Marketing Articles Essay Assignment (Instruction Sheet.docx

Marketing Articles Essay Assignment: (Instruction Sheet)
(100 points possible)
Based on the assignment schedule you are required to locate a
peer-reviewed
journal article that addresses a marketing institutions (channels
of
distribution) related issue that relates to class discussions,
lectures, and
textbook readings.
The UC Riverside Library is a great source for peer reviewed
journal articles
https://library.ucr.edu/. The library list 25 databases for
business. You are
required to use APA formatting.
Students will then read, analysis, evaluate and reflect on the
article and then
write and post your completed assignment on Blackboard
pertaining to the
following items (1000 words minimum no maximum) APA
formatting is required
which includes a title page and the appropriate heading for the
following:
1. (30% of Grade) A brief summary of the key point(s) of the

article.
2. (30% of Grade) Discuss and describe how this article related
to various
key concepts examined in this course and the implications for
marketing
practitioners.
3. (40% of Grade) The student’s personal reaction and several
detailed
recommendations to the article based upon the marketing
perspective
gained during the course. Write this as if you were a marketing
consultant
or employee and were giving this recommendation to your client
or
manager. Please do not give a recommendation to read this
article.
Make sure to back-up your recommendations with evidence,
remember to
cite your references properly.
In doing this assignment, you look beyond the textbook to find
“real-life”
examples of the concepts discussed in class.
Running head: Title Of Assignment 1
Title Of Assignment 2UNIVERSITY OF CALIFORNIA
RIVERSIDE
School of Business
September 24, 2022

Marketing institutions (channels of distribution)
, Article Review and Recommendation
Submitted in partial fulfillment
of the requirements for the degree
of Bachelor of Science in Business Administration
Students Nam
ID#:
Group Name
UNIVERSITY OF CALIFORNIA RIVERSIDESummary of the
key point(s) of the article
A brief summary of the key point(s) of the article.
Relationship to key concepts examined in this course
Discuss and describe how this article related to various key
concepts examined in this course and the implications for
marketing practitioners.
Student’s personal reaction and several detailed
recommendations
The student’s personal reaction and several detailed
recommendations to the article based upon the marketing
perspective gained during the course. Write this as if you were
a marketing consultant or employee and were giving this
recommendation to your client or manager. Please do not give a
recommendation to read this article. Make sure to back-up your
recommendations with evidence, remember to cite your
references properly. References

©2013 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
CHAPTER 1
Marketing Channel
Concepts
Part 1: Marketing Channel Systems
website, in whole or in part.©2013 Cengage Learning. All
Rights Reserved. May not be scanned, copied or duplicated, or
posted to a publicly accessible website, in whole or in part.
Le
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①
The growing importance of marketing channels
②The definition of marketing channels

③
How marketing channels relate to strategic
variables in the marketing mix
④
The flows in the marketing channels and their
relationship to channel management
⑤
The principles of specialization, division of labor,
and contactual efficiency
⑥
The difference between the concepts of channel
structure and of ancillary structure
2
Objective Why the growing importance of
marketing channels?
1 The explosion of information technology
and E-commerce
2 A greater difficulty in gaining a sustainable
competitive advantage
3 The growing power of distributors,
especially retailers in marketing channels
4 The need to reduce distribution costs

3
1
4
The prediction:
Disintermediation – reduction
of number of intermediaries
The reality:
Reintermediation – evolution
of a new type of intermediary
Yahoo!
eBay
Amazon.com
1 The explosion of information technology and E-
commerce
2 A greater difficulty in gaining a sustainable competitive
advantage
3 The growing power of distributors, especially retailers in
marketing
channels

1 The explosion of information technology and E-commerce
2 A greater difficulty in gaining a sustainable
marketing
channels
5
Place (distribution), or
Marketing Channel
Strategy
Potential for gaining
because place is more
difficult for competitors
to copy
Sustainable
competitive

advantage
advantage
3 The growing power of distributors, especially
retailers in marketing channels
Power retailers as of consumer markets
Act as buying agents for customers rather than
as selling agents for manufacturers
Gatekeepers
advantage

marketing
channels
Marketing channels are the most
recent target for
reducing distribution costs.
The focus is on
channel structure and
management.
Objective
What is a marketing channel?
8
2
Outside
the firm Firm involved in
negotiatory
functions

Management’s
involvement
in the process
Goals that change, causing variations in
contactual organization & the way in
which management operates it
External contactual organization that management
operates to achieve its distribution objectives
What is a channel manager?
Anyone in a firm or
organization who is
involved in marketing
channel decision making

Objective How does marketing channel strategy
relate to the
rest of the marketing mix?
Marketing
Mix
or
the four Ps
Challenges
Product Limited ability to gain and hold competitive
advantage
Price Price wars erode profitability & provide unstable
basis for sustaining competitive advantage
Promotion Expensive and short-lived
Place
(Distribution)
Marketing channels support & enhance other Ps
to meet demands of target markets
3

The change of focus to
channel strategy
• Creates competitive advantage
with long-term viability
• Builds strong relationships
between manufacturers and
channel members
• Based on trust, confidence,
and people power
11
Channel Strategy and Logistics
Management
Part of distribution variable
• Concerned with entire
process of starting and
operating contactual
organization
• Formulated before

logistics management
Focused specifically on
providing product
availability at appropriate
time & place
Objective
Marketing Channel Flows
Product Flow
Promotion Flow
Information Flow
Ownership Flow
Negotiation Flow
4

Product Flow
Manufacturer
Transportation
Company
Wholesalers
Retailers
Consumer
Negotiation Flow
Manufacturer
Wholesalers
Retailers
Consumer

Ownership Flow
Manufacturer
Wholesalers
Retailers
Consumer
Information Flow
Manufacturer
Transportation
Company
Wholesalers
Retailers
Consumer

Promotion Flow
Manufacturer
Advertising
Agency
Wholesalers
Retailers
Consumer
Objective
Distribution through intermediaries
Technology The Internet
Economic Specialization &

Considerations Division of Labor
Contactual Efficiency
Factors that determine
the role of intermediaries
5
Specialization & Division of Labor
Distribution Tasks Production Tasks
Distributed
Inter-organizationally
Distributed
intraorganizationally
Contactual Efficiency

Granada Guitar Co.
Negotiation
Effort
Estimated Dollar
Costs of Inputs
Distribution
Objective
(Output)
Contactual
Efficiency
100 sales visits
100 phone calls
20 magazine
ads
@ $50 = $5,000
@ 3 = 300
@1,000 = 20,000
$25,300
Get 500
music
stores to
carry new
guitar line
Negotiation
effort in
dollar terms

relative to
achieving
the
distribution
objective =
$25,300
Objective Channel Structure v. Ancillary
Structure
Channel Structure
The group of channel members to
which a
set of distribution tasks has been
allocated
Ancillary Structure
The group of institutions that
assist channel members in performing
distribution tasks
Why are single-
channel

structures currently
the exception?
Why is managing
the ancillary
structure most likely
to be less complex
than managing the
channel structure?
6
Growth in online retail sales has been outstripping
conventional sales in retail stores. This online sales growth
might be enhanced significantly by the latest online sales
phenomenon of mobile commerce—shopping via mobile
smart phones such as Apple’s iPhone, Research in Motion’s
Blackberry, or Google’s NexusOne. But so far, of the almost
50 million smart phone users that have access to the
Internet, only about 7 million (under 15%) have actually
bought something through their phones during the course
of a year.
Do you think mobile commerce via smart phone will
grow rapidly in the future? Why or why not?
Discussion Question #3

CHAPTER 2
The Channel
Participants
Le
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①Major participants in marketing channels
②Why shift distribution tasks to intermediaries?
③Major types of wholesalers
④Major Trends in Wholesale Structure
⑤Merchant Wholesalers Specialize in Performance
Distribution Tasks
⑥Retail structure
⑦Retail structure trends
⑧Distribution Tasks Performed by Retailers
⑨Retailers’ Growing Power in Marketing Channels
⑩Facilitating Agencies in Marketing Channels
2
Objective Major Participants in Marketing
Channels1
Producers
&

Manufacturers
Wholesale
Intermediaries
Retail
Intermediaries
Intermediaries
Consumers Industries
Final Users
* Commercial Channel * Target Markets
Objective Why shift distribution tasks to
intermediaries? 2
Producers
&
Manufacturers
• Lack expertise
• Lack economies of scale
Intermediaries

• Spread high fixed costs
over large quantities of
diverse products
• Achieve economies of
scope and economies of
scale
5
• Huge order processing
facility
• Huge inventory
• Several warehouse
locations
• Transportation of
product to consumers
= cost
prohibitive
Manufacturer direct
to customers

Example: Distribution of Crayons
Objective Major Types of Wholesalers
3
Merchant
wholesaler
Agents, brokers,
&
commission
merchants
Independent
middlemen
Manufacturers'
sales branches
&
offices
Manufacturer
owned
All Wholesale Firms

Merchant Wholesalers
Tasks Performed:
Buy
Take title
Hold Inventory
Handle
Large quantities of
products
Resell to:
Retailers
Industrial,
commercial,
or
institutional
concerns
Other
Wholesalers

Agents, Brokers, & Commission
Merchants
Involved in buying &
selling
while acting on behalf
of clients
Commissions
on
sales or purchases
Owned & operated by
manufacturers
Distribute
manufacturer’s
products at

wholesale
Some wholesale allied &
supplementary products
purchased from other
manufacturers.
Manufacturers’ Sales Branches & Offices
Separated from manufacturing plants
Objective
Major Trends in Wholesale Structure
42.0% Wholesale trade
26.5% Manufacturer’s sales
branches & offices
51.7% Merchant wholesalers
36.7% Agents, brokers, &
commission merchants
1992—2002

4
Trends in Size & Concentration
Measured by: Types of Wholesalers
Size of
wholesaler
Majority are small businesses
Sales volume Nearly 45% of all firms have annual sales
of less than $1 million
# of Employees per
firm
About 50% of firms had fewer than 5
employees
Economic
concentration in terms
of % of total sales
50 largest manufacturers’ sales branches
& offices garnered nearly 63% of sales for
this type

Objective Merchant Wholesalers Specialize in
Performance Distribution Tasks
• Operate at high levels of effectiveness and efficiency
• Average cost curves lower than those for their suppliers
1. Provide market coverage
2. Make sales contacts
3. Hold inventory
4. Process orders
5. Gather market information
6. Offer customer support
5
Merchant Wholesalers’ Distribution
Tasks Serve Customers
1. Assure product availability

2. Provide customer service
3. Extend credit & financial
assistance
4. Offer assortment convenience
5. Break bulk
6. Help customers with advice &
technical support
Agent Wholesalers’ Distribution
Tasks
Manufacturers’
Agents
Ø Market coverage
Ø Sales contacts

Tasks
Ø Market coverage
Ø Sales contacts
Ø Order processing
Ø Marketing Information
Ø Product availability
Ø Customer services
Selling
Agents
Tasks
Ø Market coverage
Ø Sales contacts
Ø Order processing
Ø Marketing Information
Ø Product availability
Ø Customer services
Brokers

Tasks
Ø Market coverage
Ø Sales contacts
Ø Order processing
Ø Breaking bulk
Ø Credit
Ø Holding inventory
Commission
Merchant
Objective Retail Structure
• By Ownership of Establishment
• By Kind of Business
(Merchandise Handled)
• By Size of Establishment
• By Degree of Vertical
Integration

• By Type of Relationship with
other Business Organizations
• By Method of Consumer
Contact
• By Type of Location
• By Type of Service
Rendered
• By Legal Form of
Organization
• By Management
Organizations or
Operational Technique
Alternative Bases for Classifying Retailers
6
Kind-of-Business Classifications
• Motor vehicle & parts
dealers
• Furniture & home

furnishings stores
• Electronics & appliance
stores
• Building material & garden
equip. & supply dealers
• Food & beverage stores
• Health & personal care
stores
• Gasoline stations
• Clothing & clothing
accessories stores
• Sporting goods, hobby,
book, & music stores
• General merchandise
stores
• Miscellaneous store
retailers
• Non store retailers
Retail Trade

Objective Retail Structure Trends
Decreasing number of establishments
Increasing sales
= increase in size of retail establishments
measured by average sales volume
per store
7
Concentration in Retailing
In 2002
4% of all retail firms
accounted for nearly 80%
of total sales!!

Objective Distribution Tasks Performed by
Retailers
The role of the retailer in the distribution channel,
regardless of his size or type, is to interpret the
demands of his customers and to find and stock the
goods these customers want, when they want them,
and in the way they want them. This adds up to having
the right assortments at the time customers are ready
to buy.
— Charles Y. Lazarus
8
Distribution Tasks Performed by
Retailers
• Offer manpower & physical facilities close to
consumers’ residences
• Provide personal assistance to help sell products
• Interpret and relay consumer demand
• Divide large quantities into consumer-sized lots
• Offer storage

• Remove risk by ordering in advance of the season
Objective Retailers’ Growing Power in
Marketing Channels9
Increased size & buying
power
Become power retailers
&
category killers
Application of advanced
Technologies
Information technology &
the Internet; threetailing
Use of modern marketing
strategies
Modern techniques;
relationship marketing

Objective Facilitating Agencies in Marketing
Channels
• Transportation agencies
• Storage agencies
• Order processing agencies
• Advertising agencies
• Financial agencies
• Insurance companies
• Marketing research firms
10
Best Buy is by far the largest consumer electronics retailer in
the
world with sales of over $45 billion and almost 4,000 stores
world wide.
Best Buy enjoys tremendous power in the marketing channels
within
which it operates. All manufacturers and other suppliers
providing
products to Best Buy have to pay close attention to what this
1,000

pound gorilla of a retailer wants. But even when suppliers go
out of their
way to meet the demands of Best Buy, they are finding that the
giant
retailer could block them from getting their products to
consumers
because Best Buy may favor certain suppliers with which it can
make
especially attractive deals. In addition, Best Buy is increasing
its
emphasis on offering its own private brand products such as the
thinnest
laptop on the market and an all-electrical motorcycle. Some of
Best
Buy’s own products may even compete directly with famous
supplier
brands, such as Apple and Sony.
Why do you think Best Buy is flexing its muscles in the
channel? Do
you think this type of behavior is inevitable on the part of giant
dominant retailers?
CHAPTER 3
The Environment
of Marketing

Channels
Le
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①The external environment – five factors
②The economic environment
③The competitive environment
④Types of competition
⑤The sociocultural environment
⑥The technological environment

⑦The legal environment
⑧Legal issues in channel management
2
Objective
The External Environment – 5 Factors
Consists of all external
uncontrollable factors within which
marketing channels exist
Affects channel members and nonmembers, such
as facilitating agencies
=
All channel participants
1

The Environment
Environment
1. Economic
2. Sociocultural
3. Competitive
4. Technological
5. Legal
Producers
& Manufacturers
Intermediaries
Target Markets
Facilitating
agencies
Locus of
channel
management
Nonmember
participants
Member
participants

Objective The Economic Environment
Recession Inflation
Deflation
2
Major
Economic
Forces
Recession
Consumer
and/or
Corporate
spending

=
Channel
strategy:
Manufacturers provide channel member
support by financing high inventory costs
Reduced sales
volume
Reduced
profitability
Firms caught with
large inventories
Inflation
Continued high spending
OR
Drop-offs in spending, fueling a
recession
Possible channel strategies:
1. Reduce manufacturer’s product mix from higher-
price to lower-price products

2. Reduce inventory burden on members with:
• Streamlined product line
• Faster order processing & delivery
• Higher inventory turnover through
stronger promotional support
Deflation
Prices
Challenge:
Pass cost-induced price increases through channel
when built-in cost pressures from labor contracts
were negotiated several years earlier
Other Economic Factors

1. Real interest
rates
Demand
Costs
=
2. Strong U.S. Dollar
Difficult to sell
products through
channel members
U.S. products
less competitive
=
Objective The Competitive Environment
Global in scope: “No longer is it
realistic for domestic firms to
focus only on rivals within the
boundaries of their own country.”
Global marketplace, global arena, global

competition; terms that describe today’s
market.
3
Objective Types of Competition
Horizontal
Intertype
Vertical
Channel System
4
Horizontal Competition
M

W
R R
W
M
Intertype Competition
M
W
R
M
W
R

Vertical Competition
M
R
W
Channel System Competition
M
M
M
M
M
M

Objective The Sociocultural Environment
5
Influences wide variations
among
channel structures worldwide
Influences both national
and
international
marketing channels
Pervades all aspects of
a society
Sociocultural Developments
Population Age
Patterns
Ethnic Mix

Educational Trends
Family or Household
Structure
U.S. pop. Becoming
both younger &
older
# of minority-owned
businesses
Levels = people
more demanding
Smaller & more varied
Role of Women # = changing
shopping needs
Objective The Technological Environment
Help retailers & wholesalers closely monitor success or
failure of products they handle
Scanners & EDI
Computerized inventory management

& Portable computers
6
The Technological Environment
EDI - Electronic
Data
Interchange
• Links together channel
information systems
• Provides real-time responses
• Enhanced by Internet
= Enhanced
Distribution
Efficiency

The Technological Environment
Accelerating
technology
“Computer sales
People”
Mobile
robots 3-D
modeling
Ultra-wideband
technology
Objective The Legal Environment
The set of laws that impact marketing channels
• Continually evolving
• Affected by changing values, norms, politics,
& precedents
• Knowledge of basics helps channel manager

avoid serious & costly legal problems
7
Legislation Affecting Marketing
Channels
Sherman Antitrust Act
1890; Fundamental antimonopoly law
Public welfare best served through competition
Clayton Act
1914; Strengthen Sherman Antitrust Act
Prohibits specific practices among competing firms
Federal Trade Commission Act
1914; Established FTC
Power to investigate & enforce

Legislation Affecting Marketing
Channels
Robinson-Patman Act
1936; Amendment to Clayton Act
Prohibits price discrimination
Allows price differentials to different customers
under specific circumstances
Celler-Kefauver Act
1950; Amendment to Clayton Act
Prohibits vertical mergers & acquisitions
Objective Legal Issues in Channel
Management
• Dual Distribution, or multi-channel distribution
Producer or manufacturer uses 2 or more different channel
structures for distributing the same product
• Exclusive Dealing
Supplier requires its channel members to sell only its products

or to
refrain from selling directly to competitive suppliers
• Full-Line Forcing
Supplier requires channel members to carry a full-line of its
products in order to sell any particular products in supplier’s
line
8
Legal Issues in Channel Management
• Price Discrimination
Supplier sells at different prices to the same class of channel
members
• Price Maintenance
Supplier dictates prices charged by channel members to their
customers
• Refusal to Deal
Supplier has right to refuse to deal with whomever they want as
channel members

Legal Issues in Channel Management
• Resale Restrictions
Manufacturer attempts to stipulate to whom and in what
geographical market channel members may resell the
manufacturer’s products
• Tying Agreements
Supplier sells a product to a channel member on condition that
the
channel member also purchase another product
• Vertical Integration
Firm owns and operates organizations at other levels of the
distribution channel

Almost 80 percent of chief financial officers at the 100 largest
retailers say that too much inventory is the greatest risk factor
to the
viability of their businesses during recessionary periods. High
inventories lead to heavy discounting when consumer demand is
lacking. This, in turn, undermines gross margins. When demand
is very
weak, gross margins can disappear completely as retailers may
be
forced to liquidate slow moving merchandise at prices below
their
wholesale cost. Paradoxically, retailers also worry about having
too
little inventory to meet consumer demand and thus losing sales
when
consumers cannot find the products they are looking for on
retailers’
shelves. Hence, retailers attempting to manage their inventories
during a recession often feel that when it comes to stocking
their
shelves, they are damned if they do and damned if they don’t.
How might retailers deal with this inventory dilemma more
effectively during recessionary periods? What might suppliers
do to
help retailers address this problem?

Home Depot, Toys “R” Us, Staples, Best Buy and many other
giant retailers (often referred to as “category killers” or “big
box”
retailers because of their dominance in particular merchandise
categories and the sheer physical size of the stores) are fierce
competitors and are frequently accused of driving small
retailers
out of business. Observers who have witnessed this competitive
struggle take place over the past decade say the reason that
small retailers go out of business is that they “can’t compete”
with these giants. The verdict in most cases has been “no
contest” between the retail giants and the little guys because the
little guy so seldom wins or even gets to stay in business. From
a
competitive standpoint, is such an outcome inevitable?
Discuss. Is it really the “big guys” driving the “little guys” out
of business or is there something more fundamental at work
here?
By 2009, social media services, such as Facebook and
Twitter, had become a popular marketing tool for small
businesses. In fact, almost 25 percent of firms with fewer
than 100 employees were using social media for marketing
purposes. This was more than double the percentage of the

prior year. Many of these firms cite the ease of use and low
cost of these social media as the main reason for using
them for reaching out to and communicating with potential
and existing customers.
How can the ability to communicate with customers via
social media enhance channel management? Discuss.

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