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CHAPTER OUTLINE AND TEACHING NOTES
C. Distribution Channels for Consumer
Goods
1. A small business has two channel
choices:
a. Sell directly to the consumer
REAL WORLD EXAMPLE 9.12
Ponchatoula, Louisiana strawberries are popular and per-
ishable. They must be sold and shipped quickly.
D. Distribution Channels for Industrial Goods
1. Channel 1 (direct from producer to in-
dustrial user) is the most frequently
used.
VII. SELLING THROUGH INTERMEDIARIES
Learning Objective 6.
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CHAPTER OUTLINE AND TEACHING NOTES
Describe the functions of intermediaries used in selling a
product.
A. INTERMEDIARIES are those units or in-
stitutions in the channel of distribution that
B. Brokers
1. BROKERS bring buyers and sellers
of goods together to negotiate pur-
C. Agents
1. AGENTS are marketing intermediar-
D. Wholesalers
1. WHOLESALERS are intermediaries
who take title to the goods handled
promotion.
E. Retailers
1. RETAILERS sell goods or services
directly to the ultimate consumers.
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CHAPTER OUTLINE AND TEACHING NOTES
a. Retailers must determine and
satisfy consumer needs.
4. Current trends in retailing:
a. OFF-PRICE RETAILERS are
those who buy designer labels
and well-known brands of cloth-
ing at low prices and sell them at
less than typical retail prices.
b. Another development is self-ser-
VIII. SELLING WITH YOUR OWN SALES FORCE
Learning Objective 7.
Describe the creative selling process used in personal sell-
ing.
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CHAPTER OUTLINE AND TEACHING NOTES
A. Advertising alone usually cannot complete
a sale; selling expertise is needed.
REAL WORLD EXAMPLE 9.13
Local sales personnel can provide a competitive advantage
B. Need for Personal Selling
1. In self-service operations, the burden
of selling merchandise is placed on
REAL WORLD EXAMPLE 9.14
A veteran salesman in the men’s shoe department at a
Manhattan Bloomingdale’s store increased his earnings 25%
after switching from a straight hourly scale to compensation
based on commission.
2. Many retailers use straight commis-
sion, rather than salary alone, to pay
and motivate their salespeople.
a. Straight commission is a positive
as far as money-making for the sales
person as well as the company.
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CHAPTER OUTLINE AND TEACHING NOTES
C. Steps in the Creative Selling Process
1. Preparation. Before customer contact
2. PROSPECTING is taking the initia-
tive in seeking out customers with a
new product.
a. Because a firm’s best prospects
3. Making initial contact
a. Whenever possible, serving cus-
tomers should be given top prior–
ity.
b. The initial contact should begin
on a positive note. Sometimes,
Instead of “How may I help you?”
4. Presenting the product
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CHAPTER OUTLINE AND TEACHING NOTES
a. Stress the benefits of the product
to the buyer.
b. Use the “rule of two,” limiting the
consumer’s choices to two items.
REAL WORLD EXAMPLE 9.15
One expert advises “less is more” when presenting the
product and suggests the “billboard test”, making a point to a
set of eyes traveling 60+ mph.
5. Handling objections
a. If the customer presents objec-
6. Closing the sale uses techniques
such as offering a service or giving a
choice.
7. Suggestion selling
a. You should make a definite sug-
8. Sales follow-up
a. Follow-up should be part of every
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CHAPTER OUTLINE AND TEACHING NOTES
everything that was promised
was delivered.
D. Attributes of a Creative Salesperson
1. There is no perfect way to determine
2. Mental attributes
a. Judgment is essential for effec-
3. Physical attributes
a. Personal appearance is im-
LEARNING OBJECTIVES REVISITED
1. Describe the use of advertising to promote the sale of a product.
● Advertising informs customers of the availability, desirability, and uses of a product. Basi-
cally it means keeping your business visible.
2. Discuss some of the opportunities and problems involved in selling to ethnic groups.
● Ethnic groups require special attention in promotion of goods and services, due to language
and cultural differences, such as diet.
Chapter 09 – Promoting and Distributing
3. Describe the opportunities for global operations.
● Opportunities
○ Imports expand markets, use excess resources, and increase profits.
4. Explain how physical distribution affects marketing strategy.
5. Describe different channels of distribution used for marketing products and discuss fac-
tors to consider in choosing an appropriate channel.
● A small business can sell directly to the customer or sell through intermediaries.
6. Describe the functions of intermediaries used in selling a product.
● Brokers, for a fee, bring buyers and sellers of goods together to negotiate purchases or
sales.
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7. Describe the selling process used in personal selling.( Handout 9a provides extra sales
information for students.)
● Preparation
KEY TERMS USED IN THIS CHAPTER
Advertising informs customers of the availability, desirability, and use of a product.
Agents are marketing intermediaries who market a product to others for a fee.
Brokers bring buyers and sellers of goods together to negotiate purchases or sales.
Containerization is a system of standardized steel containers used in Intermodal Shipping, from truck to
rail to ship.
Importing involves purchasing and marketing other nations’ products.
Infomercials (paid programming, teleshopping) are long, usually half-hour, TV ads hosted by a hyper
“sellevangelist,” selling a relatively new product or service.
Institutional advertising is selling an idea about the company.
intermediaries are those units or institutions in the channel of distribution that either take title to or nego-
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Publicity is information about a business that is published without charge.
NOTES FOR DISCUSSION QUESTIONS
1. What basic decisions should be made about an advertising program?
Some such basic decisions to determine the best fit for your small business: (1) how much money
2. Describe some opportunities and problems in catering to ethnic differences.
There are opportunities in providing products to appeal to ethnic tastes. However, people f all cul-
3. Do you believe international marketing is as important as stated? Explain.
Answers will be based on students’ personal opinion. You might point out that we are surrounded
4. (a) What are some reasons for importing? (b) What are some problems?
(a) Goods are imported, because they are sold or used by the firm or preferred by some custom-
ers. Imported goods may be the product that the company sells or the raw material for the goods it pro-
5. List the opportunities available in exporting.
Chapter 09 – Promoting and Distributing
6. Describe some of the risks and problems involved in exporting.
Some of the risks and problems are:
(1) International Banking and difficulty of getting earnings out of many countries
7. Explain the five levels of involvement in exporting.
These levels are:
Level 1 Casual, or accidental, exporting, with the product sold through an intermediary.
8. What factors should be considered in choosing a channel of distribution?
These factors would include:
(1) Geographical markets and consumer types arranged in order of importance.
Chapter 09 – Promoting and Distributing
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9. Describe the traditional channels of distribution for consumer goods.
The four traditional channels of distribution are:
(1) Producer → consumer
10. Describe the three traditional channels of distribution for industrial goods?
The three traditional channels of distribution are:
11. Name two types of independent agents. What are the advantages and disadvantages of using
them?
The two types of agents are brokers and agents. The advantages are that agents are great for a
12. Describe the eight steps in the creative selling process.
The eight steps are:
(1) Preparation. The salesperson should know the firm’s policies, procedures, and rules; how
to operate equipment; and a great deal about the product, including how and when to use it,
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NOTES FOR CASE QUESTIONS
CASE 9.1: Taking Your Store to Your Customers
1. What type of distribution channels does Feeling Special Fashions use?
2. Should Sarah Hammet consider selling through intermediaries, such as retailers? Discuss the ad-
vantages and disadvantages.
3. How would you rate Hammet’s selling strategy? Recommend ways she could increase sales.
Students can be very creative with their ideas on how to increase sales. Some possibilities might
4. Should Feeling Special Fashions advertise? Discuss the advantages and disadvantages.
While advertising would bring sales growth, it can also be very expensive. Additionally, the
5. How do you rate Hammet’s chances for success? Why?
Hammet has probably reached the limit of growth using her existing distribution strategy. Her
CASE 9.2: Clark Copy International Corporation’s China Experience
1. Evaluate the procedure followed by Otto Clark in his effort to enter global operations.
This case beautifully illustrates the inherent risk involved in international trade. The procedure
Chapter 09 – Promoting and Distributing
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2. What went wrong? Explain.
The company courted Chinese business using an intermediary, who understood the people and
3. What—if anything—would you have done differently?
In hindsight, Clark probably put too many resources into the Chinese project. When it failed, the
BONUS EXERCISE
9.1 Other Teaching Ideas
A. Ask students to look around their living quarters and try to determine how the products got there.
(1) Where did the coffee or tea that they use come from?
9.2 Retail Distribution Strategy
The text discusses three categories of retail distribution—intensive distribution, selective
distribution, and exclusive distribution. This exercise asks students to summarize each distribu-
9.3 Discussion Starter: Crisis Management
This exercise explores management reaction to rapid, unexpected change. Divide the class into
groups of 5-6. Each group will act as a management team for a company facing with a crisis. Have the
HANDOUT 9-A
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Retail Distribution Strategy
The text discusses three categories of retail distribution—intensive distribution, selective
INTENSIVE DISTRIBUTION
Summarize the strategy:
Example 1: _____________________________________
SELECTIVE DISTRIBUTION
Summarize the strategy:
Example 1: _____________________________________
EXCLUSIVE DISTRIBUTION
Summarize the strategy:
Example 1: _____________________________________
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9 A Handout
SELLING YOURSELF, YOUR BUSINESS, YOUR PRODUCT
We added this not because, there are no sales tips in the text, but because from the very beginning when
you start with a business idea, you are presenting yourself. You are selling you. You are convincing eve-
ryone you meet all the way through the processes that your dream is viable and your ideas will work. Use
the same principles that you expect your employees to use to sell your product or service. This write up or
advice column as it may be, is compiled from over 40 years of retail and hospitality experience on many
levels. Hopefully, it can provide assistance in areas you might not have thought about.
Appearance is important, but not as strict as in the past. Different is not always bad. Do not fail to inter-
view a person who may be a bit different. He/she may be the outstanding personality and great sales abil-
ity your store needs. However, any interviewee should be crisp, clean and dressed for the occasion.
Age is not important unless it affects ability to do the job. The same for weight, which is only an issue in
small places or fast paces. Many retirees are well capable of starting a new career. There are also many
Military veterans who might be just the one for your company.
Selling tips
1. Make eye contact immediately, acknowledging customer presence.
2. SMILE. The Ritz Carlton Company of five star hotels requires its staff to put on a smile with
their uniforms. Obviously, it works.
Chapter 09 – Promoting and Distributing