Chapter 11: Marketing Channels

value delivery network
network made of companies, suppliers, distributors, customers who partner to improve performance of entire system in delivering customer value
marketing channel
set of independent organizations that help make product or service available for use or consumption by consumer or business
channel partners
business owned + operated independently from manufacturers to perform a specific function in movement of product
channel partner; business of selling G+S to consumers for personal use
channel parter; all activity involved in selling goods + services to those buying for resale/business use
drop shipper
channel parter; takes orders + payment from customer then arrange to have merchandise shipped to customer directly from suppliers
rack jobber
channel partner; wholesaler buys merchandise + resells on “racks” in a retail store
channel partner; bring buyers + sellers together and assist in negotiation
channel partner; representative of buyer or seller
direct marketing
producer of goods sells directly to customers
indirect marketing
have one or more intermediaries
channel conflict
disagreement amount marketing channel members over goals, roles, rewards
horizontal conflict
conflict; among firms at same level of channel
vertical conflict
conflict; between different levels of same channel
vertical marketing system
structure which producers, wholesalers, retailers act as unified system
corporate VMS
VMS; combine successive stages of production + distribution under single ownership
administered VMS
VMS; coordinate successive stages of production + distribution through size and power of one
contractual VMS
VMS; independent firms at different levels of production work together under contract
franchise organization
links several stages in production and distribution process

-controls operations from central headquarters office

horizontal marketing systems
2 or more companies operates at the same channel level join together to follow a new marketing opportunity
multichannel distribution systems
single firm sets up 2 or more marketing channels to reach one or more market segments
intensive strategy
distribution strategy; product is stocked in as many outlets as possible
selective strategy
distribution strategy; select set of retailers that specialize in product category
exclusive distribution
distribution strategy; marketer gives right to distribute its products to only ONE RETAILER in particular geographic territory
self serve retailers
type of retailers; customer perform own locate, compare, select process to save time and money
limited service retailers
type of retailers; provide some sales assistance because carry product that requires advice and information
full service retailers
type of retailer; salespeople assist in every phase of shopping
specialty stores
type of retailer; narrow product lines with deep assortments
department stores
type of retailer; carry wide variety of product lines
category killers
type of retailer; very large specialty stores that carry thousands of products in particular category
service retailers
type of retailer; product line offered is service
discount stores
type of retailerstandardized merchandise at lower price by accepting lower margin + high volume
off-price retailers
type of retailer;buy end of season/overstock goods at less than regular price + sell at lower price
factory outlets
type of retailer;manufacturer owned and operated stores
warehouse clubs
type of retailer; operate in huge warehouse-like facilities
logistics management
planning, implementing, controlling the physical flow of materials, final goods and related information from points of origin to points of consumption
outbound distribution
logistics management; moving products from factory to resellers and ultimately to customers
inbound distribution
logistics management; moving products from suppliers to the factory
reverse distribution
logistics management; moving broken, unwanted, or excess products returned by consumer/reseller
just in time logistics
type of inventory management where only small inventory is held and new stocks arrive ‘just in time’ when needed
third party logistics provider
independent logistics provider that performs any/all functions required to get clients product to market

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