2. Answer the following questions in written form. Put your answers in your own words.
1. In a sentence (or two), what are marketing channels and why are they essential?
____________________________________________________________________________________________________________________________________________________________________________________
2. What is an “vertically integrated” marketing channel?
____________________________________________________________________________________________________________________________________________________________________________________
3. What are some of the functions wholesalers perform?
____________________________________________________________________________________________________________________________________________________________________________________
4. What are some of the functions retailers perform?
____________________________________________________________________________________________________________________________________________________________________________________
5. Describe two or three factors that you think are especially important in retail planning.
____________________________________________________________________________________________________________________________________________________________________________________
VI. Supplementary Tasks
1. Using the chart below make up a dialogue with your partner; who is going to extend his business. The following phrases may come handy.
2. Speak about advantages and disadvantages of different forms of distribution channels.
W Would you like to comment here? What are your views on? |
Asking for opinions |
I’m convinced that … I feel quite sure that … It’s perfectly clear to me that … From financial point of view … I’m inclined to think that … I tend to favour the view that … |
Giving opinions |
I I couldn’t agree more. Precisely. Exactly! |
Agreement |
I disagree completely. On the contrary. That’s not how I see it. I would not say that. |
Disagreement |
I I see your point but … I suppose you are right but … |
Expressing reservations and doubts |
I I would suggest that we … |
Neutral suggestions |
I t might be a good idea to … Have you thought of ___ing … What about ___ ing … We could always … |
Tentative suggestions |
hat
do you think … ?
’m
in complete agreement.
agree up to a point but …
recommend that we should.
Forms of Distribution Channels
Source Intermediaries or “Middlemen” |
|
Advantages |
|
Disadvantages |
Distributors Buy and resell goods. Accept orders and payment. Assume warranty responsibility. May offer customer training. |
|
Handle cultural, commercial, and technical problems. If delivery in United States, payment in dollars, standard terms. Simple handling of product defects. |
|
Among the most costly sources; buyer pays both manufacturer’s and distributor’s profit and overhead. Probably foreign currency, L/C terms. (Letter of credit)
|
Manufacturer’s Representatives Accept orders on behalf of a source; receive commission for the service. May provide technical and commercial support. |
|
Handle cultural, commercial, and technical problems. Generally less expensive to use than a distributor. |
|
Payment in foreign currency. L/C terms if a foreign rep. company. Bears no warranty liability; little use in dealing with defects.
|
Brokers Bring together parties to a transaction for a fee. Services vary widely. |
|
Least expensive intermediary. Wide range of services possible. May have wide contacts in the industry. Most willing to negotiate. |
|
Least responsible for source or product performance, warranty. Probably little technical support. Foreign currency, L/C terms probable.
|
Trading Companies Broad scope of activities from brokering, representation, distribution, program management. |
|
Worldwide contacts, broadest scope of sources. Experience and capability. Few cultural or language problems. |
|
Generally a costly alternative. Most prefer to trade in existing markets or to make a market for new product, not to deal in isolated inquiries. Because of their scale, most buyers have little leverage. |
SUPPLEMENTARY UNIT