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CHANNEL STRUCTURE AND MEMBERSHIP

CHANNEL STRUCTURE AND MEMBERSHIP. Whether to use intermediaries Some potential channel structures Types of intermediaries to be used Parallel (dual) distribution decisions Evaluating channel performance. High demand for assortment and variety Low volume purchases by individuals

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CHANNEL STRUCTURE AND MEMBERSHIP

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  1. CHANNEL STRUCTURE AND MEMBERSHIP • Whether to use intermediaries • Some potential channel structures • Types of intermediaries to be used • Parallel (dual) distribution decisions • Evaluating channel performance

  2. High demand for assortment and variety Low volume purchases by individuals Others can more efficiently run logistics When To Use Intermediaries

  3. Potential Channel Structures (U.S.) Producer Producer Producer Producer Agents/ Brokers Wholesalers Wholesalers Retailers Retailers Retailers Consumer Consumer Consumer Consumer

  4. Cost effective relative to service provided Compatible with product image Mutual benefit compensation “piggy-backing” or reciprocal “piggy-backing” Types of Intermediaries That Should be Used--Criteria

  5. Parallel Distribution Structures MANUFAC- TURER DISTRI- BUTOR RETAILER MAJOR CHAIN (e.g., Wal-Mart) DIRECT MARKETING FACTORY OUTLET

  6. Service output fulfillment Assignment of channel flows to lowest cost performer (subject to quality standards) Timeliness and quality of members Compliance with equity principle Evaluating Channels

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