Chapter 15: Managing Marketing Channels & Supply Chains – Flashcards
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Marketing Channel
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consists of Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
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3 Functions Intermediaries Perform
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Transactional Function Logistical Function Facilitating Function
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Transactional Function
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-Buying: Purchasing products for resale or as an agent for supply of a product -Selling: Contacting potential customers, prompting products, and seeking orders -Risk Taking: Assuming business risks in the ownership of inventory that can become obsolete or deteriorate
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Logistical Function
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-Assorting: Creating product assortments from several sources to serve customers -Storing: Assembling and protecting products at a convenient location to offer better customer service -Sorting: Purchasing in large quantities and breaking into small amounts desired by customer -Transporting: Physically moving a product to customers
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Facilitating Function
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-Financing: Extending credit to customers -Grading: Inspecting, testing, or judging products and assigning them quality grades -Marketing Information & Research: Providing information to customers and suppliers, including competitive conditions and trends
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Multichannel Marketing
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involves the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online.
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Indirect Channel of Business Offerings
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Retailers Wholesalers->Retailers Agents->Wholesalers->Retailers -Industrial Distributor Agents Agents-->Industrial Distributor
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Dual Distribution
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involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
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Three Types oF Vertical Marketing Systems
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Corporate Contractual (most popular) Administered
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Vertical Marketing Systems
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are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.
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Corporate Systems
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Forward Integration Backward Integration
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Contractual Systems
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Wholesaler-Sponsored Voluntary Chains Retailer-Sponsored Cooperatives Franchising -Manufacturer-Sponsored Retail Franchises -Manufacturer-Sponsored Wholesale Franchises -Service-Sponsored Retail Franchises -Service-Sponsored Franchises
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Target Market Coverage
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Intensive Distribution Exclusive Distribution Selective Distribuiton
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Intensive Distribution
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is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.
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Exclusive Distribution
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is a level of distribution density whereby only one retailer in a specific geographical area carries the firm's products.
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Selective Distribuiton
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is a level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products.
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Buyer Requirements ; Profitability
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information convenience variety pre-or post-sale service
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Sources of Channel Conflict
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Vertical Conflict Disintermediation Horizontal Conflict
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Channel Conflict
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arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.
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Disinermediation
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involveschannel conflict that arises whena channel member bypasses another member and sells or buys products direct.
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Channel Influences
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Economic Expertise Identification Legitimate right
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The Channel Captain's Strength may be derived from having one of more of the following:
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-A strong image in the marketplace. -Ability to set policies that other channel members will follow. -Can coordinate and support the product flow from numerous producers. -Controls/owns a large number of outlets and/or purchasing power
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Legal Considerations Under Channel Relationships
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Dual Distribution Vertical Integration Exclusive Dealing Trying Arrangements Full-Line Forcing Refusal to Deal Resale Restrictions
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The Clayton Act restricts specific marketing channel strategies and practices. What are they?
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Vertical integration Exclusive dealing Dual distribution Tying arrangements Refusal to deal Full-line forcing
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The Sherman Act restricts specific marketing channel strategies and practices. What are they?
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Dual distribution Resale restrictions
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Logistics
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consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.
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Supply Chain
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consists of a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users.
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Logistics Management
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Customer requirements Cost-effective flow Customer service
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Supply Chain Management
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The automotive supply chain
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Aligning a Supply Chain with Marketing Strategy
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-Understand a customer -Understand the supply chain -Harmonize the supply chain with the marketing strategy
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Logistics & Supply Chain Management Supply Chain Mgmt & Mkt Strategy
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-Dell: A responsive supply chain -Wal-Mart: An efficient supply chain -Amazing: An efficient supply chain -Cross-docking
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Two Concepts of Logistics Management in A Supply Chain
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Total Logistics Cost Customer Service
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Total Logistics Cost
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consists of the expenses associated with transportation, materials handling and warehousing, inventory, stock-outs (being out of inventory), order processing, and return products handling.
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Customer Service
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is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.
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Supply chain managers balance six total logistics cost factors against four customer service factors What are they?
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Total logistic cost factors: 1.Materials handling and warehousing costs 2. Inventory costs 3.Stockout costs 4.Order processing costs 5.Return products handling costs 6.Transportation costs Customer service factors: 1. Time 2.Dependability 3.Communication 4.Convenience
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Customer Service Factors
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Time -order cycle time -replenishment time -inventory delivery systems -quick response -efficient consumer response Dependability Communication Convenience -Vendor Managed Inventory (VMI)
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Vendor-Managed Inventory
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is an inventory-management system whereby the supplier determines the product amount assortment a customer (such as a retailed) needs and automatically delivers the appropriate items
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Total Logistics Cost Factors
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Third-Party Logistic Providers Transportation Mode Service Criteria -cost, time, capability, dependability, accessibility, frequency
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Total Logistics Cost Factors- Transportation
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Railroads -unit train -intermodal transportation Trucks Air carriers and express companies Freight forwarders Pipe Lines Water Carriers
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Total Logistics Cost Factors- Warehousing & Materials Handling
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-Storage Warehouses -Distribution Centers -Materials Handling
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Total Logistics Cost Factors- Order Processing
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Stages of order processing Electronic Data Interchanges (EDI) Extranet
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Total Logistics Cost Factors- Inventory Mgmt
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Reasons for inventory Inventory costs -capital costs -inventory service costs -storage costs -risk costs Supply Chain Inventory Strategies -just-in-time(JIT) concept
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Reverse Logistics
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is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution,or disposal.
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Chapter 15: Managing Marketing Channels & Supply Chains
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