Ch. 13 - Marketing Channels And Supply Chains

Front 1

Marketing Channel

Back 1

Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. Make possible a flow of goods from a producer, through intermediaries, to a buyer.

Front 2

Transactional Functions of Intermediaries

Back 2

Buying - Purchasing products for resale
Selling - Contacting potential customers, promoting products, and seeking orders
Risk Taking - Assuming business risks in the ownership of inventory that can become obsolete or deteriorate.

Hint 2

Buying, Selling, Business Risks

Front 3

Logistical Functions of Intermediaries

Back 3

Assorting - Creating product assortments
Storing - Assembling and portecting products
Sorting - Purchasing in large amounts and breaking into smaller amounts
Transporting - Moving a product to customers

Hint 3

4 Types

Front 4

Facilitating Functions of Intermediaries

Back 4

Financing - Extending credit to customers
Grading - Inspecting, testing, and grading products quality
Mktg Info & Research - Providing info to customers and suppliers, including competitive conditions and trends.

Hint 4

3 Types

Front 5

Dual distribution

Back 5

Arrangement whereby a firm reaches buyers by using two or more different types of channels for the same basic product. ie GE sells large appliances directly to home builders but also uses retail stores to sell to customers.

Hint 5

GE

Front 6

Vertical marketing systems

Back 6

Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.

Front 7

Corporate Vertical Marketing systems & Forward and Backward Integration

Back 7

Combination of successive stages of production and distribution under a single ownership.
Forward Integration - Owning the intermediary at the next level down (RL makes clothing but owns stores)
Backward Integration - Owning interm. level above. (Retailer owning manuf.)

Front 8

Contractual Vertical Marketing systems

Back 8

Independent production and distribution firms combine their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone.

Front 9

Franchising

Back 9

Contractual arrangement in which a parent company (franchiser)allows an individual or firm (franchise) to operate a certain type of business under an established name and according to specific rules.

Front 10

Administered Vertical Marketing systems

Back 10

Achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership. ie. Walmart obtains coop. from manufactures b/c of its position as world's largest retailer.

Front 11

Factors in Choosing a Marketing Channel

Back 11

1. Which channel and intermediaries will provide the best coverage of the target market?
2. Which channel and intermediaries will best satisfy the buying requirements of the target market?
3. Which channel and intermediaries will be the most profitable?

Hint 11

3 Questions

Front 12

-Target Market Coverage-
Intensive distribution

Back 12

a firm tries to place its products and services in as many outlets as possible.

Front 13

-TMC-
Exclusive distribution

Back 13

Only one retail outlet in a specified geographical area carries the firm's products.

Front 14

-TMC-
Selective distribution

Back 14

a firm selects a few retail outlets in a specific geographical area to carry its products.

Front 15

-Satisfying Buyer Requirements-
4 Categories

Back 15

1. Information
2. Convenience
3. Variety
4. Pre- or Postsale services

Front 16

Profitability

Back 16

Sum of (Rev. - Costs) for each channel.

Front 17

Channel Conflict & 2 Types

Back 17

Arises when one channel member believes another channel memeber is engaged in behavior that prevents it from achieving its goals.
Vertical - conflict between different levels in a channel
Horizontal - conflict between intermediaries at the same level in channel (Kmart & Target)

Front 18

Disintermediation

Back 18

Channel conflict that arises when a channel member bypasses another member and sells or buys products directly.

Hint 18

Vertical Conflict

Front 19

Logistics

Back 19

Activities thaty focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. Performance of these activities is LOGISTICS MANAGEMENT.

Front 20

Supply Chain

Back 20

Sequence of firms that perform activities required to create and deliver a product to consumers or industrial users.

Front 21

Total Logistics Cost

Back 21

Expenses associated with transportation, materials handling and warehouising, inventory, stockouts, order processing, and return goods handling.

Front 22

Customer Service

Back 22

Abiblity of logistics management to satisfy users in terms of time, dependability, communication, and convenience.

Front 23

-Cust. Service: Convenience-
Vendor-managed inventory (VMI)

Back 23

Inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.