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59 Cards in this Set

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Marketing Channel
(AKA distribution channel, channel of distribution) the network of organizations that creates time, place, and possession utilities for consumers and business users
Time, place, possession utilities
conditions that enable consumers and business users to have products available for use when and where they want them and to actually take possession of them
Sales Channel
that part of the channel involved in buying, selling, or transferring title
Facilitating Channel
the transportation firms, which do not buy, sell, or transfer titles
Channel Structure
the form or shape that a marketing channel takes to perform the tasks necessary to make products available to consumers (facilitating agencies not considered part of channel structure)
Channel Length
the number of levels in a marketing channel (ranges from 2 to 10, commonly 2 to 5)
Channel Intensity
refers to the number of intermediaries at each level of the marketing channel
Intensive Distribution
occurs when all possible intermediaries at a particular level of the channel are used
Selective Distribution
a carefully chosen group of intermediaries is used at a particular level in the marketing channel
Exclusive Distribution
occurs when only one intermediary is used at a particular level in the marketing channel
Scrambled merchandising
where all kinds of products are sold in stores not traditionally associated with those products
Concentration
bringing products together from many manufacturers
Equalization
adjusting the quantities of products to balance supply and demand
Dispersion
delivering products to final customers
Distribution Tasks
(AKA marketing functions, channel functions) often described by functions such as buying, selling, risk taking, transportation, storage, order processing, and financing.
Discrepancies between production and consumption
differences in quantity, assortment, time, and place that must be overcome to make goods available to final customers
Specialization or division of labor
each worker in a factory focuses on performing particular manufacturing tasks and thereby develops specialized expertise and skills in performing those tasks, resulting in greater efficiency and higher output
Economies of scale and economies of scope
obtained by spreading the costs of distribution over a large quantity of products (scale) or over a wide variety of products (scope)
Transaction efficiency
refers to designing marketing channels to minimize the number of contacts between producers and consumers (lengthening transaction structure creates fewer transactions)
Product flow
the actual physical movement of the product from the manufacturer through all of the parties who take physical possession of the product, from its point of production to consumers
Negotiation flow
the interplay of the buying and selling tasks associated with the transfer of title to the products
Ownership flow
the movement of the title to the product as it is passed along from the manufacturer to final consumers
Information flow
the exchange of information
Promotion flow
the flow of persuasive communication in the form of advertising, personal selling, sales promotions, and public relations
Flows in marketing channels
the movement of products, negotiation, ownership, information, and promotion through each participant in the marketing channel.
Marketing channel power
the capacity of one channel member to influence the behavior of another channel member
Conflict in marketing channels
occurs when one channel member believes that another channel member is impeding the attainment of its goals
Tying arrangements
when a producer attempts to force channel members to buy a particular product as a condition for access to another product
Exclusive dealing
a manufacturer requires channel members to carry only its brand
Price discrimination
a producer or manufacturer charges different prices to the same class of channel member for the same products
Territorial restrictions
a producer or manufacturer dictates where a channel member such as a wholesaler can sell its products
Full-line forcing
a manufacturer requires a channel member such as a retail to buy undesirable products from the manufacturer in order to obtain the manufacturers’ most desirable products
Marketing channel management
(AKA channel management) refers to the analysis, planning, organization, and control of a firm’s marketing channels
Interorganizational context
refers to the channel management that extends beyond a firm’s own organization into independent businesses
Channel strategy
the broad set of principles by which a firm seeks to achieve its distribution objectives to satisfy its customers
Sustainable competitive advantage
a competitive edge that cannot be easily or quickly copied by competitors in the short run
Channel design
the process of developing new channels where none existed before, or making significant modifications to existing channels
Distribution objectives
refer to what the firm would like its channel strategy to accomplish in terms of meeting the needs of its customers
Bottom-up or backward approach
refers to the need to state distribution objectives from the point of view of the customer
Selection criteria
the factors that a firm uses to choose which intermediaries will become members of its marketing channel
Motivating channel members
refers to the actions taken by manufacturers (or franchisers) to get channel members to implement their channel strategy
Information support approaches
“throwing money at a particular need or problem without thinking too deeply about it.” (Advertising dollars, promotional support, incentives, etc.)
Strategic alliances or channel partnerships
support provided by the manufacturer is based on extensive knowledge of the needs and problems of the channel members and is carried out on a long-term basis
Vertical marketing systems (VMS)
professionally managed or centrally programmed networks, pre-engineered to achieve operating economies and maximum impact
Administered VMS
characterized by a careful and comprehensive program developed by one of the channel members to support the efforts of other channel members
Contractual VMS
consists mainly of retail cooperatives, wholesaler-sponsored voluntary chains, and franchise systems
Retail cooperatives
created when a group of retailers unites and agrees to pool its buying power and contribute to the operation of the cooperative by collectively supporting its own major management tasks
Wholesaler-sponsored voluntary chains
similar to retail cooperatives, except that a wholesaler gets large numbers of retailers to work together
Franchising
characterized by a close business relationship between franchiser and franchisee that includes not only the product, service, and trademark but also the entire business format itself
Corporate VMS
exists when a firm owns and operates the organizations at other levels in the marketing channel
Product positioning strategy
seeks to present products to customers in a way that gives the products a certain image compared to competitive products
Logistics
(AKA physical distribution) planning, implementing, and controlling the physical flows of materials and final products from points of origin to points of use to meet customers’ needs at a profit
Supply-chain management
managing logistical systems to achieve close cooperation and comprehensive interorganizational management, so as to integrate the logistical operations of different firms in the marketing channel
Systems concept of logistics
entails viewing all components of a logistical system together and understanding the relationships among them
Total-cost approach
calculating the cost of a logistical system by addressing all of the costs of logistics together rather than individual costs taken separately, so as to minimize the total cost of logistics
Cross-docking
(AKA flow-through distribution) products from an arriving truck are not stored in a warehouse and then resorted later to fill orders. Rather, the merchandise is simply moved across the receiving dock to other trucks for immediate delivery to stores
Order-cycle time
the time between when an order is placed and when it is received by the customer
Economic order quantity (EOQ)
occurs at the point at which total costs (inventory carrying cost plus ordering costs) are lowest.
Logistical service standards
the kinds of quantifiable distribution services performed by a logistical system to meet customer needs