Chapter 15 – Distributing Products
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PowerPoint slide notes
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Chapter Title
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Learning Goals
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Learning Goals
Chapter 15 – Distributing Products
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Tony Hsieh
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Name That Company
Company: Kia
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What Are Marketing Intermediaries?
1. Ask the students, How many of you think market-
ing intermediaries are an unnecessary cost? (Often
a majority of students will respond emphatically
with a yes.)
2. Use this as a basis to begin this chapter and an op-
portunity to explain the benefits these intermediar-
ies play.
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Selected Channels of Distribution
1. Different types of products will get to market via
different channels of distribution.
2. Often small producers will bypass wholesalers and
retailers, taking their products directly to the mar-
ketplace.
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Why Marketing Needs Intermediaries
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How Intermediaries Create
Exchange Efficiency
Intermediaries do add cost, as many assume, but they al-
so create an efficient exchange of product. Many students
are surprised how intermediaries create value for the con-
sumer.
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Three Key Facts about Marketing
Intermediaries
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Distribution’s Effect on Your Food
Dollar
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Intermediaries Create Utility
Chapter 15 – Distributing Products
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How Marketers Use Utility
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How Marketers Use Utility
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How Marketers Use Utility
Chapter 15 – Distributing Products
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Progress Assessment
1. A channel of distribution consists of agents, bro-
kers, wholesalers, and retailers that join together to
transport and store goods in their path or channel.
2. Marketing intermediaries perform tasks such as
transporting, storing, selling, advertising, and rela-
tionship building. They are able to perform these
tasks faster and more cheaply than most manufac-
turers, creating a cost savings.
3. The reason that marketing intermediaries have not
ceeds their cost.
4. There are six types of utility provided by interme-
diaries:
ple, retail butchers cut pork chops from a
larger piece of meat.
ing them available to consumers when
they want them. Convenience stores like
7-Eleven and QuikTrip provide time utility
since they are open 24 hours a day.
• Place utility occurs when products are
placed where people want them. Again 7-
two-way flows of information between
marketing participants. Newspapers, web-
sites, and salespeople all provide infor-
mation utility.
• Service utility is added by providing fast,
friendly service before and after the sale.
This is a critical area for most retailers,
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Roles of Agents and Brokers
Agents and brokers do not take title or possession of the
product but simply represent the interest of their clients.
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Retailing in the U.S.
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Pop! Goes the Retail Store
The aim of these types of pop-ups is to create lasting rela-
tionships with customers, rather than just distribute the
products.
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Fastest-Growing Retail Categories
1. This slide presents the fastest-growing retail catego-
ries.
2. Have students brainstorm reasons why they believe
these categories are growing at a fast rate.
3. Ask the students, What value do consumers see in
these particular categories?
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How to Prevent Coupon Fraud
1. Retail fraud cost the industry approximately $10
billion a year.
2. In our current economic state, coupon fraud is be-
coming more and more prevalent.
3. This slide shows how businesses can protect them-
selves.
4. Ask the students, Is it illegal to counterfeit cou-
pons? Is it ethical?
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How to Prevent Return Policy Fraud
1. Retail fraud cost the industry approximately $10
billion a year.
2. In our current economic state, more and more cus-
tomers are returning products after personal use.
3. This slide shows how businesses can protect them-
selves.
4. Ask the students, Should retailers have stricter re-
turn policies? What would you do if you owned a
shop and customers were returning used goods?
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Types of Retail Stores
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Retail Distribution Strategies
The retail strategy employed often depends on the prod-
uct one is selling.
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Pick a Strategy . . .
• Ralph Lauren Polo shirts—selective strategy
• Diet Pepsi—intensive strategy
• Rolls-Royce automobiles—exclusive strategy
• Calloway golf clubs—selective strategy
• Snickers candy bars—intensive strategy
• Steinway pianos—exclusive strategy
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Progress Assessment
1. Rack jobbers furnish racks full of merchandise like
toys and health and beauty aids to retailers. They
display the items and sell them on consignment,
keeping title to the goods until they are sold. Drop
shippers solicit orders and have the merchandise
shipped directly from producer to the buyer. They
own the merchandise but do not handle it, stock it,
or deliver it.
2. Intensive distribution includes convenience items
such as gum, magazines, candy, and cigarettes. Se-
lective distribution includes items such as applianc-
es, furniture, and clothing. Exclusive distribution
includes specialty products such as fly-fishing gear
or equipment for snow skiing.
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Forms of Non-Store Retailing
In many countries vending machines, kiosks, and carts
are more popular than in the United States. The Japanese
Vending Machine Manufacturers Association estimates
there is one vending machine for every 23 people, selling
everything from soft drinks to umbrellas.
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What Online Stores Need
1. Online retailing is relatively new and is evolving to
be more customer-friendly.
2. This slide gives students an idea of the important
features on e-commerce websites.
3. The lack of these features often causes people to
shy away from making purchases online.
4. Ask the students, Do you have hesitations about
shopping online? Why or why not?
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Forms of Non-Store Retailing
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The Four Systems of Channel Relationships
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Corporate Distribution Systems
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Contractual Distribution Systems
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Administered Distribution Systems
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Supply Chains
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The Supply Chain
Supply-chain management is a key to effective distribu-
tion in the 21st century. This slide illustrates to students
how supply chains are structured and implemented in the
market.
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The Global Supply Chain for Services
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Using Logistics
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lecture
links
“The solving of the problem lies in finding the solvers.”
Van Herpen’s Law
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WHY THERE ARE NO INDIAN WAL-MARTS
If you needed to buy a bag of rice or a CD player in Delhi, India, you wouldn’t be able to go to
the local Wal-Mart to buy it. You probably would wind up at the Big Bazaar store, where electronic
Big retailers like Wal-Mart and Tesco have long eyed this huge this market, but you won’t find a
single store in the country. Those big retailers can’t enter the Indian market, thanks to restrictions on for-
eign investment. Even the promise of lower prices and more efficient supply chains haven’t been enough
to overcome the political power of India’s 12 million shopkeepers. These small entrepreneurs account for
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WHATEVER HAPPENED TO DOOR-TO-DOOR DELIVERY?
Not too long ago in America, there were vendors who delivered goods door-to-door. One person
brought milk and left it on the porch. Another person brought ice for the “ice box.” They are now called
refrigerators and have their own icemakers. Still other people brought bread or coffee. Now, most of those
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WHOLESALE CLUBS THRIVE IN THE RECESSION
If there’s a silver lining to the recession, it’s that consumers have become more cost-conscious
regarding the items they need and buy. But while this may be a lesson well learned for most people, it’s
been a nightmare for retail companies. Even stores that offer essential items like food have taken a beat-
ing. Thanks to increased price competition as well as the harsh economy, chains like Kroger and Wal-