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1. Direct and Indirect Channels

Direct channels

- A situation in which producer sells a product directly to a consumer without the help of intermediaries. For example, online sales.

Indirect channels

- A chain of intermediaries through which a product moves in order to be made available for purchase by a consumer.

2. Channel Behavior

• A marketing channel consists of firms that have partnered for their common food, with each member playing a specialized role. • Channel conflict refers to disagreement over goals, roles, and rewards by channel members. – Horizontal conflict is conflict among members at the same channel level. – Vertical conflict is conflict between different levels of the same channel.

3. Vertical and horizontal marketing system
The vertical marketing system (VMS) comprises of mainly three components. Producer, wholesaler and retailer are the three major components included in this kind of marketing system. The producer can be considered as the manufacturer who is involved in the making of the product. The wholesaler usually purchases the products from these producers and then they manage the distribution to the retailers. The retailers are the people who mark up the price of the products depending on wholesaler and also can sell the products to the final users or the customers. For example, Sherwin-Williams is a paint producer, however, they not only produce the pain, the company also has several thousand retail stores that sell their product. A horizontal marketing system is a distribution channel arrangement whereby two or more organizations at the same level join together for marketing purposes to capitalize on a new opportunity. For example, a soft drink company may combine with a chip producer and the two products are marketed and distributed together.

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Analysing consumers needs

- finding out what target consumers want from the channel

Setting channel objectives

- Finding out which channel is more profitable

Identifying major channel alternatives

- Intensive

-Selective

-Exclusive

Evaluation

-Receiving feedback from customers

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1. Segment - Retailers must segment their market

2. Targeting - Retailers must identify their target market(s)

3. Positioning

a) Product Assortment - Merchandising, which products for which target market

b) Service Mix

Using store atmosphere (internal and external)

- Promotion - Advertising

- Product - Which brand, how many pieces to buy

- Price - Cost plus, break even, target return or value based

- Place - Operating hours, convenient location, cleanliness