chapter 7
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DHD2010 MKT243 Fundamental Of Marketing 1
Fundamental Of MarketingMKT243
Chapter 7Marketing Channels
DHD2010 MKT243 Fundamental Of Marketing 2
Slide Outline
Marketing channels Channel intermediaries and their
function Channel Structure Channel strategy decision
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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
A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer
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Types of Channel Intermediaries 1. RETAILER
Sell products mainly for final users orConsumer market
2. MERCHANT WHOLESALER
Buy products from Manufacturers, and
Resells to business users(government, wholesaler,
Or retailers)Takes title to product
Or stores
3. AGENT & BROKER
Do not take any title on product.Facilitate selling
Activities for Producers
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Why Channel member are used?
1) Provide specialization and division of labor
2) Overcoming Discrepancies Discrepancy of quantity Temporal discrepancy Spatial discrepancy Discrepancy of assortment
3) Providing contact efficiency
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The Nature and Importance of Marketing Channels
How Channel Members Add Value
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Channel Structure(Consumer Product)
Direct channel Retailer channel Wholesaler Agent/broker
channel channel
Producer
Consumers
Producer
Retailers
Consumers
Producer Producer
Wholesalers
Retailers
Consumers
Agent/ brokers
Wholesalers
Retailers
Consumers
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Channel Structure(Business and Industrial Product)
Direct Channel Direct channel Industrial Agent/broker Agent/ broker- distributor channel industrial distributor
Producer
Industrial User
Producer
Government Buyer
Producer Producer
Industrial distributor
Industrial User
Agents/broker
Industrial user
Producer
Agents/broker
Industrial distributor
Industrial user
MKT243 Fundamental Of Marketing
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Channel Design Decisions
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Factors Suggesting Type of Wholesaling Intermediary to Use
Product characteristicsProduct characteristics
Buyer considerationsBuyer considerations
Market characteristicsMarket characteristics
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Factor Affecting Channel Choices
1. Market factors-Target customer consideration-Must consider the geographical/ location, market size and level of competition
2. Product factors-Nature of the products characteristics -PLC-Delicacy of the product e.g: Perishable, fragile
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Factor Affecting Channel Choices
3. Producer factors-Producers’ capabilities and performance-Managerial and financial-Marketing resources
MKT243 Fundamental Of Marketing
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