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CHAPTER TWELVE
Distributing and Promoting Products and Services
CHAPTER SUMMARY
This chapter explores how organizations use a distribution system to enhance the value
of a product and examines the methods they use to move products to locations where
consumers wish to buy them.
Distribution is efficiently managing the acquisition of raw materials by the factory and
the movement of products from the producer or manufacturer to business-to-business
(B2B) users and consumers. On their way from producers to end users and consumers,
products pass through a series of marketing entities known as a distribution channel. A
distribution channel is made up of marketing intermediaries, or organizations that assist
in moving goods and services from producers to end users and consumers.
Wholesalers are channel members that buy finished products from manufacturers and
sell them to retailers. Retailers in turn sell the products to consumers.
Companies use promotion to inform, persuade, or remind consumers and B2B users to
influence their opinion or elicit a response. The combination of traditional advertising,
personal selling, sales promotion, public relations, social media, and e-commerce used
to promote a product is called the promotional mix. Each firm creates a unique
promotional mix for each product.
Many companies have adopted the concept of integrated marketing communications
(IMC) in their approach to promotion. IMC involves carefully coordinating all
promotional activities—traditional advertising (including direct marketing), sales
promotion, personal selling, public relations, social media and ecommerce, packaging,
and other forms of promotion—to produce a consistent, unified message that is
customer focused.
Traditional advertising is any paid form of nonpersonal presentation by an identified
sponsor. Technology and the Internet continue to have a huge impact on traditional
advertising. The channels through which advertising is carried to prospective customers
are the advertising media. Each company must decide which media are best for its
products.
, Advertising acquaints potential customers with a product and thereby makes personal
selling easier. Personal selling is a face-to-face sales presentation to a prospective
customer. Sales promotion helps make personal selling and advertising more effective.
Sales promotions are marketing events or sales efforts—not including traditional
advertising, personal selling, and public relations—that stimulate buying. Like sales
promotion, public relations can be a vital part of the promotional mix. Public relations is
any communication or activity designed to win goodwill or prestige for a company or
person.
Social media is a hugely powerful tool for marketers. Trends in social media include
promotion through blogs and the use of podcasts and videos as a promotion channel. E-
commerce is related to social media and other new online platforms because it utilizes
the internet for marketing communication.
LEARNING OUTCOMES
1. What is the nature and function of distribution (place)?
Distribution (place) includes the efficient managing of the acquisition of raw
materials by the factory and the movement of products from the producer or
manufacturer to business-to-business users and consumers. Place includes such
activities as location selection, store layout, atmosphere and image-building for
the location, inventory, transportation, and logistics. Logistics activities are
usually the responsibility of the marketing department and are part of the large
series of activities included in the supply chain.
Distribution channels are the series of marketing entities through which goods
and services pass on their way from producers to end users. Distribution systems
focus on the physical transfer of goods and services and on their legal ownership
at each stage of the distribution process. Channels reduce the number of
transactions and ease the flow of goods.
2. What is wholesaling, and what are the types of wholesalers?
Wholesalers typically sell finished products to retailers and to other institutions,
such as manufacturers, schools, and hospitals. The two main types of
wholesalers are merchant wholesalers and agents and brokers. Merchant
wholesalers buy from manufacturers and sell to other businesses. Agents and
brokers are essentially independents who provide buying and selling services.
They receive commissions according to their sales and don’t take title
(ownership) of the merchandise.
September 5, 2018 2
must be attributed to OpenStax
CHAPTER TWELVE
Distributing and Promoting Products and Services
CHAPTER SUMMARY
This chapter explores how organizations use a distribution system to enhance the value
of a product and examines the methods they use to move products to locations where
consumers wish to buy them.
Distribution is efficiently managing the acquisition of raw materials by the factory and
the movement of products from the producer or manufacturer to business-to-business
(B2B) users and consumers. On their way from producers to end users and consumers,
products pass through a series of marketing entities known as a distribution channel. A
distribution channel is made up of marketing intermediaries, or organizations that assist
in moving goods and services from producers to end users and consumers.
Wholesalers are channel members that buy finished products from manufacturers and
sell them to retailers. Retailers in turn sell the products to consumers.
Companies use promotion to inform, persuade, or remind consumers and B2B users to
influence their opinion or elicit a response. The combination of traditional advertising,
personal selling, sales promotion, public relations, social media, and e-commerce used
to promote a product is called the promotional mix. Each firm creates a unique
promotional mix for each product.
Many companies have adopted the concept of integrated marketing communications
(IMC) in their approach to promotion. IMC involves carefully coordinating all
promotional activities—traditional advertising (including direct marketing), sales
promotion, personal selling, public relations, social media and ecommerce, packaging,
and other forms of promotion—to produce a consistent, unified message that is
customer focused.
Traditional advertising is any paid form of nonpersonal presentation by an identified
sponsor. Technology and the Internet continue to have a huge impact on traditional
advertising. The channels through which advertising is carried to prospective customers
are the advertising media. Each company must decide which media are best for its
products.
, Advertising acquaints potential customers with a product and thereby makes personal
selling easier. Personal selling is a face-to-face sales presentation to a prospective
customer. Sales promotion helps make personal selling and advertising more effective.
Sales promotions are marketing events or sales efforts—not including traditional
advertising, personal selling, and public relations—that stimulate buying. Like sales
promotion, public relations can be a vital part of the promotional mix. Public relations is
any communication or activity designed to win goodwill or prestige for a company or
person.
Social media is a hugely powerful tool for marketers. Trends in social media include
promotion through blogs and the use of podcasts and videos as a promotion channel. E-
commerce is related to social media and other new online platforms because it utilizes
the internet for marketing communication.
LEARNING OUTCOMES
1. What is the nature and function of distribution (place)?
Distribution (place) includes the efficient managing of the acquisition of raw
materials by the factory and the movement of products from the producer or
manufacturer to business-to-business users and consumers. Place includes such
activities as location selection, store layout, atmosphere and image-building for
the location, inventory, transportation, and logistics. Logistics activities are
usually the responsibility of the marketing department and are part of the large
series of activities included in the supply chain.
Distribution channels are the series of marketing entities through which goods
and services pass on their way from producers to end users. Distribution systems
focus on the physical transfer of goods and services and on their legal ownership
at each stage of the distribution process. Channels reduce the number of
transactions and ease the flow of goods.
2. What is wholesaling, and what are the types of wholesalers?
Wholesalers typically sell finished products to retailers and to other institutions,
such as manufacturers, schools, and hospitals. The two main types of
wholesalers are merchant wholesalers and agents and brokers. Merchant
wholesalers buy from manufacturers and sell to other businesses. Agents and
brokers are essentially independents who provide buying and selling services.
They receive commissions according to their sales and don’t take title
(ownership) of the merchandise.
September 5, 2018 2
