Chapter 13
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Created by:
amcretella on May 3, 2011
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Managing Marketing Channels and Supply Chains
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40 terms
Terms | Definitions |
|---|---|
 Marketing Channel | individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users |
| Middleman | any intermediary between manufacturer and end-user markets |
| Agent or Broker | any intermediary with legal authority to act on behalf of the manufacturer |
| Wholesaler | an intermediary who sells to other intermediaries, usually to retailers (usually applies to consumer markets) |
| Retailer | an intermediary who sells to consumers |
| Purpose of Intermediaries | intermediaries make possible the flow of products from producers to ultimate consumers by performing three basic functions |
| Three Types of Functions Marketing Intermediaries Complete | 1. Transactional Function 2. Logistical Function 3. Facilitating Function |
| Transactional Function Activities | 1. Buying 2. Selling 3. Risk Taking |
| Buying | purchasing products for resale or as an agent for supply of a product |
| Selling | contacting potential customers, promoting products, and seeking orders |
| Risk Taking | assuming business risks in the ownership of inventory that can become obsolete or deteriorate |
| Logistical Function Activities | 1. Assorting 2. Storing 3. Sorting 4. Transporting |
| Assorting | creating product assortments from several sources to serve customers |
| Storing | assembling and protecting products at a convenient location to offer better customer service |
| Sorting | purchasing in large quantities and breaking into smaller amounts desired by customers |
| Transporting | physically moving a product to customers |
| Facilitating Function Activities | 1. Financing 2. Grading 3. Marketing Info & Research |
| Financing | extending credit to customers |
| Grading | inspecting, testing, or judging products, and assigning them quality grades |
| Marketing Info & Research | providing information to customers and suppliers, including competitive conditions and trends |
| Direct Channel | - a producer and ultimate consumers deal directly with each other - no intermediaries, producer must perform all channel functions |
| Indirect Channel | intermediaries are inserted between the producer and consumers and perform numerous channel functions |
| Dual Distribution | arrangement whereby a firm reaches buyers by using two or more different types of channels for the same basic product |
| Strategic Channel Alliance | - where one firm's marketing channel is used to sell another firm's products - popular in global marketing, where the creation of marketing channel relationships is expensive and time consuming |
| Franchising | contractual arrangement in which a parent company (franchiser) allows an individual or firm (franchisee) to operate a certain type of business under an established name and according to specific rules |
| Intensive Distribution | - a firm tries to place its products or services in as many outlets as possible - usually chosen for convenience products or services |
| Exclusive Distribution | - only one retail outlet in a specific geographical area carries the firm's products - typically chosen for specialty products or services |
| Examples of Intensive Distribution | candy, newspapers, ATMs, and soft drinks |
| Examples of Exclusive Distribution | automobiles, yachts, some women's fragrences, men's and women's apparel and accessories |
| Selective Distribution | - a firm selects a few retail outlets in a specific geographical area to carry its products - most common form of distribution density, usually associated with shopping goods or services |
| Examples of Selective Distribution | Rolex watches, Wilson tennis racquets, LensCrafters vision care |
| Channel Conflict | arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals |
| Two Types of Conflict | 1. Vertical Conflict 2. Horizontal Conflict |
| Vertical Conflict | occurs between different levels in a marketing channel |
| Disintermediation | channel conflict that arises when a channel member bypasses another member and sells or buys products direct |
| Horizontal Conflict | occurs between intermediaries at the same level in a marketing channel |
| Logistics | - activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost - deals with decisions needed to move a product from the source of raw materials to consumption (the flow of the product) |
| Supply Chain | sequence of firms that perform activities required to create and deliver a product to consumers or industrial users |
| Total Logistics Cost | expenses associated with transportation, materials handling and warehousing, inventory, stockouts, order processing, and return goods handling |
| Customer Service | ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience |
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