Marketing Notes – Channels

Distribution Channel

• Set of interdependent organizations
• Area of complex decision making for a firm
• High potential for conflict

Channel Issues

• Members and levels
• Motivation and compensation
• Channel integration
• Cost vs control

Channel Functions

• Physical possession
• Title / Payment
• Risk taking
• Financing
• Information
• Promotion

Retailing Categories

• Type of product or service
• Type of customer service
• Type of organization
• Location

Wholesaling

• Link between chain extremes
• Wholesalers
• Distributors
• Agents
• Varying levels of support

Purchasing

• Recall the business-to-business purchasing discussion

Why be Part of a Channel System?

• Reduced financial risk
• Stimulated demand
• Merchandising assistance

Advantages/Disadvantages of Particular Channels

• Company-owned dealerships
• Franchised dealerships
• Direct mail
• Direct sales