Chapter 11: Marketing Channels

Front 1

What is a value delivery network?

Back 1

Value delivery network: the network made up of the company, suppliers, distributers, and ultimately customers who “partner” with each other to improve the performance of the entire system in delivering customer value

Front 2

Explain distribution channel.

Back 2

Distribution channel: a set of interdependent organizations that help to make a product or service available for use or consumption by the consumer or business user

Front 3

What is marketing intermediaries?

Back 3

Marketing intermediaries: transforming the assortments of products made by producers into assortments wanted by customers.

Front 4

What is physical distribution?

Back 4

Physical distribution: transporting and storing goods

Front 5

Explain financing.

Back 5

Financing: acquiring and using funds to cover the costs of the channel network

Front 6

What is risk taking?

Back 6

Risk-taking: assuming the risks of carrying out the channel work

Front 7

Explain promotion.

Back 7

Promotion: developing and spreading persuasive communications about an offer

Front 8

Describe the concept matching.

Back 8

Matching: shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling and packaging

Front 9

What is the definition of negotiation?

Back 9

Negotiation: reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred

Front 10

What is direct and indirect marketing channel?

Back 10

Direct marketing channel: a marketing channel that has no intermediary levels. The intermediary levels indicates the length of a channel

Indirect marketing channel: a channel that contains one or more intermediaries

Front 11

Describe a channel conflict.

Back 11

Channel conflict: disagreement among marketing channel members on goals and roles – who should to what and for what rewards.
- Horizontal channel conflict: occurs among firms at the same level of the channel
- Vertical channel conflict: conflict between different levels of the same channel

Front 12

What is a conventional distribution channel?

Back 12

Conventional distribution channel: consists of one or more independent producers, wholesalers and retailers

Front 13

What is VMS and all its components?

Back 13

Vertical marketing systems (VMS): a distribution channel structure in which producers, wholesalers and retailers act as a unified system. One channel member owns the others, has contracts with them, or wields so much power that they must all cooperate
- Corporate VMS: integrates successive stages of production and distribution under single ownership → coordination and conflict management are attained through regular organizational channels
- Contractual VMS: consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone.
o The franchise organization: manufacturer-sponsored retailer, manufacturer-sponsored wholesaler franchise system or the service-firm-sponsored retailer franchise system
- Administered VMS: leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members

Front 14

Explain horizontal marketing systems.

Back 14

Horizontal marketing systems: two or more companies at one level join together to follow a new marketing opportunity

Front 15

How is the process of marketing channel design?

Back 15

Marketing channel design: analyses customer needs, setting channel objectives, identifying major channel alternatives and evaluating them

Front 16

Describe three kinds of distributions.

Back 16

Intensive distribution: stocking the product in as many outlets as possible

Exclusive distribution: giving a limited number of dealers the exclusive right to distribute the company’s products in their territories

Selective distribution: the use of one, but fewer than all, of the intermediaries who are willing to carry the company’s products

Front 17

What is channel management?

Back 17

Marketing channel management: selecting, managing and motivating individual channel members and evaluating their performance over time

Front 18

Describe marketing logistics and supply chain management.

Back 18

Marketing logistics (physical distribution): planning, implementing and controlling the physical flow of goods, services and related information from points of orgin to points of consumption to meet customer requirements at a profit
Supply chain management: managing upstream and downstream value-added flows of materials, final goods and related information among suppliers, the company, resellers and final customers

Front 19

What is the goal of marketing logistics?

Back 19

The goal of marketing logistics should be to provide a targeted level of customer service at the least cost

Front 20

Explain warehousing, inventory management, transportation and intermodal transportation.

Back 20

- Warehousing: a company needs to decide how many and what types of warehouses it needs and where they will be located
- Inventory management: managers need to maintain the delicate balance between carrying too little and too much inventory
- Transportation: affects the pricing of products, delivery performance and condition of the goods when they arrive
- Intermodal transportation: combining two or more modes of transportation

Front 21

Explain integrated logistics management.

Back 21

Integrated logistics management: logistics information can be shared and managed in many ways but the most sharing takes place through traditional or internet-based electronic data interchange (EDI). The large retailers need to work closely with major suppliers to set up vendor-managed inventory or continuous inventory replenishment systems

Front 22

What is a third-party logistics provider?

Back 22

Third-party logistics (3PL) provider: an independent logistics provider that performs any or all of the functions required to get its client’s product to market

Front 23

What is retailing and what types are there?

Back 23

Is it all the activities involved in selling products or services directly to final consumers for their personal or business use.
- Specialty stores: carry a narrow product line with a deep assortment,
- Department stores: carry several product lines – with each line operated as a separate department managed by specialist buyers or merchandisers
- Supermarkets: a relatively large, low-cost, low-margin, high-volume, self-service operation designed to serve the consumer’s total needs for grocery and household products
- Convenience stores: relatively small stores located near residential areas, carrying a limited line of high-turnover convenience products at slightly higher prices
- Discount stores: carry standard merchandise sold a lower prices with lower margins and higher volumes
- Off-price retailers: sell merchandise bought at less-than-regular wholesale prices and sold at less than retail
- Superstores: large stores that meet the consumers total needs

Front 24

What are the retailer marketing decisions?

Back 24

Retailer marketing decisions: segmentation and targeting, store differentiation and positioning, and the retail marketing mix. Retailers must decide on three major product variables: product assortment, services mix and store atmosphere

Front 25

What is wholesaling?

Back 25

Wholesalers add value by performing one or more of the following channel functions:
- Selling and promoting
- Buying and assortment building
- Bulk breaking
- Warehousing
- Transportation
- Financing
- Risk bearing
- Market information
- Management services and advise