Chapter 11: Marketing Channels and Chapter 12: retailing, wholesaling

What is a market channel?
a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business customer
How might channel partners add value?
producers use intermediaries because they create greater efficiency in making goods
What is a retailer?
the business of selling products or services to consumers for their personal use
What is a wholesaler?
companies whose primary business is wholesaling (good and services that are for resale or business use)
what is a drop shipper?
an intermediary that takes orders and payments from the customer, then arranges to have the merchandise shipped directly from the supplier
what is a rack jobber?
a wholesaler that buys merchandise and resells it on racks inside a retail store, in partnership with the retailer
What is a broker?
a wholesaler that does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation
What is an agent?
A representative, either of a buyer or a seller, who performs only a few functions and does not take title to goods
What is a direct marketing channel?
delivers products to consumers directly from a producer
what is an indirect marketing channel?
involves intermediaries between the producer and consumer
– b-to-b companies often market and sell their products directly to their customers through their own sales force
What are the channel structures for consumer products?
direct marketing channels and indirect marketing channels
What is a conventional marketing system?
one producer distributes products through one wholesaler or distributor, and from there to several or many retailers
what is a vertical marketing system?
a distribution channel structure in which producers, wholesalers, and retailers act as a unified system
– one channel members owns the others, has contracts with them, or has so much power that they all cooperate
What is a corporate vertical marketing system?
combines successive stages of production and distribution under single ownership; channel leadership is established through common ownership
What is a administered vertical marketing system?
a vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties
What is contractual vertical marketing system?
a vertical marketing system in which independent firms at different levels of production and distribution work together under contract
What is a horizontal marketing system?
an arrangement in which two or more companies that operate at the same channel level join together to follow a new marketing opportunity
– by working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could alone
What is a multichannel distribution system?
a distribution system in which a single firm sets up two or more marketing channels to reach one or more marketing segments
– example: Zara sells merch online and through retail distribution channels
What are the 3 types of distribution channel strategies?
1. intensive
2. selective
3. exclusive
What is intensive distribution?
a marketing strategy in which the product is stocked in as many outlet stores as possible
– these types of products are found in convenience stores, or there are necessities like toothpaste and TP
What is selective distribution?
a distribution strategy in which the marketer selects a set of retailers that specialize in their product category
– e.g. whirlpool and General Electric sell their appliances at Sears and other large department stores
What is exclusive distribution?
a distribution strategy in which the marketer gives the rights to distribute its products to only one retailer, or to only one retailer in a particular geographic location
What is marketing channel design?
designing effective marketing channels by analyzing customer needs, setting channel objectives, determining the types and responsibilities of channel members, and making decisions about international distribution channels
How do companies set channel objectives?
companies should state their marketing channel objectives in terms of targeted levels of customer service
What is a convenience store?
a small store, located near a residential area, that is open long hours or seven days a week and carries a limited line of high-turnover convenience goods
What is a discount store?
a retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume
what is a speciality store?
a retail store that carries a narrow product line with a deep assortment within that line
what is a department store?
a retail store that carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers
What is a supermarket?
a large, low cost ,low margin, high volume, self service store that carries a wide variety of groceries and household products
What is a general merchandise store?
a store that sells a broad selection of merchandise where people can purchase their general goods
what is a superstore?
a store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services
What is a category killer?
A giant specialty store that carries a very deep assortment of particular lines
What is a service retailer?
A retailer whose product line is actually a service
example: hotels, airlines, banks
What is a off-price retailer?
a retailer that buys at less-than-regular wholesale prices and sells less than retail
What is a independent off-price retailer?
an off-price retailer that is either independently owned and run or a division of a larger retail corporation
What is a factory outlet?
An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturers surplus, discontinued, or irregular goods
What is a warehouse club?
an off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing and other goods and deep discounts to members who pay annual membership fees
What is a corporate chain?
two or more outlets that are commonly owned and controlled
What is a franchise?
A contractual association between a manufacturer, wholesaler, or service
What are the retail trends and developments?
– experimental
– in-store technology
– Gift cards
– Shopper Marketing
– Social media and mobile

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