consideration various factors before releasing their products to consumers. Identification of threats and opportunities in a business environment forms the most vital issues that promote a successful marketing plan. Below is a market analysis of Samsung smart phones from the manufacturers to end users. The analysis uses direct distribution channel as the best distribution strategy for Samsung smart phones. In addition, a multi-channel distribution system was recommended that utilized only the catalogue and the sales force. The target market needs identified indicated that most Smartphone users demand the android operating system, and are very sensitive to original products from Samsung thus validating the direct distribution channel. Introduction In order to effectively sell their products, marketers must consider a number of factors that contribute to a perfect marketing and distribution plan. Some of the vital things to consider while marketing a product include the distribution channels to adopt, the target market needs and its effect on the chosen distribution channel, and the type of channel member to use, whether a retailer, wholesaler, manufacturer, or a dealer. According to Kotler & Armstrong (2001, p. 15), marketers should have the ability to identify threats and opportunities within a business environment in order to develop a perfect and successful marketing plan. The following...
Words: 1112 - Pages: 5
...QUIZ 1 CHAPTERS 1 & 2 MKT 315 WK 2 Quiz 1 Chapters 1,2 MULTIPLE CHOICE 1. Which type of strategy did Walmart decide to use to compete with Amazon? a. Heavy advertising b. Price reduction c. Establish kiosks in Walmart stores d. Wholesale distribution e. Mass distribution via its own online channel 2. Which of the following statements is false? a. Consumer expectations have moved firms to add additional channels. b. Both B2C and B2B businesses are increasing the number of channels they use to distribute their products c. The flexibility to respond to consumers does not appear to be relevant to channel design. d. Channels must be targeted to reach intended customer segments. e. The increasing role of technology is helping to foster the use of multiple channels. 3. Which of the following is a true statement about Internet-based channels? a. Walmart's channel model continues to rely on its 'brick and mortar' stores exclusively. b. ‘Bricks and Mortar’ retailers that added online capabilities to traditional channels of distribution have had sluggish sales. c. Online sales have become an established distribution channel for B2C but not B2B markets. d. Internet-based channels have become a mainstream channel in the channel mixes of many firms. e. The growth of E-commerce is beginning to slow. 4. A sustainable competitive advantage is one that a. lasts at least five years. b. is based on a superior product feature. c. usually stresses a lower price. d. is difficult...
Words: 1485 - Pages: 6
...Marketing Channels and Supply Chain Management Chapter Objectives • Explain why companies use distribution channels and discuss the functions these channels perform. • Discuss how channel members interact and how they organize to perform the work of the channel. • Identify the major channel alternatives open to a company. • Explain how companies select, motivate, and evaluate channel members. • Discuss the nature and importance of marketing logistics and integrated supply chain management. Chapter Overview This chapter covers the important topics of supply chain management. Supply chains consist of both upstream and downstream partners, including suppliers, intermediaries, and even intermediary customers. The term value delivery network expands on the limited nature of "supply chain." It consists of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system. The chapter focuses on marketing channels--the downstream side of the value delivery network. A company's channel decisions directly affect every other marketing decision. And because distribution channel decisions often involve long-term commitments to other firms, management must define its channels carefully, with an eye on tomorrow's likely selling environment as well as today's. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use...
Words: 6245 - Pages: 25
...Abstract It is important to understand the distribution channels. The information will explain the channel levels, organizations, understanding the target market and know the channel member that should be used. It also discusses how many channel members to use and the channel organization that should be used. Distribution Channels Introduction Distributions channels are the ways companies use to sell products and services. Knowing your target market and their needs will help to build a marketing strategy. Deciding on the channel member and how many will be used will help to get the product or service out on the market. Overview of Distribution Channels The function of distribution channels is to attract consumers to a certain product or service. In order to form a distribution channel there are a few factors that come into play. There should be plenty of market research, this is also important for marketing planning. Looking for prospective consumers and adjusting the product to fit the consumer’s needs. There should also be negotiating pricing and gaining and using funds to cover the distribution channel. Direct distribution is when the company sells directly to the consumers without a third party. Indirect is when there is a third party that is used like retailers and wholesalers. Analyze Target Market’s Needs in Distribution Channels It is important to narrow down the target market to an amount that is easy to manage. It is important to find out what their needs...
Words: 709 - Pages: 3
...Marketing Channels and Supply Chain Management Chapter Objectives • Explain why companies use distribution channels and discuss the functions these channels perform. • Discuss how channel members interact and how they organize to perform the work of the channel. • Identify the major channel alternatives open to a company. • Explain how companies select, motivate, and evaluate channel members. • Discuss the nature and importance of marketing logistics and integrated supply chain management. Chapter Overview This chapter covers the important topics of supply chain management. Supply chains consist of both upstream and downstream partners, including suppliers, intermediaries, and even intermediary customers. The term value delivery network expands on the limited nature of "supply chain." It consists of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system. The chapter focuses on marketing channels--the downstream side of the value delivery network. A company's channel decisions directly affect every other marketing decision. And because distribution channel decisions often involve long-term commitments to other firms, management must define its channels carefully, with an eye on tomorrow's likely selling environment as well as today's. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use...
Words: 6246 - Pages: 25
