What Is A Marketing Channel (Or Distribution Channel)? How Are Channels Different For Business And Consumer Markets?

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Marketing (or distribution) channel

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A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.

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Discrepancy of quantity

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The difference between the amount of product produced and the amount an end user wants to buy

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Discrepancy of assortment

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The lack of all the items a cusomter needs to receive full satisfaction from a product or products

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Temporal discrepancy

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A situation that occurs when a product is produced but a customer is not ready to buy it

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Spatial discrepancy

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The difference between the location of a producer and the location of widely scattered markets

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Retailer

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A channel intermediary that sells mainly to consumers

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Merchant wholesaler

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An institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them

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Agents and brokers

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Wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers

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Dual distribution

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The use of two or more channels to distribute the same product to target markets

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Strategic channel alliance

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A cooperative agreement between bu

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Dual distribution

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The use of two or more channels to distribute the same product to target markets

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Strategic channel alliance

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A cooperative agreement between business firms to use the other's already established distribution channel

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Supply chain management

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A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value

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Selective distribution

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A form of distribution achieved by screening dealers to eliminate all but a few in any single area

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Exclusive distribution

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A form of distribution that establishes one or a few dealers within a given area

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Channel power

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The capacity of a particular marketing channel member to control or influence the behavior of other channel members

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Channel captain

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A member of a marketing channel that exercises authority and power over the activities of other channel members

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Channel conflict

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A clash of goals and methods between distribution channel members

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Vertical conflict

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A channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the maufacturer and retailer

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Channel partnering

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The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage

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Just-in-time (JIT) inventory management

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A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line

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Electronic data interchange (EDI)

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Information technology that replaces the paper documents that usually accompany business transactions, such as purchase orders and invoices, with electronic transmission of the needed information to reduce inventory levels, improve cash flow, streamline operations, and increase the speed and accuracy of information transmission

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Outsourcing

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A manufacturer's or supplier's use of an independent third party to manage an entire function of the logistics system, such as transportation, warehousing, or order processing

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Intensive distribution

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A form of distribution aimed at having a product available in every outlet where target customers might want to buy it

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Retailing

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All the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use

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Chain stores

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Stores owned and operated as a group by a single organization

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Franchise

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The right to operate a business or to sell a product

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Gross margin

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The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted

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Scrambled merchandising

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The tendency to offer a wide variety of nontraditional goods and services under one roof

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Mass merchandising

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A retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products

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Category killers

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Specialty discount stores that heavily dominate their narrow merchandise segment

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Telemarketing

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The use of the telephone to sell directly to consumers

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Private-label brands

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Brands that are designed and developed using the retailer's name

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Atmosphere

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The overall impression conveyed by a store's physical layout, decor, and surroundings

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Promotion

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Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

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Differential advantage

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One or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors

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Promotional mix

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The combination of promotional tools - including advertising, public relations, personal selling, and sales promotion - used to reach the target market and fulfill the organization's overall goals.

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Advertising

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Impersonal, one-way mass communication about a product or organization that is paid for by a marketer

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Public relations

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The marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance