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A set of independent organizations involoved in the process of making a product or service available to its intended market.
Multi-Firm Marketing Channels bring companies together that...
- 1) Perform independent activites well through specialization
- 2) Work well together in a system.
- 3) Can protect the system from rival systems-thus creating a comopetitive advantage.
Multi-Firm Marketing Channel: You can expect...
- Increase availability of goods to potential customers.
- Better satisfy the customer.
- Encourage promotional push.
- Allows for transfer of information betweel the FIRM<->MARKET.
- Increases Cost Effectiveness.
- Allows for Flexibility.
- Helps create a Compoetitive Advantage
- Reduces risk to the firm
Channel of Distribution
Consists of interdependent entities that are aligned for the purpose of transferring possession of a product from producer to consumer or business user.
Channel Alternatives (Direct) Producer <->Consumer
- Facilitated by interactive communication methods.
- Catalog; TV; Internet; Telephone; Door-to-Door
- Direct Response- good for information exchange
- Good if firm has one well identified target market.
Producer <-> Retailer <-> Consumer
- Allows producer to focus on producing.
- Done when retailers are large enough to do wholesaling function themselves (Walmart)
- Selective Distribution- retailer who is not everywhere.
Producer <-> Agent and/or wholesaler <-> Retailer <-> Consumer
- Low Cost, frequently purchased items
- Packaged foods, health and beauty aids.
- Intensive distribution
- Agents are used when the producer is too small to have sales staff find wholesalers.
Multi or Duel Channel
Uses more than one path. Allows different consumer segments to get your product.
Channel Decisions- Hybrids
When different supply chain activities (value) are delivered to customer using a mulit-channel design.
Channel Decisions- Push and Pull
Strategies deal with stimulating demand for the product.
Push and Pull
- Push strategies involve the producer stimulating middle-man demand.
- Provide channel members with incentive to buy more product bulk rates, allowances...
- This gives retailers incentive to PUSH your product onto the customer.
Push and Pull
- Pull strategies involve the producer stimulating end-customer demand.
- Provide the end-customer with incentive to buy more product- mfg. coupons, buy 1 get 1 free...
- Customers want the product more so reailers buy more to satisfy demand.
Channel Decisions- Services
Tend to be SHORT
May include a distributor especially in franchise situations
Recall- distribution means getting the product to the place and at the time the customer wants
- Out patient clinics for a hospital
- Restaurant 'kiosks'