Chapter Fourteen

1
Chapter Fourteen

• Channels of Distribution

2
Middlemen

• a company or person that renders services related
  to the sale of a product as it flows from the
  producer to the consumer.
• Merchant middlemen
• actually takes title of merchandise
• wholesalers
• retailers

3
Middlemen (continued)

• Agent middlemen
• never actually take title of merchandise, they
  simply arrange for the transfer of merchandise
• real estate broker
• travel agent.

4
The Distribution Channel

• set of individuals /or companies involved in the
  transfer of goods from the producer to the
  ultimate consumer.
• Value added is key factor in the distribution
  channel
• change of form
• convenient location
• providing service or modification.

5
Intermediaries

• companies that aid in the distribution process
• banks
• financial institutions
• insurance companies
• transportation companies.

6
Direct Distribution

• uses no middlemen
• only producer and consumer.

7
Indirect Distribution

• uses at least one middleman
• uses a wide range of options
• retailer
• wholesaler
• agents
• distributor.

8
Vertical Marketing Systems

• a tightly coordinated distribution channel
• companies own or have an interest in parts of the
  distribution channel
• example
• Goodyear manufactures
  tires and sells its tires
  through Goodyear
  Tire Stores.

9
Intensity of Distribution Systems

• intensive distribution
• sells product through every possible outlet
• used for convenience goods
• selective distribution
• sells product through multiple outlets, but not
  all outlets
• used for shopping goods

10
Intensity of Distribution Systems (cont.)

• exclusive distribution
• sells product only through specialized outlets
• used for specialty goods.