Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Place and Development
of Channel Systems
Text © The McGraw−Hill
Companies, 2002316 Chapter 11
Sometimes large wholesalers or retailers do take the lead. These middlemen ana-
lyze the types of products their customers want and then seek out producers who
can provide these products at reasonable prices. With the growth of powerful retail
chains, like Target and Toys “R” Us, this is becoming more common in the United
States. It is already typical in many foreign markets. In Japan, for example, very
large wholesalers (trading companies) are often the channel captains.
Channel captains who are middlemen often develop their own dealer brands.
Large retailers like Sears or Kmart and wholesalers like Ace Hardware in effect act
like producers. They specify the whole marketing mix for a product and merely del-
egate production to a factory. Exhibit 11-2B shows how marketing strategy might
be handled in this sort of retailer-led channel system.Exhibit 11-2 How Channel Functions May Be Shifted and Shared in Different Channel Systems
ProductCustomersPrice P romotionPlace ProductCustomersPrice PromotionPlaceProducer’s part
of the jobMiddleman’s part
of the jobA. How strategy decisions are handled in a
producer-led channel
Producer’s part
of the jobMiddleman’s part
of the jobB. How strategy decisions are handled in
a retailer-led channelThe growing number of retailer-
led channel systems is prompting
growth of private label dealer
brands in a wide variety of
product categories.
Some middlemen are
channel captains