Chapter 1: Marketing channels:

Structure and Function (Cont.)

MKT450
 Manufacturer- Based Channel Formats
 Manufacturer Direct
• Product shipped and serviced from manufacturer’s warehouse.
 Manufacturer- Owned Full Service Wholesaler Distribution
• An acquired wholesale distribution company serving the parents and other
manufacturers.
 Company store manufacturer outlet
• Retail product outlets in high density markets.
 License
• Contracting distribution and marketing functions through licensing
agreements.
 Consignment locker stock
• Manufacturer ships product to point of consumption but title does not pass
until consumed.
 Broker
• Specialized sales force.
 Retailer Based Formats
 Franchise
• KFC, McDonald’s
 Dealer direct
• Auto dealers
 Buying club
• Buying services requiring memberships. (Book Club)
 Warehouse club- Wholesale Club
• Costco, Price club
 Retailer Based Formats (Cont.)
 Mail order catalog
• Non store selling through use of literature sent to potential
customers.
 Food retailer
• Will buy canned and boxed goods in truckloads to take
advantage of pricing and manufacturing rebates.
 Department store
• Offers wide variety of merchandise with a moderate depth of
selection.
 Mass Merchandiser
• Similar to department stores, except product selection is
broader and prices are low. (Wal-mart, Tesco)
 Retailer Based Formats (Cont.)
 Specialty stores
• Offers merchandise in one line
 Specialty discounter- Category killer
• Offers merchandise in one line
• Buy truckloads
• Ranges in size in between 50,000-75,000 sq ft
• Offers discount
• Manufacturer directly ships products to store
 Convenience store
 Hyper Market