Chapter 12: Marketing Channels- Delivering Customer Value (Final Exam)

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Upstream Partners
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Raw Material suppliers, components, parts, information, finances, and expertise to create a product or service
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Downstream partners
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include the marketing channels or distribution channels that look toward the customer, including retailers and wholesalers
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Information
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Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.
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Promotion
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Developing and spreading persuasive communications about an offer.
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Contact
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Finding and communicating with prospective buyers.
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Matching
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Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging.
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Negotiation
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Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.
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Physical Distribution
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transporting and storing goods
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Financing
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acquiring and using funds to cover the costs of the channel work
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Risk Taking
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Assuming the risks of carrying out the channel work
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Risk taking
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assuming the risks of carrying out the channel work
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Marketing Channel
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consists of firms that have partnered for their common good with each member playing a specialized role
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Channel conflict
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disagreement over goals, roles and rewards can be horizontal (among franchisees) or vertical (KFC v. franchisees)
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Conventional distribution systems
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Independent producers, wholesalers and retailers Maximize its own profits Little control
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Vertical Marketing Systems (VMSs)
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provide channel leadership and consist of producers, wholesalers and retailers acting as a unified system and consist of: contractual marketing systems corporate marketing systems administered marketing systems
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Contractual Vertical Marketing System
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consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone (Ex. Franchise)
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Franchise Organization
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links several stages in the production distribution process. Manufacturer sponsored wholesaler/ retailer or service firm sponsored retailer franchise system
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Manufacturer sponsored retailer franchise system
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General Motors and it’s independent franchised dealers
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Manufacturer sponsored wholesaler franchise system
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Coca cola licenses bottlers
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Service firm sponsored retailer franchise system
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McDonald’s and its franchisee-operated restaurants
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Corporate Vertical Marketing System
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integrates successive stages of production and distribution under single ownership (Ex. Zara)
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Administered vertical marketing system
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a few dominant channel members without common ownership, leadership comes from zip and power. (Ex. P&G and retailers including Target)
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Horizontal Marketing systems
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when two or more companies at one level join together to follow a new marketing opportunity. Companies combine financial, production, or marketing resources to accomplish more than any one company could alone.
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Multichannel distribution system
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a single firm sets up two or more marketing channels to reach one or more customer segments
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Disintermediation
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occurs when a product or service producer cuts out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones
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Intensive distribution
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Ex. Candy and toothpaste
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Exclusive distribution
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luxury automobiles and prestige clothing
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Selective distribution
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television and home appliance

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