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Terms in this set (29)
Supply chain "make and sell" view includes
the firm's raw materials, productive inputs, and factory capacity.
Demand chain "sense and respond" suggests
that planning starts with the needs of the target customer, and the firm responds to these needs by organizing a chain of resources and activities with the goal of creating customer value.
Value delivery network is
the firm's suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system.
Marketing (distribution) channels are
sets of independent organizations that help make a product or service available for use or consumption by the consumer or business user.
producers greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operations, intermediaries usually offer the firm more than it can achieve on its own.
Channel members add value by
Channel levels are
layers of intermediaries that perform some work in bringing the product and its ownership closer to the final buyer.
Direct marketing channel refers to
a marketing channel that has no intermediary levels.
Indirect marketing channels contain
one or more intermediary levels.
Marketing channel consists of
firms that have partnered for their common good with each member playing a specialized role.
refers to disagreement over goals, roles, and rewards by channel members:
Horizontal conflict occurs among
firms at the same level of the channel.
Vertical conflict occurs between
different levels of the same channel.
Conventional distribution systems consist of
one or more independent producers, wholesalers, and retailers. Each separate business seeks to maximize its own profits, even at the expense of profits for the system as a whole; there is little control over the other members and no formal means for assigning roles and resolving conflict.
Vertical marketing systems (VMSs) provide
channel leadership and consist of producers, wholesalers, and retailers acting as a unified system.
A Corporate vertical marketing system
integrates successive stages of production and distribution under single ownership.
A contractual vertical marketing system 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. The most common form is the franchise organization.
Franchise organizations are
contractual vertical marketing systems in which a channel member, called a franchisor, links several stages in the production-distribution process.
Manufacturer-sponsored retailer franchise system
Manufacturer-sponsored wholesaler franchise system
Service firm-sponsored retailer franchise system
Administered vertical marketing system has
a few dominant channel members without common ownership. Leadership comes from size and power.
Horizontal marketing systems are
when two or more companies at one level join together to follow a new marketing opportunity. Companies combine financial, production, or marketing resources to accomplish more than any one company could alone.
Multichannel distribution systems (hybrid marketing channels) are
when a single firm sets up two or more marketing channels to reach one or more customer segments.
Disintermediation occurs when
product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones.
Marketin channel design strives to
Analyse consumer needs
Setting channel objectives
Identifying major channel aleternatives
Consumer need questions
Do consumers want to buy from nearby locations or are they willing to travel to more distant, centralized locations?
Would they rather buy in person, by phone, or online?
Do they value breadth of assortment or do they prefer specialization?
Do they want many add-on services or will they obtain these elsewhere?
Setting channel objectives is chosing
Targeted levels of customer service
What segments to serve
Best channels to use
Minimizing the cost of meeting customer service requirements
Intensive distribution is
stocking the product in as many outlets as possible.
Exclusive distribution is
Giving a select few dealer exclusive right
Selective distribution is
Using more than one but fewer than all of the intermediaires avaiable
Each alternative needs to take into account
Adaptive criteria (balancing long term commitments with keeping the channel flexible)
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