In the past year, trade practices between fresh produce shippers and food retailers gained national attention. Shippers are concerned that recent retail consolidation has led to market power and the growing incidence of fees and services. Retailers argue that these new trade practices reflect their costs of doing business and the demands of consumers. Trade practices include fees such as
Chapter 15
Distributing Products
15-1
The emergence of marketing intermediaries
-Marketing intermediaries: organizations that assist in moving goods and services from
producers to businesses (B2B) and from businesses to consumers (B2C)
-Channel of distribution: a whole set of market of marketing intermediaries, such as
agents, brokers, wholesalers, and retailers, that join together to transport and store goods
in their path (or channel) from producers to consumers
-Agents/brokers: marketing intermediaries who bring buyers and sellers together and
assist in negotiating an exchange but don’t take title to the goods
-Wholesaler: a market intermediary that sell to other organizations
- Retailer: an organization that sells to ultimate consumers
*Why marketing needs intermediaries
-Intermediaries perform certain marketing tasks – such as transporting, storing, selling,
advertising and relationship building – faster and cheaper than most manufacturers could
15-2
The utilities created by intermediaries
-Utility: in economics, is the want-satisfying ability, or value, that organizations add to
goods or services by making them more useful or accessible to consumers than they were
before
*Form utility
-Changing raw materials into useful products
*Time utility
-Adding value to the products by making them available when they’re needed
*Place utility
-Adding value to the product by having them where people need
*Possession utility
-Doing whatever is necessary to transfer ownership from one party to another, including
providing credit, delivery, installation, guarantees, and follow up service
*Information utility
-Adding value to products by opening two-way flows of information between marketing
participants
*Service utility
-Adding value by providing fast, friendly service during and after the sale and by teaching
customers how to best use products overtime
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organizations that assist in moving goods from businesses to businesses (B2B) and from businesses to consumers (B2C)
a group of marketing intermediaries that job together to transport goods
intermediaries who bring buyers and sellers together
an intermediary that sells products to other organizations such as retailers
The want-satisfying ability that organizations add to goods and service by making them more useful
1. firm
2. time
3. place
4. possession
5. information
6. Service
changes raw materials into useful products
makes products available when customers need them
adds value to products by placing them where people want them
help transfer ownership from one party to another
opens two way flows of information between marketing participants
provides service during and after a sale and teaches customers how to best use products
independent owned firm that take title to the goods they handle
furnish racks or shelves of merchandise such as music
cash and carry wholesalers
serve mostly smaller retailers with a limited assortment of products
Take orders from retailers and other wholesalers
puts products into as many retail outlets as possible
uses only a preferred group of the available retailers in an area
The use of only one retail outlet in a given geographic area
selling goods and services to ultimate consumers over the Internet
The sales of goods and services via the telephone
selling goods and services to customers in their homes
Any activity that directly links manufactureres with customers
The four systems of channel relationships
l. Corporate distribution systems
2. Contractual distribution systems
3. Administered distribution systems
4. Supply chains
Corporate distribution Systems
Exist when one firm owns all the organizations in a channel of distribution
contractual distribution systems
exist when members are bound to cooperate through contractual agreements
administered distribution systems
exist when producers manage all the marketing functions at the retail level
All the linked activities various organizations must preform
The planning, implementing, and controlling of goods
bringing raw materials from suppliers to producers
movement of goods within a warehouse
manages the flow of finished products and information to business buyers and consumers
brings goods back to the manufacturer because of defects or for recycling
puts many small shipments together to create a large one
uses multiple model of transportation to complete a single long distance movement of freight