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consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users

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Marketing channel

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Any intermediary b/t manufacturer and end-user markets

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Middleman

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Any intermediary b/t with legal authority to act on behalf of the manufacturer

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Agent (broker)

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An intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets

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Wholesaler

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An intermediary who sells to consumers

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Retailer

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Describes intermediaries who perform a variety of distribution functions, selling, maintaining inventories, extending credit and referring to wholesalers

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Distributor

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A more imprecise term than distributor that can be the same as distributor, retailer, wholesaler, and so forth

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Dealer

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-Transactional function -Logistical function -Facilitating function

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Functions performed by intermediaries

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When they buy and sell products or services (Shares risk with the producer)

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Transactional function

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involve the details of preparing and getting a product to buyers. (Gathering, sorting, and dispersing products)

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Logistical function

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Make the transaction easier for the purchaser

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Facilitating function

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to having a product or service when you want it

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Time utility

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having a product or service available where consumers want it

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Place utility

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involves enhancing a product or service to make it more appealing to buyers

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Form utility

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entails efforts by intermediaries to help buyers take possession of a product or service, such as having airline tickets delivered by a travel agency

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Possession utility

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the producer and the ultimate consumers deal directly with each other

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Direct channel

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intermediaries are inserted between the producer and consumers and perform numerous channel functions (Ex: Retailers, wholesalers-> retailers, agents-> wholesalers-> retailers)

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Indirect channel

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business channels typically are shorter and rely on one intermediary or none at all because business users are fewer in number

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Business channels vs consumer

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which employ the Internet to make products and services available for consumption or use by consumers or organizational buyers (combining electronic & traditional intermediaries)

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electronic marketing channels

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allow consumers to buy products by interacting with various advertising media without a face-to-face meeting with a salesperson (Ex: include mail-order selling, direct-mail sales, catalog sales, telemarketing, interactive media, and televised home shopping)

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Direct marketing channels

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involves the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online

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Multichannel marketing

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involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product

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Dual distribution

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one firm's marketing channel is used to sell another firm's products

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strategic channel alliance

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are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact

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*Vertical marketing system*

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corporate, contractual, and administered

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3 types of vertical marketing systems

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::(1):: The combination of successive stages of production and distribution under a single ownership

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Corporate systems

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a producer might own the intermediary at the next level down in the channel

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Forward integration

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a retailer might own a manufacturing operation

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Backward integration

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::(2):: Independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone

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Contractual systems

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are prominent in the automobile industry, where a manufacturer such as Ford licenses dealers to sell its cars subject to various sales and service conditions.

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Manufacturer-sponsored retail franchise systems

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exist in the soft-drink industry, where PepsiCo licenses wholesalers (bottlers) that purchase concentrate from PepsiCo and then carbonate, bottle, promote, and distribute its products to retailers, vending machines, and restaurants

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Manufacturer-sponsored wholesale franchise systems

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are used by firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others

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Service-sponsored retail franchise systems

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exist when franchisors license individuals or firms to dispense a service under a trade name and specific guidelines

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Service-sponsored franchise systems

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::(3):: achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership

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Administered systems

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is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible

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*Intensive distribution*

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is a level of distribution density whereby only one retailer in a specific geographical area carries the firm's products

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*Exclusive distribution*

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is a level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products

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*Selective distribution*

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(1) information, (2) convenience, (3) variety, and (4) pre- or postsale services

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Buyer Requirements

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arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals

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Channel conflict

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reflects buyers' interest in having numerous competing and complementary items from which to choose

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Variety

question

provided by intermediaries are an important buying requirement for products such as large household appliances that require delivery, installation, and credit

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Pre- or post sale services

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determined by the margins earned (revenue minus cost) for each channel member and for the channel as a whole

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profitability

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occurs between different levels in a marketing channel—for example, between a manufacturer and a wholesaler or retailer or between a wholesaler and a retailer

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Vertical conflict

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occurs between intermediaries at the same level in a marketing channel, such as between two or more retailers (Target and Kmart) or two or more wholesalers that handle the same manufacturer's brands

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Horizontal conflict

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a channel member that coordinates, directs, and supports other channel members

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channel captain

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> economic > expertise > identification > legitimate right

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channel influence

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involves channel conflict that arises when a channel member bypasses another member and sells or buys products direct

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*Disintermediation*

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consists of those 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

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*Logistics*

question

decisions needed to move a product from the source of raw materials to consumption

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flow

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A firm needs to drive down logistics costs as long as it can deliver expected customer service

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customer requirements

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consists of a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users

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*Supply chain*

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is the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to consumer

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Supply chain management

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consists of the expenses associated with transportation, materials handling and warehousing, inventory, stockout, order processing, and return goods handling

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*Total logistics cost*

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To understand the customer, a company must identify the needs of the customer segment being served. These needs, such as a desire for a low price or convenience of purchase, help a company define the relative importance of efficiency and responsiveness in meeting customer requirements.

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Understand the customer

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a company must understand what a supply chain is designed to do well. Supply chains range from those that emphasize being responsive to customer requirements and demand to those that emphasize efficiency with a goal of supplying products at the lowest possible delivered cost.

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Understand the supply chain

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a company needs to ensure that what the supply chain is capable of doing well is consistent with the targeted customer's needs and its marketing strategy

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Harmonize the supply chain with the marketing strategy

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is the ability of logistics management to satisfy users in terms of *time, dependability, communication, and convenience*

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*Customer service concept*

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VMI is an inventory-management system whereby the supplier determines the product amount and assortment a customer needs and automatically delivers the appropriate times

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*Vendor-managed inventory*

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is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal.

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Reverse logistics

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the time between the ordering of an item and when it is received and ready for use or sale

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order cycle (replenishment)

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to make the process of reordering and receiving products as simple as possible, often through inventory systems

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quick response/efficient consumer response

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agent or broker.

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A channel intermediary that acts on behalf of the seller but does not take title to products is called a(n)

question

transactional

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Contacting potential customers, promoting products, and seeking orders would be an example of a(n) __________ function that intermediaries perform.

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low-cost, low unit value items.

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Adding a wholesaler to the marketing channel for consumer products is most common for

question

most profitable.

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Marketing executives typically consider three questions when choosing a marketing channel and intermediaries. These include: (1) which channel and intermediaries will provide the best coverage of the target market, (2) which channel and intermediaries will best satisfy the buying requirements of the target market, and (3) which channel and intermediaries will be the

question

Responsive supply chains use common platforms and common components across several products.

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Which statement regarding responsive supply chains is most accurate?

question

customer service

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The ability of a logistics system to satisfy users in terms of time, dependability, communications, and convenience is referred to as __________.

question

inventory management systems that are designed to reduce a retailer's lead time for receiving merchandise, which then lowers its inventory investment, improves its customer service levels, and reduce its total logistics expense.

answer

Quick response systems refer to

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warehousing and materials handling

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Total logistic cost factors in a supply chain include transportation, order processing, stockout, inventory, returns, and __________.

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place

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Having a Chevron gas station located on a long stretch of lonely highway is an example of __________ utility.

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dual distribution

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The channel strategy demonstrated when Hallmark sells its Hallmark brand greeting cards through Hallmark stores and select department stores and its Ambassador brand of cards through discount and drugstore chains is referred to as __________.

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● used a system in which its suppliers determined the product amount and assortment that should be in stock.

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At the end of a recent year, Solectron, a big Milpitas, California, electronics contractor, made half of its purchases under vendor-managed inventory programs. Solectron

question

● an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.

answer

Vendor-managed inventory refers to

question

● vendor-managed inventory

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An inventory-management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items is referred to as _________.

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● the concept that there should be a minimum of effort on the part of the buyer in doing business with the seller.

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Convenience refers to

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● complete delivery.

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Dependability is the consistency of replenishment. This is important to all firms in a supply chain and to consumers. It can be broken into three elements: consistent lead time, safe delivery, and

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● efficient consumer response delivery system.

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Saks Fifth Avenue has a point-of-sale scanner system to record each sale. When stock of fashion merchandise, such as a Donna Karan jacket, falls below a minimum level, the system automatically generates a replenishment order. When the Donna Karan vendor receives it, the electronic order is processed within 48 hours. This is an example of a(n)

question

● quick response systems.

answer

Inventory management systems that are designed to reduce the retailer's lead time for receiving merchandise which then lowers a retailer's inventory investment, improves customer service levels, and reduces logistics expense Is referred to as

question

● replenishment time.

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The limited employs a quick response system to order fast-moving fashion items. The limited's point-of-sale scanner records each sale. When stock falls below a minimum level, the system automatically sends an electronic order to the manufacturer, which processes the order immediately. This system has effectively reduced

question

● economic influence.

answer

A firm can become a channel captain because it is typically the channel member with the ability to influence the behavior of other members. Influence can take four forms: expertise; identification with a particular channel member; the legitimate right of one channel member to direct the behavior of other members; and

question

● a channel member (producer, wholesaler, or retailer) who coordinates, directs, and supports other channel members.

answer

Channel captain refers to

question

● horizontal conflict

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Goodyear Tire dealers became irate when Goodyear Tire Company decided to sell its brands through Sears, walmart, and Sam's Clubs. Many switched to competing tire makers. This is an example of

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● disintermediation

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While Maytag appliances have the leading brand name, its sales are third in the industry. One of the things the company has done to spur sales is to create a web site where potential customers can find the answers to the questions most asked during the appliance purchase process. While Maytag considered using __________ (allowing customers to purchase at the site), it decided against it and simply provides the name and address of the nearest Maytag dealers

question

● if a Mcdonald's franchise wanted to purchase its produce through its own vendor.

answer

Which of the following would be a source of vertical conflict?

question

● vertical conflict

answer

Conflict that occurs between two different levels in a marketing channel is referred to as

question

● the extent to which channel members share costs determines the margins received by each member and by the channel as a whole.

answer

The third consideration in choosing a channel is profitability, which is determined by the margins earned (revenue minus cost) for each channel member and for the channel as a whole. Based on this information, which of the following statements would be most accurate?

question

● convenience

answer

Channels are typically designed to satisfy one or more of four consumer interests. When a membership book club allows its members to use the internet to notify the company whether they want to receive the next month's issue, the book club is appealing to which buyer requirement?

question

● pre-or post-sale services

answer

The four major considerations for satisfying buyer requirements when designing distribution channels include: (1) information, (2) convenience, (3) variety, and (4) _________.

question

● information

answer

The four major considerations for satisfying buyer requirements when designing distribution channels include: (1) convenience, (2) variety, (3) pre-or post-sale services, and (4) ________.

question

● selective

answer

A level of distribution density whereby a firm tries to place its products in a few retail outlets in a specific geographical area is referred to as _________.

question

● chanel perfume, Steinway pianos, and Baccarat crystal

answer

For which of the following products would the manufacturer be most likely to use exclusive distribution?

question

● strategic channel alliance

answer

An example of a(n) __________ occurred when general mills used the distribution system of nestlé, to market its Honey Nut Cheerios in France, the United kingdom, Spain, and Portugal.

question

● electronic marketing channel

answer

Machinetools.com sells grinders, boring mills, and engine lathes. The web site has listed goods from over 700 machinery manufacturers, 2,500 distributors of new equipment, and 650 dealers of used inventory for sale at the web site. Machinetools.com relies on a well-established channel of manufacturers, distributors, and machinery dealers to provide the merchandise that is sold through this

question

● industrial distributor

answer

An intermediary that performs a variety of marketing channel functions involving selling, stocking, and delivering a full product assortment and financing, is referred to as a(n) _________.

question

● total logistics costs

answer

Expenses associated with transportation, materials handling and warehousing, inventory, stockouts, and order processing costs are referred to as ________.

question

● efficient supply chain

answer

Walmart's marketing strategy is to be a reliable, lower-price retailer for a wide variety of mass consumption consumer goods. This strategy favors a(n) __________ designed to deliver products to consumers at the lowest possible cost.

question

● customer requirements

answer

In the automobile industry, the supply chain manager is responsible for translating __________ into actual orders and arranging for delivery dates.

Mktg Chapter 12 – Flashcards

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