Chapter 15: Marketing Channels and Supply Chains

multichannel marketing

The blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online

dual distribution

a company uses two different distribution channels simultaneously to sell the same products to the same target market. Typically, one channel is direct to consumer and the other is indirect to retailers or distributors (ex. GE appliances sold directly to home builders while retail stores like Lowe's sell the same appliance to consumers)

logistical function

assorting, storing, sorting, transporting

transactional function

buying, selling, risk taking

how do intermediaries do their job? (6 types)

direct channel, indirect channel, digital channel, vertical marketing system, multichannel, dual distribution

digital channel

e-commerce (ex. Amazon, Shopify)

place utility

having a product physically where you want it (ex. a gas station located on a lonely highway)

time utility

having a product when you want it (ex. Amazon same-day delivery)

possession utility

helps buyers take possession of a product with ease of payment and use

distributor

intermediary who performs a variety of functions, including selling, maintaining inventories, extending credit, etc.

retailer

intermediary who sells to consumers

wholesaler

intermediary who sells to other intermediaries, usually to retailers

agent

intermediary with legal authority to act on behalf of of the manufacturer

marketing channel

network that brings products to consumers

indirect channel

one or more intermediaries between the producer and the consumer

direct channel

the producer and the consumer deal directly with each other, no intermediaries

3 functions of intermediaries

transactional, logistical, facilitating

form utility

enhancing a product to make it more appealing to buyers (ex. Coca-Cola bottles)

facilitating function

financing, grading, marketing information and research