Question

Compare direct marketing channels and indirect marketing channels. Provide some examples where a company might want to go direct, and other examples where indirect channels might be more appropriate. Name the various types of resellers in marketing channels. Describe the three strategies that a firm can use to determine the number of market intermediaries and discuss the strengths and weaknesses of each strategy

Answer 1

Direct marketing channels have no intermediary levels; the company sells directly to consumers.Indirect marketing channels contain one or more resellers, such as wholesalers and retailers inconsumer markets and manufacturer’s representatives or business distributors in business marketingchannels

a. Intensive distribution is stocking the product in as many outlets as possible. These products must be available where and when consumers want them. For example, toothpaste, candy, and other similar items are

sold in millions to outlets to provide maximum brand exposure and consumer convenience. Krat, Coca-Cola, Kimberly-Clark, and other consumer-goods companies distribute their products this way. b. Exclusive distribution is giving a limited number of dealers the exclusive right to distribute the company's products in their territories. Exclusive distribution is often found in the distribution of luxury brands. For example, exclusive Bentley automobiles are typically sold by only a handful of authorized dealers in any given market area. By granting exclusive distribution, Bentley gains stronger dealer selling support and more control over dealer prices, promotion, and services. Exclusive distribution also enhances the brand's image and allows for higher markups.

Selective distribution is the use of more than one but fewer than all the intermediaries wha are willing to carry the company's products. Most television, furniture, and home appliance brands are distributed in this manner. For example, Whirlpool and GE sell their major appliances through dealer networks and selected large retailers. By using selective distribution, they can develop good working relationships with selected channel members and expect a better-than-average selling effort. Selective distribution gives producers good market coverage with more control and less cost than does intensive distribution.