MARKETING CHANNELS Concepts Ch. 1 – Flashcards
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retail store, mail order, wholesale distributor, sales representative, call center, company sales force, vending machine, company-owned retail store
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Channels include
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the external contactual organization that management operates to ACHIEVE its distribution OBJECTIVES.
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marketing channel definition is
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the ONLY parties who perform NEGOTIATORY functions of BUYING, SELLING & TRANSFERRING TITLE are members of the contractual organization. [wholesalers, individual distributors, manufacturing representatives, selling agents, brokers]
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marketing channel PARTICIPANTS are
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are product, price, promotion, distribution
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FOUR basic strategic VARIABLES of marketing mix
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provide SUPPORT and ENHANCE other strategic marketing mix variables of product PRICE and PROMOTION.
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Channel manager must DEVELOP and OPERATE the EXTERNAL contactual organization (the marketing channel) so that it will
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setting up and operating the contactual organization responsible for MEETING the firm's DISTRIBUTION OBJECTIVES
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Channel STRATEGY is concerned with the entire process of
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when a firm chooses to reach customers through more than one channel.
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Multi-Channel strategy increase in frequency means
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providing product AVAILABILITY at the appropriate TIME and PLACE in the marketing channel.
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LOGISTICS management is more narrowly focused on
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links that tie channel MEMBERS and AGENCIES together in DISTRIBUTION of goods and services.
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Channel flows
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product flow, negotiation flow, ownership flow, information flow, promotion flow
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Channel flows management considers most important
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to manage all of these five channel flows in order to achieve the firm's distribution
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Channel manager's job
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to use intermediaries (wholesalers/retailers in contactual organization ) or facilitating agencies as well.
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Channel manager must decide whether
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channel includes members that are independent firms and there are effects from environmental constraints.
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Channel manager does NOT have complete control over allocation of distribution tasks because
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allocating a set of distribution tasks to a group of channel members (done by channel manager)
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Channel structure (MANAGERIAL perspective) is
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the manager allocates or structures a set of distribution tasks to be performed in order to accomplish distribution objectives.
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Allocation decision is based on
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brick and mortar, big box stores
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Land-based channels
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Business to Business sector
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B2B
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Business to customer
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B2C
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find optimal multi-channel mix; create multi-channel synergies; avoid multi-channel conflicts; gain substantial competitive advantage via multi-channel strategy.
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multi-channel challenge is to
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using one channel to ENHANCE EFFECTIVENESS & EFFICIENCY of other channels (e.g., using online channels to obtain information about product before purchasing in conventional brick and mortar channels)
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Multi-Channel Synergies
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different channels in mix do this and create better customer service (as in, customer encounters a stock-out and is served by another channel in the mix)
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Help each other out
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knowledge of economic and behavior factors underlyiing marketing channels
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CONFLICT in multi-channels are a challenge to avoid so these are needed:
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This book
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Cengage 8th edition
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external and uncontrollable factors: economy, government, socio-cultural buyer behavior patterns, competition, technology
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Marketing Mix MODEL: external and uncontrollable (environmental factors) such as
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non-marketable functions (in firm): financial, personnel, production, location, research & development patents, public image
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Marketing Mix MODEL: non-marketable functions (in firm) such as
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product, price, promotion, distribution
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Marketing Mix MODEL: marketing mix [in the firm] such as
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customers are at the center
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Marketing Mix Model is centered around
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Product flow Negotiation flow Ownership flow Information flow Promotion flow
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The FLOWS in Marketing Channels that provide links tying channel members and agencies together in distribution of goods and services are
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physical movement of the product from the manufacturer through ALL of the parties who take physical possession of product (production to consumer)
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Product flow is
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interplay of the buying and selling functions associated with transfer of title/right of ownership.
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Negotiation flow is
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movement of title to product as it is passed from manufacturer to final consumers.
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Ownership flow is
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all parties participate in exchange of information and flow can be either up or down.
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Information flow is
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flow of persuasive communication in form of advertising, personal selling, sales promotion and publicity. (Advertising agency active in providing and maintaining promotion flow, esp. advertising element.)
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Promotion flow is
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eliminating the middleman via Internet capacities
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Disintermediation implies
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"The Wealth of Nations"
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Specialization/Division of Labor attributed to Adam Smith's 1776 book
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by breaking down a complex task into smaller, less complex ones and allocating them to parties specialize in performing them, much greater efficiency results.
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Specialization/division of labor concept holds that
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production --> intra-organizationally and distribution --> inter-organizationally
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Specialization/division of labor in production vs. distribution difference is that
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INPUT [NEGOTIATION EFFORT] between sellers and buyers to achieve OUTPUT [DISTRIBUTION OBJECTIVE].
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Contactual efficiency is the relationship of the
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the group of institutions (facilitating agencies) that ASSISTS channel members in performing distribution tasks.
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Ancillary structure [non-members] is
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it only provides services to the channel members AFTER the basic channel decisions have already been made. .
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Ancillary structure development and management is less complex than for channel structures because
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"farming out" tasks of transportation, storage, insurance, financing and advertising.
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Ancilliary or facilitating agencies might be used when "farming out" performance of non-negotiatory tasks such as
