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34 Cards in this Set

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channel intermediaries
set of organizations involved in the process of making a product/service available for consumption
agent/broker
negotiates sales without taking title to the goods, generally paid by commission or fees
wholesaler
takes title to the goods and resells them
retailer
sells to end user
facilitating agency
simply carries the goods, postal service, railroad
channel functions
set of activities that must be performed to deliver the product/service to the end user
transactional functions
buying (wholesalers), selling, risk-taking
logistical functions
transporting, storing, sorting, creating assortments
facilitating functions
financing, information/research, promoting, inspecting/testing
channels evolve with PLC
specialized channels -> alternative channels -> mass channels
density of coverage
-exclusive
-selective
-intensive
exclusive
-high influence of reseller marketing activities
-high margins throughout channel
-stable levels of distribution
-less competition at point of sale
selective
-resellers compete to carry our product
-less reseller loyalty
-good market coverage, more control, less cost intensive
intensive
-high coverage
-convenient for end customers
-high conflict potential
vertical integration
own the channel vs. let other firms handle certain distribution functions=conventional distribution channel
reasons to integrate
need to control (specialized training, processes), importance of non-selling activities (info gathering, relationship building, consistent brand image), importance of key accounts, easier to monitor, motivate, control, don't have to compete for reps' attention, high product complexity, difficulty of evaluating performance
reasons to outsource
motivation (rewards for success, fear of failure), specialization (focused energy), economies of scale (larger assortments and warehouses), market coverage (market knowledge), credibility with end user
compromise strategy
different channels for different customers
multiple channels
-hybrid marketing system
-different customers, products may require different channels
multiple channel used
-mature industries
-variety of potential users
objective criteria for multiple channels
-size of account
-nature of application
-geography
channel conflict and power
power is the ability to get channel members to do things, often helps efficiency
causes of conflict
different expectations, differences in perception, disagreement over who should do what, poor communication, imbalances in channel power
reward power
economic advantages that grow if a channel leader's wishes are followed
coercive power
-involves negative sanctions or possible punishments to get another channel member to conform
-good in short run, corrosive over time
legitimate power
-based on the belief that one channel member has the right to exert influence on other channel members and to expect compliance
-laws, contracts, and agreements as well as industry values and norms
expert power
-based on the perception that one channel member has special knowledge that will be beneficial
-holding valuable info the channel member doesn't have and could use
referent power
gained from superior image or association based on pride in a present or anticipated relationship
balancing power and conflict
maximizing profits across the channel
sources of distribution change
social, technological, regulatory, globalization
growth of new channels
online auctions and exchanges, peer-to-peer networks
trends in marketing
-growth of direct marketing
-"downstream" power shifts (from producers and wholesalers to retailers)
-more hybrid systems
-greater degree of sophistication in order fulfillment and customer tracking
retailing stores
specialty, department, "category killer", discount
non-store
direct (catalogues, telemarketers, internet), automatic vending