Channels Of Distribution3
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Transcript of Channels Of Distribution3
Channels of Distribution
Channels of Distribution
Path a product takes from its producer or manufacturer to the final user. Personal useconsumer Businessindustrial user
Channel Members
Channels Members
Intermediaries Help move products from the manufacturer to the
final user Agent Intermediaries Merchant Intermediaries
Agent Intermediaries (Agents)
CommissionBring buyers and sellers togetherDo not own the goods2 types:
Independent Manufacturers Representative Work with many related, non-competing manufacturers
in an industry Brokers
Bring buyers and sellers together Do not have a continued relationship with either party
Merchant Intermediaries
Take title of the products2 types:
Wholesalers Buy large quantitiesresell to businesses Specialized wholesalers
Rack jobbers- Manage inventory/merchandising for retailers
Drop shipper- Own the goods they sell, but do not handle the products (bulk items)
Retailers Sell goods to the final user for personal use
Direct vs. Indirect Channels
Direct distribution Producer sells goods
directly to the customer
Advantages: Don’t share profit
margins Control over the sales
process
Indirect distribution 1 or more
intermediaries Advantages:
Efficient distribution logistics
Overall costs may be lower
Consumers may expect choice at point of sale
Producers may not have sufficient resources / expertise to sell direct
Distribution Channels:
Consumer products/services
Distribution Channels:
Industrial products/services
Resources
http://ww2.nscc.edu/gerth_d/MKT2220000/Lecture_Notes/unit13_files/image002.jpg
Marketing Essentials, 2009