Business in Action 6e Bove/Thill Distribution and Marketing Logistics Chapter 15.

Business in Business in Action 6e Action 6e Bovée/ThillBovée/Thill

Distribution and Distribution and Marketing Marketing LogisticsLogistics

Chapter 15Chapter 15

Learning Objectives

1. Explain the role of marketing intermediaries in contemporary business and list the eight primary functions that intermediaries can perform

2. Identify the major types of wholesalers and summarize four trends shaping the future of wholesaling

3. Identify the major retailing formats and summarize six trends shaping the future of retailing

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall15-2

Learning Objectives (cont.)

4. Explain the strategic decisions that manufacturers must make when choosing distribution channels

5. Identify five key attributes of distribution channel design and management

6. Highlight the major components of physical distribution and logistics


The Role of Marketing Intermediaries

Distribution Strategy A firm’s overall plan for moving products

through intermediaries and on to final customers

Marketing Intermediaries Businesspeople and organizations that assist

in moving and marketing goods and services between producers and consumers


Wholesaling versus Retailing

Wholesalers Intermediaries that

sell products to other intermediaries for resale or to organizations for internal use

Retailers Intermediaries that

sell goods and services to individuals for their own personal use


Contributions of Marketing Intermediaries

Matching buyers and sellersProviding market informationProviding promotional and sales supportGathering assortments of goodsTransporting and storing products


Contributions of Marketing Intermediaries (cont.)

Assuming risksProviding financingCompleting product solutionsFacilitating transactions and supporting

customers


Wholesaling and Industrial Distribution

Merchant Wholesalers Independent wholesalers that take legal title

to goods they distribute

Distributors Merchant wholesalers that sell products to

organizational customers for internal operations or the production of other goods, rather than to retailers for resale


Wholesaling and Industrial Distribution (cont.)

Agents and Brokers Independent wholesalers that do not take title

to the goods they distribute but may or may not take possession of those goods


The Outlook for Wholesaling


The Outlook for Wholesaling

Disintermediation The replacement of intermediaries by

producers, customers, or other intermediaries when those other parties can perform channel functions more effectively or efficiently


Retailing Formats

Wheel of Retailing An evolutionary process by which stores that

feature low prices gradually upgrade until they no longer appeal to price-sensitive shoppers and are replaced by a new generation of leaner, low-price competitors


Retailing Formats

Department Stores Large stores that carry a variety of products

in multiple categories, such as clothing, house wares, gifts, bedding, and furniture

Specialty Stores Stores that carry only a particular type of

goods, often with deep selection in those specific categories


Retailing Formats (cont.)

Discount Stores Retailers that sell a variety of everyday goods

below the market price by keeping their overhead low

Off-price Retailers Stores that sell designer labels and other

fashionable products at steep discounts


Retailing Formats (cont.)

Online Retailers Companies that use e-commerce

technologies to sell over the Internet; includes Internet-only retailers and the online arm of store-based retailers

E-commerce The application of Internet technologies to

wholesaling and retailing


The Outlook for Retailing

OvercapacityContinued growth in online retailingGrowth of multichannel retailingFormat innovationsRetail theaterThreat of disintermediation


The Outlook for Retailing

Multichannel Retailing Coordinated efforts

to reach consumers through more than one retail channel

Retail Theater The addition of

entertainment or education aspects to the retail experience


Distribution Strategies

Distribution Mix A combination of intermediaries and channels

a producer uses to reach target customers


Distribution Strategies

Customer needs and expectationsProduct support requirementsSegmentation, targeting, and positioningCompetitors’ distribution channelsEstablished industry patterns and

requirements


Common Distribution Channel Models


Common Distribution Channel Models (cont.)


Market Coverage

Intensive Distribution A market coverage strategy that tries to place

a product in as many outlets as possible

Selective Distribution A market coverage strategy that uses a

limited number of carefully chosen outlets to distribute products


Market Coverage (cont.)

Exclusive Distribution A market coverage strategy that gives

intermediaries exclusive rights to sell a product in a specific geographic area


Channel Conflict

Channel Conflict Disagreement or tension between two or

more members in a distribution channel, such as competition between channel partners trying to reach the same group of customers


Channel Organization and Control

Marketing Systems Arrangements by which channel partners

coordinate their activities under the leadership of one of the partners


Factors That Influence Distribution Channel Choices


Factors That Influence Distribution Channel Choices (cont.)


Physical Distribution and Logistics

Physical Distribution All the activities

required to move finished products from the producer to the consumer

Logistics The planning,

movement, and flow of goods and related information throughout the supply chain


Steps in the Physical Distribution Process


Physical Distribution and Logistics

Order Processing Functions involved in receiving and filling

customer orders

Distribution Centers Advanced warehouse facilities that specialize

in collecting and shipping merchandise


Physical Distribution and Logistics (cont.)

Intermodal Transportation The coordinated use of multiple modes of

transportation, particularly with containers that can be shipped by truck, rail, and sea


Applying What You’ve Learned

1. Explain the role of marketing intermediaries in contemporary business and list the eight primary functions that intermediaries can perform

2. Identify the major types of wholesalers and summarize four trends shaping the future of wholesaling

3. Identify the major retailing formats and summarize six trends shaping the future of retailing


Applying What You’ve Learned (cont.)

4. Explain the strategic decisions that manufacturers must make when choosing distribution channels

5. Identify five key attributes of distribution channel design and management

6. Highlight the major components of physical distribution and logistics


Business in Action 6e Bove/Thill Distribution and Marketing Logistics Chapter 15.

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