Ch. 11 Section 2- Develop a Channel Strategy
the process of developing distribution objectives, evaluating internal and external environmental influences on distribution and choosing a distribution strategy
the number of intermediaries at each level of the channel
conventional marketing system
a multiple-level distribution channel in which channel members work independently of one another.
vertical marketing system (VMS)
a channel of distribution in which there is formal cooperation among members at the manufacturing, wholesaling and retailing levels
a vertical marketing system in which channel members remain independent but voluntarily work together because of the power of a single channel member
a vertical marketing system in which a single firms owns a manufacturing, wholesaling, and retailing operations
a vertical marketing system in which cooperation is enforced by contracts (legal agreements) that spell out each member’s rights and responsibilities and how they will cooperate
a group retailers that establishes a wholesaling operation to help them compete more effectively with the large chains
a contractual vertical marketing system that includes a franchiser (a manufacturer or a service provider) who allows an entrepreneur (the franchisee) to use the franchise name and marketing plan for a fee
horizontal marketing system
an arrangement within a channel of distribution in which two or more firms at the same channel level work together for a common purpose
channel leader or channel captain
the dominant firm that controls the channel
the ability of one channel member to influence, control, and lead the entire channel based on one or more sources of power.
occurs when producers, wholesalers, and retailers depend on one another for success
incompatible goals, poor communication, and disagreement over roles, responsibilities, and functions among firms at different levels of the same distribution channel that may threaten a manufacturer’s distribution strategy.
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