5. Channel Functions Contact Financing Information Risk Taking Promotion Matching Negotiation Physical Distribution These functions should be assigned to the channel member who can add the most value for the cost
10. Disintermediation Travel supersites such as Expedia, Travelocity, Priceline, Hotels.com, and Orbitz have threatened the very existence of traditional travel agents.
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12. Channel Design Dimensions Channel Length= Number of Levels in the Channel Channel Intensity = Number of middlemen at each stage in the channel of distribution (e.g. retailing): One ……… Or ………Many?
13. Marketers in Asia must pay special attention to the shopping preferences of their target customers in order to design distribution channels. Are customers buying from their local markets, up-market malls or even on the Internet?
19. Channel Management Decisions Selecting Channel Members Managing & Motivating Channel Members Evaluating Channel Members
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21. Types of Retailers Retailers are classified based on : Amount of Service They Offer Breadth & Depth of Product Lines Relative Prices Charged How They Are Organized
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24. Product Line Classification Specialty Stores: Carry narrow product lines with deep assortments within those lines . Department Stores: Carry a wide variety of product lines—typically clothing, home furnishings, and household goods. Each line is operated as a separate department managed by specialist buyers or merchandisers.
25. Product Line Classification Supermarket: Large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of food, laundry, and household products. Convenience Stores: Small stores located near residential areas that are open long hours 7 days a week and carry a limited line of high-turnover convenience goods.
26. Product Line Classification Superstores: Much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. Category Killers: Giant specialty stores that carry a very deep assortment of a particular line and is staffed by knowledgeable employees.
27. Relative Prices Classification Discount Store: A retail institution that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume. Off-Price Retailer: Retailer that buys at less-than-regular wholesale prices and sells at less than retail. Examples are factory outlets, independents, and warehouse clubs.
28. Relative Prices Classification Factory Outlet: Off-price retailing operation that is owned and operated by a manufacturer and that normally carries the manufacturer’s surplus, discontinued, or irregular goods. Independent Off-Price Retailer: Off-price retailer that is either owned and run by entrepreneurs or is a division of a larger retail operation.
29. Relative Prices Classification Warehouse Club: Off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay annual membership fees.
30. Organizational Classification Chain Stores: Two or more outlets that are owned and controlled, have central buying and merchandising, and sell similar lines of merchandise. Voluntary Chain: A wholesaler-sponsored group of independent retailers that engages in bulk buying and common merchandising.
31. Organizational Classification Retailer Cooperative: A group of independent retailers that bands together to set up a jointly owned, central wholesale operation and conducts joint merchandising and promotion efforts. Franchise: A contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.
32. Franchising is a popular method of retailing organization (a 7-Eleven store in Japan)
33. Organizational Classification Merchandising Conglomerates: A free-form corporation that combines several diversified retailing lines and forms under central ownership, along with some integration of their distribution and management functions.
36. Retail stores communicate the brand’s positioning strategy . Here we see the entrance to a Louis Vuitton store exuding every bit of opulence to complement the prestige of the product
37. Assortment and Services Decisions Product Assortment: Brand of merchandise Merchandising events Services Mix: Different numbers and types of services are key to non-price store differentiation Store Atmosphere: Physical layout and “feel” of the store
38. Price, Promotion, & Place Decisions Price policy must fit its target market and positioning, product and service assortment, and competition Can use any or all of the promotion tools—advertising, personal selling, sales promotion, public relations, and direct marketing—to reach consumers Retailers can locate in CBDs, various types of shopping centers, strip malls, or power centers Location, Location, Location!
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40. Many retail outlets such as Starbucks have become places for customer hangouts
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