Chapter 14

Front 1

Value Chain:

Back 1

business activities that design, produce, market,deliver and service product for customers

Order fulfillment, product development, R&D,quality control, facilities management, customer service, returns, etc.

Front 2

Value Delivery Chain:

Back 2

all of the parties who engage in value chainactivities

Front 3

Direct Channel of Distribution

Back 3

Involves the movement of goods and services from producer to consumers without the use of independent intermediaries.

Front 4

Indirect channel of distribution

Back 4

involves the movement of goods and services from producer to independent interdependent intermediaries to consumers.

Front 5

WhyUse Intermediaries?

Back 5

Each transaction is costly (e.g., selling 1,000 units to 1 vs. 10 units to 100)

Efficiency (convenience)

Aid producers who lack resources to market directly

marketing channels add value

Front 6

Channel Length:

Back 6

levels of independent members along a distribution chann

Front 7

Channel Width:

Back 7

number ofindependent members at any stage of the distribution channel

Front 8

Characteristics and why would they choose aspecific distribution coverage

Back 8

exclusive, intensive, selective

Front 9

Exclusive Distribution

Back 9

A firm severely limits the number of resellers utilized in a geographic area . Perhaps having only one or two resellers within a specific shopping location.

(it seeks a prestige image, channel control, and high profit margins and accepts lower total sales than in other types.

Front 10

Intensive

Back 10

A firm uses larger number of resellers.

its goals are wide market coverage channel acceptance, and high total sales and profits.

Front 11

Selective

Back 11

a firm employs a moderate number of resellers. It wants to combine some channel control and a solid image with good sales volume and profits.

Front 12

Channel Cooperation Types

Back 12

(Administered vertical, Corporate vertical, and Contractual vertical market system)

Front 13

Administered Vertical

Back 13

Developroutinized, automatic transactions – not just a one-time deal!

Dominantchannel members holds power (ability/means to dictate actions of other members)

Front 14

Corporate Vertical

Back 14

Parentcompany has complete control and can dictate objectives of the marketingchannel because it owns multiple parts of it: plants, warehouses, retailoutlets

Front 15

Contractual Vertical

Back 15

Overtime, relationship is formalized by entering into contracts indicating variousterms (purchase quantities, prices, penalties for noncompliance)

Front 16

EDI Electronic Data Interchange

Back 16

suppliers, manufacturers,wholesalers, and/or retailers exchange data via computer linkups (speed up theflow of data)

e.g., sales data, purchase orders, invoices, returnedmerchandise info

Front 17

JIT (Just in time)

Back 17

Inventorymanagement systems that deliver less merchandise on a more frequent basis

Front 18

Economic Order Quantity (EQO)

Back 18

the ordervolume corresponding to the lowest sum of order-processing andinventory-holding costs

Front 19

Stock Turnover

Back 19

refers to the number of times during a stated periodthat average inventory on hand is sold

Front 20

Pushing Strategy

Back 20

Manufacturer/service producer- distribution intermediaries-consumers

Front 21

Pulling Strategy

Back 21

Manufacturer/ service provider-consumers-distribution intermediaries

(Less likely to be over orunder-stocked because stores order merchandise as needed based on consumerdemand)