PLACE

(DISTRIBUTION Chapter 9:

STRATEGIES)
MARKETING
INTERMEDIARIES/
MIDDLEMEN
Marketing institutions in the distribution channel, business firms that
operate between producers and consumers.
WITH INTERMEDIARIES

M1 C1

M2 Intermediaries
C2

M3 C3
WITHOUT INTERMEDIARIES

M1 C1

M2 C2

M3 C3
 FUNCTIONS OF
INTERMEDIARIES
• Economies in distribution of goods

• Transform assortment of goods from producers to assortments needed

by consumers

• Gather and distribute marketing research and intelligence information

• Promote goods and services

• Build up contact with prospective buyers

• Physically store and distribute goods

• Help to match demand and supply through breaking bulk

• Provide financing to consumers and suppliers.

 TYPES OF WHOLESALERS

a) Merchant Wholesaler

b) Brokers and Agents

c) Manufacturers Sales Branches and Offices

MERCHANT WHOLESALER
Independently owned business
Provide a full range of services and functions
Others provide limited services only.

BROKERS AND AGENTS

Typically bring buyers and sellers together
Represent either buyer or seller
Agents more permanent compared to broker
MANUFACTURER’S SALES BRANCHES/ OFFICES
Chose to distribute their goods directly through company owned
facilities
Operate a sales branch or a sales office
 TYPES OF RETAILER
Specialty stores

Department stores

Supermarkets

Hypermarkets

Convenience stores
WHAT IS RETAILING?

Retailing includes all the activities involved in selling products or

services directly to final consumers for their personal, non-business
use.
TYPES OF RETAILERS
Retailers are classified based on:

Amount of Service They Offer

Breadth & Depth of Product Lines

Relative Prices Charged

How They Are Organized

 WHOLESALING
Wholesaling includes all activities involved in selling
goods and services to those buying for resale or
business use.
FUNCTIONS PROVIDED BY
WHOLESALERS
Selling & Promoting
Management
Services & Advice Buying &
Assortment Building
Market
Information

Bulk-Breaking
Risk Bearing

Warehousing
Financing

Transportation
CHANNEL STRATEGY
 Manufacturers also need to consider the market coverage strategies
in distributing their products.

1. Intensive distribution
2. Selective distribution
3. Exclusive distribution
SELECTION OF DISTRIBUTION
CHANNELS
 Final choice of distribution channel depends on the following factors:

1. The size, needs and geographical location of the firm’s market affects the
channel choice.

2. Product factors – characteristics of the product

3. Producer Factors – depends on the availability of resources and desire for

control on the part of the manufacturer.

4. Middlemen factors – availability and willingness of distributors must be

carefully considered too.
 THE NATURE OF
PHYSICAL
Management of the physical flowDISTRIBUTION
efficient manner.
of products in the most effective and

Main components or elements of physical distribution include:

Order Processing
Material handling
Warehousing
Inventory management
Transportation
CHANNEL LEVEL
 CUSTOMER MARKETING
CHANNEL

C1 M Consumer

C2 M Retailer Consumer

C3 M Wholesaler Retailer Consumer

C4 M Wholesaler Jobber Retailer Consumer

 INDUSTRIAL MARKETING
CHANNEL

C1 Business Business Consumer

C2 Business Business Distributors Business

Customers

C3 Business Sales Branch Business Consumer

C4 Business Sales Branch Business Distributor Business Consumer

NEW FORMS OF
MARKETING
 Vertical Marketing System (VMS)
1. Corporate VMs
2. Administered VMS
3. Contractual VMS