Marketing Channels for Business Goods BusinessProducer User Agent/ BusinessProducer Broker User BusinessProducer Wholesaler User Agent/ BusinessProducer Wholesaler Broker User
Evaluation of Channel Alternatives Economic Criteria – -Potential sales, costs and profits of channels Control Criteria -Amount of control company has over sales efforts Adaptive Criteria -flexibility of channel to adapt to changing situations
Logistic ManagementChannels ofdistribution Two different Two different perspectives perspectives
Channels ofdistribution Two different Two different perspectives perspectives Logistics (Physical distribution)
Marketing Demand activities Interme-Producer diaries End users Demand Push Strategy Marketing activities Demand Interme- DemandProducer diaries End users Pull Strategy
Marketing Logistics and Supply Chain Management
Functions of Logistics Systems
Costs Costs Minimize Costs of Order Processing Order Processing Minimize Costs of Submitted Attaining Logistics Submitted Attaining Logistics Processed Processed Objectives Objectives Shipped Shipped LogisticsTransportation Functions Water, Truck, Warehousing WarehousingRail, Pipeline & Air Storage Storage Distribution Distribution Inventory Inventory When to order When to order How much to order How much to order Just-in-time Just-in-time
Customer Service Concept Customer service is the ability of logistics management to satisfy users in terms of: - time - dependability - communication - convenience
Companies today place greater emphasis on logistics because….. – Effective logistics is becoming a key to winning and keeping customers. – Logistics is a major cost element for most companies.
– The explosion in product variety has created a need for improved logistics management.– Information technology has created opportunities for major gains in distribution efficiency.
Classification of Retailing Retailing and Wholesaling
Amount of Service Amount of Service Self-Service, Limited-Service and Self-Service, Limited-Service and Full-Service Retailer Full-Service Retailer Product Line Product Line Length and Breadth of the Product Length and Breadth of the Product Assortment Assortment Relative Prices Relative Prices Pricing Structure that is Used Pricing Structure that is Used by the Retailer by the Retailer Retail OrganizationsIndependent, Corporate, or Contractual Ownership Organization
Mail Order Mail Order ••Catalogs --from clothing to computers Catalogs from clothing to computers••Direct Mail --brochure offering a product Direct Mail brochure offering a product or service at one point in time. or service at one point in time. Direct Selling Direct Selling ••Door-to-Door Sales --declining in U.S. Door-to-Door Sales declining in U.S. ••Parties & Networks --presentations Parties & Networks presentations ••Telemarketing --over the phone Telemarketing over the phone Automatic Vending Automatic Vending ••Best suited to inexpensive merchandise Best suited to inexpensive merchandise and food and beverages. and food and beverages. Direct Response Television Direct Response Television ••Home Shopping Networks --TV channels Home Shopping Networks TV channels that sell products that sell products
What is Wholesaling? All the activities involved in selling goods and services to those buying for resale or business use. Wholesaler - those firms engaged primarily in wholesaling activity.
Customer Expectations for Wholesaling
Easy EasyInquiry Inquiry Error-Free Error-Free and Accuracy Invoicing and Invoicing Order Order Reliable On-time On-time Delivery Delivery Delivery Post-Sales Post-Sales Easy Claims Easy Claims Support Support Handling Handling Suppliers’ Logistics Systems Suppliers’ Logistics Systems
Warehouse and Materials-Handling Receive goods into warehouse Identify, sort, andFunctions label goods ofMaterialsHandling Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment
Types of Wholesalers
Merchant Merchant Wholesaler Brokers/ Agents Brokers/ Agents WholesalerIndependently Owned Independently Owned They Don’t Take Title to They Don’t Take Title to Business that Takes Business that Takes the Goods, and They the Goods, and They Title to the Title to the Perform Only a Few Perform Only a Few Merchandise Merchandise Functions. Functions. it Handles. it Handles. Manufacturers’ Manufacturers’ Sales Branches Sales Branches and Offices and Offices Wholesaling by Sellers Wholesaling by Sellers or Buyers Themselves or Buyers Themselves Rather Than Through Rather Than Through Independent Independent Wholesalers. Wholesalers.
Right RightCost Place Right ProductRight RightTime Condition
Compete on value (not just price.)Save customers time and energy. Make shopping fun.