Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

11. Place and Development
    of Channel Systems

Text © The McGraw−Hill

Companies, 2002

Place and Development of Channel Systems 305

All marketing managers want to be sure that their goods and services are avail-

able in the right quantities and locations—when customers want them. But

customers may have different needs with respect to time, place, and possession util-

ity as they make different purchases.

You’ve already seen this with the product classes—which summarize consumers’

urgency to have needs satisfied and willingness to seek information, shop, and com-

pare. Now you should be able to use the product classes to handle Place decisions.

Place objectives

Type of

channel

Customer

service

level desired

Direct Indirect

Inventory level

Transportation

arrangements

Facilities needed

Information technology

needed

Degree of market

exposure desired

(intensive, selective,

or exclusive)

Middlemen/facilitators

needed (many types,

Chapters 12—13)

How to manage

channel relationships

Exhibit 11-1

Strategy Decision Areas in

Place

Place Decisions Are Guided by “Ideal” Place Objectives

Product classes

suggest Place

objectives

but the numbers are increasing, prompting firms to rethink the ways that they can

provide greater value to their target markets.

In the next three chapters, we’ll deal with the many important strategy decisions

that a marketing manager must make concerning Place. Exhibit 11-1 gives an

overview. We’ll start in this chapter with a discussion of the type of channel that’s

needed to meet customers’ needs. We’ll show why specialists are often involved and

how they come together to form a channel of distribution—any series of firms or

individuals who participate in the flow of products from producer to final user or

consumer. We’ll also consider how to manage relations among channel members to

reduce conflict and improve cooperation.

In Chapter 12, we’ll expand our coverage of Place to include decisions that a

marketing manager makes to decide what level of distribution service to offer—and

why he must coordinate storing and transporting activities—providing the desired

service at a reasonable cost. Then, in Chapter 13, we’ll take a closer look at the

many different types of retailing and wholesaling firms. We’ll consider their role in

channels as well as the strategy decisions they make to satisfy their own customers.