MMt Lecture 9: Distribution channels

Marketing Mix: Place (Distribution), Channels of distribution, Video: week 10

What is the definition of “channels of distribution”?

=set of interdependent organizations

(each have their own duties to fulfill and they depend on each other, most products are sold through retailers so they have a lot of power over the manufacturer (PB))

in the process (repeated exchange/interaction > they understand their partners very well = developed trust) of making sure that products are available for consumption

What is the correct order of distributors?

Part supplier → Manufacturer → Retailer → Consumer

What are the 4 utility values of channels?

1. place

2. form

3. search accessibility

4. reducing the number of transactions

What is “place” about?

transportation > moving products to a place where consumers can buy them

• high place utility: convenience stores (CostCo)

What is “form” about?

manufacturer produces a lot of products that are bought by the retailer and cut into small pieces/assortments  

• manufacturer: limited goods, huge quantities

• consumer: many goods, small quantities

What is “search accessibility” about?

intermediaries make search process easier (finding/comparing products more easily -> golden zone (products on eyelevel of the shelf), manufacturers have easier access to customers)

What is “reducing the number of transactions” about?

reducing the number of transactions (+ transaction costs) and therefore increasing efficiency

What can be a competitive advantage for channels?

Channel competitive advantage: efficient distribution system, being able to respond to demand quickly