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Wholesaling
Chapter 13
Marketing Channels


Definition
Intermediaries



Transactional role
Logistical role
Facilitation role
Marketing Channels- B2C
Marketing Channels- B2B

Direct Marketing Channels


Dual Distribution


L.L. Bean
Hallmark
Strategic Channel Alliances

Kraft & Starbucks
Channel Intermediaries

Merchant Wholesalers

Full-service
General-merchandise
 Specialty-merchandise


Limited-service
Rack jobbers
 Cash & carry
 Drop shippers
 Truck jobbers

Agents & Brokers




Characteristics
Manufacturer’s Agents
Selling Agents
Brokers
Channel Partnerships

Vertical Marketing Systems

Corporate
Forward integration: Sherwin-Williams
 Backward integration: Kroger


Contractual
Wholesaler-sponsored Voluntary Chains
 Retailer-sponsored Cooperatives
 Franchising


Administered

Administered Vertical Marketing Systems
Channel Partnerships


Collaborative use of information and open
communication
Levi Strauss and Modell’s Sporting Goods
Factors Determining Channels
Choice




Environmental Factors
Consumer Factors
Product Factors
Company Factors
Considerations



Target Market Coverage
Buying Requirements
Profitability
Considerations

Target Market Coverage



Intensive distribution
Exclusive distribution
Selective distribution
Considerations

Buyer Requirements


Information
Convenience
Proximity
 8-second rule


Variety


Breadth and depth of products offered by
intermediary
Attendant Services
Considerations

Profitability

How are margins divided?
Global Market

Must consider intermediaries in foreign
markets
Types of Conflict

Vertical conflict




Disintermediation
Profit margin distribution
Attention given to products
Horizontal conflict


Infringement upon market area
Different retailers selling same brand
Cooperation

Channel Captain




Economic influence
Expertise influence
Identification influence
Legitimate influence
Legal Issues

Dual distribution



Too much power?
Exclusive Dealing
Tying Arrangements
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