Chapter 10: Marketing Channels. Delivering Customer Value – Flashcards
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Define Value Delivery Network
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A network composed of the company, suppliers, distributors, and ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value.
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Define Marketing Channel (or Distribution Channel)
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A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.
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Define Channel Level
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A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.
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Define Direct Marketing Channel
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A marketing channel that has no intermediary levels.
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Define Indirect Marketing Channel
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A marketing channel containing one or more intermediary levels.
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Define Channel Conflict
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Disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards.
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Define Conventional Distribution Channel
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A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole.
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Define Vertical Marketing System (VMS)
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A channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate.
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Define Corporate VMS
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A vertical marketing system that combines successive stages of production and distribution under single ownership -channel leadership is established through common ownership.
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Define Contractual VMS
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A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts.
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Define Franchise Organization
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A contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production-distribution process.
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Define Administered VMS
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A vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties
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Define Horizontal Marketing System
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A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.
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Define Multichannel Distribution System
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A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments.
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Define Disintermediation
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The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries.
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Define Marketing Channel Design
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Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.
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Define Intensive Distribution
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Stocking the product in as many outlets as possible
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Define Exclusive Distribution
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Giving a limited number of dealers the exclusive right to distribute the company's products in their territories
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Define Selective Distribution
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The use of more than one but fewer than all of the intermediaries that are willing to carry the company's products.
