Essentials of Marketing, 8th Edition

1
Chapter 10 Place and Development of Channel
Systems
2
Chapter 10 Objectives
When you finish this chapter, you should

• 1. Understand what product classes suggest about
  Place objectives.
• 2. Understand why some firms use direct channel
  systems while others rely on intermediaries and
  indirect systems.
• 3. Understand how and why marketing specialists
  develop to make channel systems more effective.
• 4. Understand how to develop cooperative
  relationships and avoid conflictsin channel
  systems.

• 5. Know how channel members in vertical
  marketing systems shift and share functionsto
  meet customer needs.
• 6. Understand the differences between intensive,
  selective, and exclusive distribution.
• 7. Understand the important new terms.

10-2
3
Strategy Decision Areas in Place
Exhibit 10-1
10-3
4
Why a Firm May Want to Use Direct Channels
Greater Control
Lower Cost
Some Reasons for Choosing Direct Channels
Value added subsequent to production process
Direct contact with Customer Needs
Quicker Response or Change in Marketing Mix
Suitable Middlemen Not Available
10-4
5
Four Examples of Basic Channels of Distribution
for Consumer Products
Exhibit 10-2
10-5
6
Regrouping Activities
10-6
7
Managing Channel Relationships
10-7
8
Vertical Marketing Systems
Exhibit 10-3
10-8
9
Market Exposure
What Market Exposure Fits the Marketing Objectives
number of outlets
10-9
10
Key Terms
Place Channel of Distribution Direct
Marketing Discrepancy of Quantity Discrepancy of
Assortment Regrouping Activities Accumulating Bu
lk-Breaking Sorting Assorting Traditional
Channel Systems Channel Captain
Vertical Marketing Systems Corporate
Systems Vertical Integration Administered
Systems Contractual Systems Ideal Market
Exposure Intensive Distribution Selective
Distribution Exclusive Distribution Dual
Distribution Reverse Channels