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