Lecture Basic Marketing: A global managerial approach - Chapter 11: Place and development of channel systems

In this chapter you will understand how and why marketing specialists develop to make channel systems more effective. Understand the universal functions of marketing. Understand why some firms use direct channel systems while others rely on intermediaries and indirect systems. Understand how to develop co-operative relationships - and avoid conflict - in channel systems,...
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Lecture Basic Marketing: A global managerial approach - Chapter 11: Place and development of channel systemsChapter11:Place andDevelopment ofChannel Systems For use only with Shapiro, Wong, Perreault, and McCarthy text Copyright © 2002 McGraw-Hill Ryerson Limited Exchange and Marketing Pots In very basic economic systems, each seller must meet directly with each buyer in order to Hats Baskets exchange something of value. As needs increase, the number of exchanges can soon become unmanageable for one person. Hoes Knives Ten exchanges are required when a central market is not usedExhibit112(A)112 For use only with Shapiro, Wong, Perreault, and McCarthy text Copyright © 2002 McGraw-Hill Ryerson Limited Marketing Facilitates Production and Consumption Production Sector Specialization and division of labour = heterogeneous supply capabilities Spatial Separation Discrepancies of Quantity Marketing Separation in Time needed to overcome Separation of Information discrepancies and separations Separation in Values Discrepancies of Assortment Separation of Ownership Consumption Sector Heterogeneous demand for form, task, time, place, and possession utilityExhibit113113 For use only with Shapiro, Wong, Perreault, and McCarthy text Copyright © 2002 McGraw-Hill Ryerson Limited Model of Market-Directed Macro-Marketing System Many Individual Producers intermediaries Facilitators Perform universal marketing functionsMonitoring by government(s) To overcome discrepancies and and public interest groups separations To create utility and direct flow of need-satisfying goods and services Many Individual ConsumersExhibit114114 For use only with Shapiro, Wong, Perreault, and McCarthy text Copyright © 2002 McGraw-Hill Ryerson Limited Regrouping Activities Bulk- Bulk- Breaking Breaking Accumulating Accumulating Sorting Sorting Assorting Assorting115 For use only with Shapiro, Wong, Perreault, and McCarthy text Copyright © 2002 McGraw-Hill Ryerson Limited Strategic Decision Areas in Place Place objectives Customer Type of service channel level desired Direct Indirect Type of physical distribution facilities needed Degree of market Intermediaries/ How to manage exposure desired facilitators needed channels116 For use only with Shapiro, Wong, Perreault, and McCarthy text Copyright © 2002 McGraw-Hill Ryerson LimitedWhy a Firm May Want to Use Direct Channels Greater GreaterControl Control Lower LowerCost Cost Value ValueAdded AddedSubsequent Subsequentto to Production Process Production Process Direct DirectContact Contactwith with Customer CustomerNeeds Needs Some Some Quicker QuickerRe ...