Chapter 8 - Kimchi's Journey
Chapter 8 - Kimchi's Journey B216
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This 0 page Class Notes was uploaded by KUMIKO Notetaker on Thursday November 5, 2015. The Class Notes belongs to B216 at Republic Polytechnic taught by Gerrard Ong in Summer 2015. Since its upload, it has received 124 views. For similar materials see Marketing in Social Science at Republic Polytechnic.
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Date Created: 11/05/15
ghapter 8 Kimchi39s ourney Functions of Intermediaries 115 turning Ti39 it39 13f Gathering Ea lii39t rihauting inf rmalti em within the rune inforimmimm ca rrymg ut Devellmin channel weal Rm Taking Emmtim rm In ationg 739 abut offer tingling E 1 Acquiring U F Funmma m 6 crmr umitating FlAmi it39ll QWEquot iFi i39lMi E lnmEmlgdligiri39g ig E with pursueHive must of channel i huw writ i Tn s ffil g and Shaping snaffle r5 t tintwry ee l EstElktii l packaging etc FMLE a39l im39ibuticin Witching Hammerquot storing of gt d 51 Rattlermg ttfr EH11 Cir pyrite mil mtht r terms 5E that W lEf Ei i l can he tram elrre Channel Intermediaries 1 Wholesalers They break down 39bulk39 into smaller packages for resale by a retailer They buy from producers and resell to retailers They take ownership or 39title39 to goods whereas agents do not see below They provide storage facilities For example cheese manufacturers seldom wait for their product to mature They sell on to a wholesaler that will store it and eventually resell to a retailer Wholesalers often reduce the physical contact cost between the producer and consumer eg customer service costs or sales force costs Example a wholesaler can buy in bulk tea leaves from the tea plantations then break the tea leaves into smaller cartons to sell to tea distributors 2 Distributors Wholesalers who carry only noncompeting goods or lines are called distributors Distributor also break bulk but along with that they offer value added service to the product such like break bulk delivery credit terms and maintenance contract Usually wholesalers pass the product to distributors who add on valueadded services before passing them to retailers Example distributor could further break up the tea leave cartons into smaller cartons and then sell to retailers like Giant Cold Storage or to restaurants or cafes 3 Agents Agents are mainly used in international markets Selling agent has contractual authority to sell a manufacturer s output An agent will typically secure an order for a producer and will take a commission They do not tend to take title to the goods This means that capital is not tied up in goods However a 39stockist agent39 will hold consignment stock ie will store the stock but the title will remain with the producer This approach is used where goods need to get into a market soon after the order is placed eg foodstuffs Agents can be very expensive to train They are dif cult to keep control of due to the physical distances involved They are dif cult to motivate Example a tea plantation in Cameron Highlands looks for their local agent who has international contacts to try to look for wholesalers or distributors in other countries 4 Retailers EDD Retailers will have a much stronger personal relationship with the consumer The retailer will hold several other brands and products A consumer will expect to be exposed to many products Retailers will often offer credit to the customer eg electrical wholesalers or travel agents Products and services are promoted and merchandised by the retailer The retailer will give the nal selling price to the product Retailers often have a strong 39brand39 themselves eg WallMart in USA and Giant in Singapore 5 Internet Intermediaries Websites This is a new entity not usually found in traditional channels The Internet has a geographically disperse market Internet may be used as a direct channel of distribution own website but also indirect using intermediaries such as niche websites like Amazoncom etc The main bene t of the Internet is that niche products reach a wider audience There are low barriers to entry as set up costs are low Use ecommerce technology for payment shopping software etc There is a paradigm shift in commerce and consumption which bene ts distribution via the Internet Channel Design Decision Strep Iz nalf ing Cru t xmer Heady Antwanbani e liv ry Leeatl n Lave Inf airmen SEEP Setting Eh nn fll hjEEEiHEh Segrnwntnja wellBean Tangled lliB39aI39EI m7 aeuetaamer EmIEe i Tipes r Intermi ie ri fi i lb ti itwithn Int iw the H r itEW ma39 iiiFEE micWham Ibmathfdtprth quot IIlelali39n39wzrr393pr Leca39tinn Nearby Eh p ydiiliE39Erf EbEJ Level rf tiltWEE lingI39m sale H tg htlp ght111nm Ht Exam le Mink Ph nes39 State marketing thannell nbje ives in terms atquot Member at segments in signe 7 7 Which gment w mm 9 Targeted level Elf ErnieIi i Euarn lieu Mdbile P hnnes Step 3 Identifying Major Alternatives o Types of Intermediaries Frequentllg Ehf 531nm 39Eriseil39 bli mr t and grade gaeds In large hats break Julii I nth annual radinrlibuti lln Ernllle r lat nIl l EEEHMES H39I39 ll l 39lf Willi 39lllili ll l Sin IIIj h39 iuli lili 39 rthrs rem retailer and is net lim illi39Ed in prematan the 39 l pr dut r39sa pr dutl D 13 husiruese I39 39i EE Lsal39ee came primanlvllil lmrn Jellln g gnuEli 11F ti 39 imml 7 in nal tantrum fur their persena L I l l uii IEi a LBSE 39 A ueradar whu i5 aujilmrizm it an bllhilf nil in lhlf ta create a legal relatinnshif with a Thlu d Fail marti than 39Emm breaking bulky ailmentrs value added ignite tn thrE pmdutt such a break bmlfk leimam i ii 7 nquot mam 39 nt tndit39mlms an ill acts as a Hales Mniii t il madman m attiuielai r m itquot 139 urnHurt Types of Distribution Direct Distribu um Indireet lDiiet ilhti ian Hybrid Distributing 39 Flreeluter at it well ale thrgugh intermediaries Merely far 1 llaualneaa i pleat and high linvel reme39nt preellu a Egg Laeik Ellaeventitm Machine er High End Case stamer generals mega Vertuii 7 39 Fer fart rn raving L Fur grand a FMEEG wl39i e r39r he 1reitlle dittr ilbu titan is quot 39 quotdl tn elelliirer quottil laminate t e direcL iMiaar39lril er ebjet rr 4 l 39E E EiethrtttTa nathimaya Treatment e in lNTUE Initl i rett ere Distribution Intensity Number of Marketing Intermediaries Dieiiitititiein iniieneiiy eeeliee enir when inierrnetliei39iee ere meltreel rquot V a if t t r in F r r quotit Title atrrattegglr realms Heana that ENE i Selettire diEtll39ibLlilil lni a Iil EiEluEt erailehle retailer l it tmentgar n at all iSilJllE Serving a gieein area which quotwere L a retail etitlete in e i5 granted aele right net alll F g gll i 13quot 39 Lquot E I girth area at EELl i39fr39 a predutt a gireri area will i Typically need I er a Tarpiitelr Lieetl er ill l39lb u i WE rte neeiaienee speeall39ty uatuir Fil d39iJTi E gtlla an feet gentle er busineee 1 quotlinenitelIjir teed iier neutering tenetinaer Iaredsutta ieg eheipipfnig gnuaide geetla eat IFietiee F eugeet ten eta Eameung LCE39 E i tlil i uelmib ltlit i39 Eaterpill ar hear W iitlaai HP ahampei e millt eta met l iinerri Lamps Fm i linteneire lEegeliweieE iDietri htitien iatrrilhititinn atrihutien Responsibilities of Channel Mebers Step 4 Evaluating Channel Alternatives ECA Criteria lEteniamit Central awtire Criteria Criteria Criteria Centpmree ilailiqr39 L 11 i1 tar E antlert te emirenrmental hanges Edaimparts alailit39ir in item Camp res the likely l l evf dLiH erent channel a Iterriatiree Era Hate llerel Ell E i lu li i39 I39E iEll ellla ijeg withdrawing f rtiirn retail eutletai Criteria Description Description Economic Compares the likely sales costs and pro tability of different channel alternatives Evaluate level of channel investment needed channel ef ciency in reaching customers logistic ef ciency etc Control Ability to control marketing activities service levels and access end consumers Using intermediaries usually means giving them some control over marketing of the product and some intermediaries take more control than others Evaluate level of control over marketing activities control over service levels access to end consumers etc Adaptive Ability to keep channel exible so that it can adapt to environmental changes Channel often involve long term commitments and cannot be changed easily Evaluate cost incurred when making changes to channel Practice Questions 1 Which of the following statements best describe a wholesaler a They create goods or services b They offer value added service like small quantity delivery offer credit terms and maintenance contract to small size retailer c They physically assemble sort and grade goods in large lots break bulk repack and redistribute in smaller lots d None of the options 2 Adidas decided to distribute its products via big departmental stores sports shops as well as its own specialty stores This distribution approach is called a Direct b Exclusive c lndirect d Hybrid 2 If Uniqlo decides to sell through department stores like Metro Tangs and lsetan which criteria most likely prompted them to do so 3 Fill in the table Description lntermediar y a A person who is authorised to act on behalf of another called the Principal to create a legal relationship with a Third Party a A business whose sales come primarily from selling goods or services directly to nal consumers for their personal nonbusiness use a They reach global audiences are relatively cheap to set up and commonly use online platforms to carry out transactions a They frequently physically assemble sort and grade goods in large lots break bulk repack and redistribute in smaller lots It assumes no other role than simply ful lling orders from retailers and is not involved in promoting the producer s product a This is a party that apart from breaking bulk also offers value added service to the product such as break bulk delivery inventory management credit terms and maintenance contract It acts as a sales representative for the producer in actively promoting its product 1 Mr Bean a soya bean milk supplier has its own manufacturing plant and runs over 50 takeaway counters in Singapore a Identify the type of distribution channel Mr Bean has used for reaching out to ordinary consume Direct or Indirect b Fill in the table Criteria Direct Indirect Distribution Distribution Economi Advantages Advantages C Disadvantages Disadvantages Control Advantages Advantages Disadvantages Disadvantages Adaptive Advantages Advantages 1 Disadvantages Disadvantages a Based on your answer in part b why do you think Mr Bean opted for opening its own takeaway counter instead of selling through other intermediaries such as food courts cafes etc Hybrid is the use of direct and indirect distribution channel Give an example of a brand using this type of distribution What is the advantage of using this type of distribution Suggest reasons why a company based in the United States would choose to use indirect distribution when entering the China market Learning Outcomes 1 De ne the roles of various channel intermediaries and explain the marketing functions performed by intermediaries physical distribution communication and transaction facilitating functions Analyse the major channels of distribution used by marketers of consumer and organisational products direct indirect hybrid Explain how companies decide the extent of distribution intensive selective exclusive Identify the factors in planning a distribution channel Need answers Feel free to drop me an email 15043445 myrpedusg