3.1 marketing

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Consumer goods are goods used for personal use. Not used by businesses. They're divided into three categories.

1. Convenience goods- low priced items bought on a regular basis like pens, paper, toothbrushes, etc. Not a lot a time spent on these decisions.

2. Shopping goods- Higher priced items costumers will spend more time on, like cars, plane tickets, etc.

3. Speciality goods- unique and often very expensive items that costumers will go to considerable lengths to purchase, like houses.

Channel of distribution- the path a product/service follows from manufacturer/producer to the consumer. Helps move goods to consumers everywhere.

Middleman/intermediary- any person/orginization operating between a producer and consumer. often able to perform marketing functions better than producer/manufacturer.

Retailers- people/orginization selling products/ services for the consumer. An example is 7-eleven.

Wholesalers- any people/organization that sells products/services to retailers/manufacturers, but not consumers.

Agents- middlemen who help goods move through the channel of distribution. They never own the goods, instead getting parties together and helping make the buying-selling transaction.

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There is five channels of distribution. Consumer goods are usually marketed through one of the five channels of distribution.

1. Producer to consumer- shortest channel of distribution, from producer/manufacturer directly to the consumer. Some examples are cosmetics, pizza from the pizza parlor. Almost all service businesses use this channel.

2. Producer to retailer to consumer- used for many kinds of consumer goods with a relatively high unit value, like clothing, automobiles, etc. often used when retailers can buy goods in large quantities. Retailers are one of the most important middlemen in the distribution channel, and they sell the most products.

3. Producer to wholesaler to Retailer to consumer- most traditional and most common used channel. It takes longer but is most common for homogeneous or convenience goods that require wide distribution. Usually have a low unit value.

4. Producer to agent to retailer to consumer- Some producers sell products through agents who help them reach large retailers, like national and regional supermarket chains. Sometimes agents work for retailers.

5. Producer to agent to wholesaler to retailer to consumer- longest channel of distribution. products that need to be distributed in a wide area and are carried by small retailers are marketed through this channel.

Using channels of distribution helps keep prices down. Middlemen make it a lot easier to communicate between producers and consumers.

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Intensive distribution- when a product is distributed through as many outlets as possibles. includes things like bread, gum, and other convenience goods.

Selective distribution- when a product is distributed through a few outlets in a given area. That area must meet producers needs. Most common method for distributing shopping goods. Involves a close working relationship between manufacturer and retailer.

Exclusive distribution- when only one outlets have exclusive rights for a product in a given area. Common for specialty good. Has some risks involved. Must make sure that it's not forming an illegal monopoly. Some examples are expensive jewelry, and china.