Marketing Ch 14

describe the four types of marketing channels and the roles they play in marketing strategy
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describe the four types of marketing channels and the roles they play in marketing strategy
marketing channels are the systems of marketing institutions that enhance the physical flow of goods and services, along with ownership title, from producer to consumer or business user. In other words, they help bridge the gap between producer or manufacturer and business customer or consumer. Types of channels include direct selling, selling through intermediaries, dual distribution, and reverse channels.
what four functions do channels perform?
facilitating the exchange process
sorting
standardizing exchange processes
facilitating searches by buyers and sellers
direct selling
strategy designed to establish direct sales contact between producer and financial user
selling through intermediaries
used for products that serve markets in different areas of the country or world or have large numbers of potential end users
dual distribution
network that moves products to a firm's target market through more than one marketing channel
reverse channels
channel designed to return goods to their producers
major channel strategy decisions
decisions include selecting a marketing channel and determining distribution intensity
selecting marketing channel decisions
market factors
product factors
organization factors
distribution intensity decisions
intensive
selective
exclusive
describe the concepts of channel management, conflict, and cooperation
manufacturers must practice channel management by developing and maintaining relationships with the intermediaries in their marketing channels. The channel captain is the dominant member of the channel. horizontal and vertical conflict can arise when disagreement exists among channel members. cooperation is best achieved when all channel members regard themselves as equal components of the same organization.
describe the three different vertical marketing systemsa VMS is a planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating various functions throughout the distribution chain. this coordination can be achieved by forward integration or backward integration. options include a corporate marketing system, operated by a single owner; an administered marketing system run by a dominant channel member; and contractual marketing systems based on formal agreements among channel members.explain the roles of logistics and supply chain management in an overall distribution strategyeffective logistics requires proper supply chain management. the supply chain begins with raw materials, proceeds through actual production, and then continues with the movement of finished products through the marketing channel to customers. supply chain management takes plane in two directions: upstream and downstream. tools that markets use to streamline and mange logistics include radio frequency identification, enterprise resource planning, and logistical control.radio frequency identificationtechnology that uses a tiny chip with identification information that can be read by a scanner using radio waves from a distanceenterprise resource planning systemsoftware system that consolidates data from among a firm's various business unitsthird party logistics firmscompany that specializes in handling logistics activities for other firmssix major components of a physical distribution system1. customer service 2. transportation 3. inventory control 4. materials handling and protective packaging 5. order processing 6. warehousing must be balanced to create a smoothly functioning distribution systemcompare the 5 major modes of transportation1. railroads- high on flexibility, average in speed, dependability on meeting scheduling and cost, low on frequency 2. motor carriers- high in cost but high in speed, dependability, shipment frequency, and availability 3. water freight- slow speed, low frequency, limited availability but low cost 4. pipelines- low on availability, flexibility, and speed but low on cost 5. air freight- high in cost but fast and dependablediscuss the role of transportation intermediaries, combined transportation modes, and warehousing in improving physical distributionpiggyback, birdyback, and fishyback services-- all forms of intermodal coordination. methods like unitization and containeriation facilitate intermodal transfersbirdybacksends motor carriers to pick up a shipment locally and deliver that shipment to local destinations; an air carrier takes it between airports near those locations.piggybackmost widely used form of intermodal transportationfishybackcoordination system between motor carriers and water carriersdetermine between marketing channel and logisticsA marketing channel is an organized system of marketing institutions and their interrelationships, designed to enhance the flow and ownership of goods and services from producer to user. logistics is the actual process of coordinating the flow of information, goods, and services among members of the marketing channelfour functions that marketing channels perform1. facilitating the exchange process by reducing the number of marketplace contacts 2. sorting 3. standardizing exchange transactions 4. facilitating searches by buyers and sellersfour factors in selecting a marketing channelmarket, product, organizational, and competitivethree categories of distribution intensityintensive- distributes a product through all available channels selective- limited number of retailers in a market area exclusive- exclusive rights to a wholesaler or retailer to sell a manufacturer's productswhat is a channel captain and what is its role?its the dominant member of the marketing channel. its role in channel cooperation is to provide the necessary leadership.three types of channel conflicthorizontal- results from conflict among channel members at the same level vertical- channel members at different levels gray market- involves competition in the u.s market of brands produced by overseas affiliatesthree types of contractual marketing systemswholesale sponsored- voluntary chains retail cooperatives franchiseswhat is upstream/downstream managementupstream- involves managing raw materials, inbound logistics, warehouse and storeage facilities downstream- finished product storage, outboudn logistics, marketing and sales, and customer servicethree methods of managing logisticsRFID technology enterprise resource planning logistical cost controlsix major elements of physical distributioncustomer service transportation inventory control materials handling and protective packaging order processing warehousingwhat is suboptimizationoccurs when managers of individual functions try to reduce costs but create less than optimal resultswhich mode of transportation is experiencing a resurgence and whyrailroad transport because of the cost of fuel and its efficiency in transporting large amounts of freight while using less fuelbenefits of intermodal transportationfaster service and lower ratestwo types of warehouses and their functionstorage- hold goods for moderate to long periods of time to balance supply and demand distribution- assemble and redistribute goods as quickly as possible