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 |  Marketing A McGraw Hill and QUT Custom Publication
Managing Marketing Chanels and Wholesaling
Learning ObjectivesChapter 8 - Outline
AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
- Explain what is meant by a marketing channel of distribution and why intermediaries are needed.
- Recognize differences between marketing channels for consumer and business products and services in domestic and global markets.
- Describe the types and functions of firms that perform wholesaling activities.
- Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems.
- Describe factors considered by marketing executives when selecting and managing a marketing channel, including channel conflict and legal restrictions.
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Chapter 8 - Summary
- A marketing channel consists of individuals and firms involved in the process of making a product or service available for use by consumers or business users.
- Intermediaries make possible the flow of products and services from producers to buyers by performing transactional, logistical, and facilitating functions. At the same time, intermediaries create time, place, form, and possession utility.
- Channel structure describes the route taken by products and services from producers to buyers. Direct channels represent the shortest route because producers interact directly with buyers. Indirect channels include intermediaries between producers and buyers.
- In general, marketing channels for consumer products and services contain more intermediaries than do channels for business products and services. In some situations, producers use Internet, direct marketing, multiple channels and strategic channel alliances to reach buyers.
- Numerous types of wholesalers can exist within a marketing channel. The principal distinction between the various types of wholesalers lies in whether they take title to the items they sell and the channel functions they perform.
- Vertical marketing systems are channels designed to achieve channel function economies and marketing impact. A vertical marketing system may be one of three types: corporate, administered, or contractual.
- Marketing managers consider environmental, consumer, product, and company factors when choosing and managing marketing channels.
- Channel design considerations are based on the target market coverage sought by producers, the buyer requirements to be satisfied, and the profitability of the channel. Target market coverage comes about through one of three levels of distribution density: intensive, exclusive, and selective distribution. Buyer requirements are evident in the amount of information, convenience, variety, and service sought by consumers. Profitability relates to the margins obtained by each channel member and the channel as a whole.
- Marketing channels in the global marketplace reflect traditions, customs, geography, and the economic history of individual countries and societies. These factors influence channel structure and relationships among channel members.
- Conflicts in marketing channels are inevitable. Vertical conflict occurs between different levels in a channel. Horizon-tal conflict occurs between intermediaries at the same level in the channel.
- Legal issues in the management of marketing channels typically arise from six practices: dual distribution, vertical integration, exclusive dealing, tying arrangements, refusal to deal, and resale restrictions.
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2003 McGraw-Hill Higher Education