MKT 3305 Chapter 14 Marketing Channels

Marketing channel (channel of distribution)
a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer
Channel members
all parties in the marketing channel who negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer
Form utility
the elements of the composition and appearance of a product that make it desirable
Time utility
the increase in customer satisfaction gained by making a good or service available at the appropriate time
Place utility
the usefulness of a good or service as a function of the location at which it is made available
Exchange utility
the increased value of a product that is created as its ownership is transferred
a channel intermediary that sells mainly to consumers
Merchant wholesaler
an institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them
Agents and brokers
wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers
Direct channel
a marketing channel in which there are no intermediaries
Dual distribution (multiple distribution)
the use of two or more channels to distribute the same product to target markets
Nontraditional channels
non-physical (often electronic) channels that facilitate the unique market access of products and services
Strategic channel alliance
a cooperative agreement between business firms to use the other’s already established distribution channel
Reverse channel
a channel that enables customers to return products or components for reuse or remanufacture
Drop and shop
a system that allows customers to recycle used electronics at the entrance of a retailer
Intensive distribution
a form of distribution aimed at having a product available in every outlet where target customers might want to buy it
Selective distribution
a form of distribution achieved by screening dealers to eliminate all but a few in any single area
Exclusive distribution
a form of distribution that establishes one or a few dealers within a given area
Arm’s-length relationship
a relationship between companies that is loose, characterized by low relational investment and trust, and usually taking the form of a series of discrete transactions with no or low expectation of future interaction or service
Cooperative relationship
a relationship between companies that takes the form of informal partnership with moderate levels of trust and information sharing as needed to further each company’s goals
Integrated relationship
a relationship between companies that is tightly connected, with linked processes across and between firm boundaries and high levels of trust and inter-firm commitment
a relationship that mixes elements of cooperation and competition between two partners
Bilateral monopoly
a channel structure whereby a single manufacturer supplies a single retailer, offering a single supply and demand point throughout the chain
Retailer monopoly
a channel structure whereby a single retailer uses multiple suppliers
Manufacturer monopoly
a channel structure whereby a single supplier provides products to multiple retailers
Channel power
the capacity of a particular marketing channel member to control or influence the behavior of other channel members
Channel control
a situation that occurs when one marketing channel member intentionally affects another member’s behavior
Channel captain
a member of a marketing channel that exercises authority and power over the activities of other channel members
Channel conflict
a clash of goals and methods between distribution channel members
Horizontal conflict
a channel conflict that occurs among channel members on the same level
Vertical conflict
a channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailer
secretive behavior that improves a firm’s standing at the expense of a partner firm
Active opportunism
when a firm violates agreements and restrictions, or forces another firm to renegotiate existing agreements when new circumstances arise
Passive opportunism
when a firm refuses to meet specific obligations or fails to change when new situations arise
the ability to conduct commerce using a mobile device for the purpose of buying or selling goods or services

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