Marketing_L8_2013-2014

How Adding a Distributor Reduces the Number of

Channel Transac>ons

The role of marke>ng intermediaries is to transform the assortments of products made by producers into the assortments wanted by consumers.

Key func>ons

of the marke>ng channel members

•  Informa&on: Gathering and distribu&ng marke&ng research and intelligence informa&on about actors and forces in the marke&ng environment needed for planning and aiding exchange.

•  Promo&on: Developing and spreading persuasive communica&ons about an o er.

•  Contact: Finding and communica&ng with prospec&ve buyers.

•  Matching: Shaping and fi_ng the o er to the buyer’s needs, including ac&vi&es such as manufacturing, grading, assembling, and packaging.

•  Nego&a&on: Reaching an agreement on price and other terms of the o er so that ownership or possession can be transferred.

Others help to fulfill the completed transac&ons:

•  Physical distribu&on: Transpor&ng and storing goods.

•  Financing: Acquiring and using funds to cover the costs of the channel work.

•  Risk taking: Assuming the risks of carrying out the channel work.

Number of Channel Levels

Channel level

A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

Consumer and business marke&ng channels with even more levels.

greater number of levels= less control and greater channel complexity

Channel Behavior and Organiza&on

Channel Behavior

•  Channel conflict

Disagreement among marke&ng channel members on goals, roles, and rewards— who should do what and for what rewards.

Horizontal conflict

Its occurs among firms at the same level of the channel.

In recent years, Burger King has had a steady stream of conflicts with its franchised dealers over everything from adver>sing content to the price of its cheeseburgers.