Marketing Chapter 11

Front 1

Typical Indirect Channel

Back 1

Producer -> Wholesaler -> Retailer -> Consumer

Front 2

Channels: Vertical integration

Back 2

One of the parties in the channel chain takes over one of the responsibilities of someone above or below in the chain.

Front 3

Channels: Indirect

Back 3

Producer is not dealing directly with the consumer.

Front 4

Channels: Direct and Why trend towards more direct.

Back 4

When the producer sells directly to the consumer.
Trend towards more direct because: greater control, lower cost, internet, quick response, direct contact with customers, and less suitable intermediaries

Front 5

Channels-definition

Back 5

How you get your product to the consumers.

Front 6

Importance of Channel members

Back 6

1. Discrepancies of quantity.
2. Discrepancies of assortment.
3. Regrouping activities reduce discrepancies.

Front 7

Regrouping activities

Back 7

1. Accumulating-bringing together all the products producers need.
2. Bulk Breaking.
3. Sorting.
4. Assorting.

Front 8

Channel Captain-definition

Back 8

Some party in a channel that ensures that the channel runs smoothly (usually the producer). Help cooperation and resolve conflicts (multichannel distribution and channel conflict)

Front 9

Multichannel distribution

Back 9

Producers sell through indirect and direct channels. some times causes conflict.

Front 10

Channel Conflict

Back 10

Producer adds competition for their retailers by selling the same product directly to customers.

Front 11

Vertical Marketing System-definition

Back 11

Everyone in the channel is focused on the end consumer.

Front 12

Vertical Marketing System-Types

Back 12

1. Corporate-Single owner of every channel operation.
2. Administered-When you have a channel captain, but all parts of a channel are independent.
3. Contractual-Contract that binds the channel members. Wholesaler sponsored, Retail cooperative, or Franchise.

Front 13

Ideal Market Exposure-types

Back 13

1. Intensive.
2. Selective.
3. Exclusive.
4. Multichannel distribution.

Front 14

Ideal Market Exposure-Exclusive

Back 14

Horizontal arrangements-when competitors get together and divide up market (illegal).
Vertical arrangements-producer who sells to one wholesaler who sells to one retailer in a geographic area.

Front 15

Reverse channels

Back 15

Defective products
Recycling
Damaged products

Front 16

Methods of entering international markets

Back 16

(Listed from less risky and least control to most risky and most control)
1. Exporting-using an importer.
2. Licensing.
3. Management contracting.
4. Joint Venture-two firms who have expertise in each of their markets.
4. Direct investment-acquire existing firm or Greenfield venture (from ground up).