1. CHAPTER 14: Marketing Channels and Supply Chain Management

2. TYPES OF DISTRIBUTION CHANNELS
A. Direct Selling
- direct sales between buyer & seller
Ex. Mary Kay, Tupperware, Baskets
B. Marketing Intermediaries: Figure 14.1

3. DUAL DISTRIBUTION
Use of 2 or more distribution channels to reach the same target market.

4. REVERSE CHANNELS Backward movement of goods from user to the producer
Ex. recycling

5. Functions of Intermediaries
Create:
TIME UTILITY
PLACE UTILITY
OWNERSHIP UTILITY

6. Types of Wholesaling Intermediaries
1. Manufacturer-Owned Facilities
- sales branches & offices
2. Independent Wholesaling Intermediaries
- account for majority of wholesaling establishments & wholesale sales in U.S.
Merchant wholesalers: take title to goods they handle
Agents & Brokers: may or may not take possession of goods but they never take title

7. 3. Retailer-Owned Facilities
- independent retailers may band together to form buying groups to get cost savings thru quantity purchases

8. Factors Affecting Channel Strategy Decisions
1. MARKET FACTORS
whether product is intended for the consumer (long) or the business (short) market
2. PRODUCT FACTORS
perishable or complex products(short channels)
generally the more standardized the product, the longer the channel

9. 3. PRODUCER FACTORS 4. COMPETITIVE FACTORS
companies w/ adequate financial, managerial & marketing resources are less compelled to utilize intermediaries in marketing their products
4. COMPETITIVE FACTORS
inadequate promotion of products may require manufacturers to develop unique distribution channels

10. Distribution Intensity
1. INTENSIVE DISTRIBUTION
- used for convenience goods
Ex. Gum, soda, candy, cigarettes
2. SELECTIVE DISTRIBUTION
- a firm chooses only a limited number of retailers in a market area to handle its product line
Ex. Nike

11. 3. EXCLUSIVE DISTRIBUTION
- extreme form of selective distribution
- most often used for specialty goods
Suboptimization

12. Modes of Transportation
Truck
Internet
Railroad
Pipeline
Air
Water Carriers