Marketing Channels and Supply Chain Management

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Marketing Channels and Supply Chain Management by Mind Map: Marketing Channels and Supply Chain Management

1. Distribution - Movement of goods and services from producers to customers

2. Types of Marketing Channels

2.1. Marketing intermediary - Organization that operates between producers and consumers or business users

2.2. Resellers

2.2.1. Wholesaler – firms that acquire large quantities of products from manufacturers/producers and then sort,store and resell them to retailers, businesses or sometimes end consumers. Takes title to the goods it handles

2.2.2. Retailers – all channel members who are involved in selling products or services to consumers. Takes title to the goods it handles

2.3. Brokers

2.3.1. Agents – people who facilitate the exchange of products but do not take title(i.e purchase) anything that they sell.

2.4. Facililtators

2.4.1. Transportation companies –organizations that assists in the distribution of products but do not take title or negotiate sales.

3. functions of marketing channels

3.1. Facilitating the exchange process by reducing the number of marketplace contacts necessary to make a sale

3.2. Adjusting for discrepancies in the market’s assortment of goods and services via sorting

3.3. Standardizing exchange transactions by setting expectations for products

3.4. Facilitating searches by both buyers and sellers

4. Marketing (distribution) channel - System of marketing institutions that enhances the physical flow of goods and services, along with ownership title, from producer to consumer or business user

5. Logistics - Coordinating the flow of information, goods, and services among members of the distribution channel

6. Supply-chain management - Control of the activities of purchasing, processing, and delivery through which raw materials are transformed into products and made available to final consumers

7. Physical distribution - Broad range of activities aimed at efficient movement of finished goods from the end of the production line to the consumer

8. Channels Using Marketing Intermediaries

8.1. Producer to wholesaler to retailer to consumer

8.1.1. The traditional channel for consumer goods

8.1.2. Gives small producers access to hundreds of retailers

8.1.3. Gives small retailers access to wholesaler’s specialized distribution skills

8.2. Producer to wholesaler to business user

8.2.1. Industrial distributor - Intermediaries in the business market that take title to goods

8.3. Producer to agent to wholesaler to retailer to consumer

8.3.1. Common in markets served by small companies

8.3.2. Agent may or may not take possession of goods but does not take title

8.4. Producer to agent to wholesaler to business user

8.4.1. An agent or broker, often called a manufacturer’s representative, markets small producer’s offerings through large wholesalers

8.4.2. Provides an independent sales force to contact wholesale buyers

8.5. Producer to agent to business user

8.5.1. Independently owned wholesaler takes title to the goods

8.5.2. Common in transactions with large unit sales in which transportation is a small percentage of the total cost


9.1. Intensive distribution - Distribution of a product through all available channels

9.2. Selective distribution - Distribution of a product through a limited number of channels

9.3. Exclusive Distribution - Distribution of a product through a single wholesaler or retailer in a specific geographic region

10. Legal Problems of Exclusive Distribution

10.1. Exclusive dealing agreement - Prohibits a marketing intermediary from handling competing products

10.2. Closed sales territories - Restrict their distributors to certain geographic regions

10.3. Tying agreements - Allow channel members to become exclusive dealers only if they also carry products other than those that they want to sell


11.1. HORIZONTAL CONFLICT Disagreements among channel members at the same level, such as two competing discount stores

11.2. VERTICAL CONFLICT Occurs among members at different levels of the channel

11.3. THE GRAY MARKET Goods produced for overseas markets that re-enter the U.S. market and compete against domestic versions


12.1. Customer service

12.2. Transportation

12.3. Inventory control

12.4. Protective packaging and materials handling

12.5. Order processing

12.6. Warehousing


13.1. Common carriers - Provide transportation services as for-hire carriers to the general public

13.2. Contract carriers - For-hire transporters that do not offer their services to the general public

13.3. Private carriers - Provide transportation services solely for internally generated freight


14.1. Direct channel - Carries goods directly from a producer to the business purchaser or ultimate user

14.2. Direct selling - Strategy designed to establish direct sales contact between producer and final user