MKT Ch. 15

question

marketing channel
answer

individuals and firms involved in process of making product/service available for use or consumption by consumers or industrial users
question

intermediaries
answer

value is created by _____. make possible flow of products from producers to ultimate consumers by performing 3 basic functions. transactional function, logistical function, facilitating function.
question

transactional function
answer

buy and sell products/services.
question

logistical function
answer

gathering, sorting and dispersing products
question

facilitating function
answer

make transaction easier for buyers. Ex. issuing credit cards like JCPenny.
question

consumer benefits from intermediaries
answer

having products/services you want when you want them where and in what form you want them. uses these 4 utilities: time utility, place utility, form utility, possession utility.
question

time utility
answer

having product/service when you want it
question

place utility
answer

having product/service where consumers want it
question

form utility
answer

enhancing product to make more appealing to buyers
question

possession utility
answer

intermediaries help buyers take possession of product.
question

direct channel (customer)
answer

producer and ultimate consumer deal directly with each other Ex. insurance company. producer performs all channel functions.
question

indirect channels (customer)
answer

intermediaries inserted between producer and consumers and perform numerous channel functions.
question

retailer added
answer

most common when retailers is large and can buy in large quantities from producer or when cost of inventory makes it too expensive to use wholesaler. Ex. automobile manuf.
question

Adding wholesaler
answer

most common for low cost, low unit value items frequently purchased. (candy)
question

most indirect channel
answer

many small manufacturers and many small retailers
question

direct channel (business)
answer

maintain own salesforce and perform all channel functions. employed when buyers are large and well defined. requires extensive negotiations. requires hands on expertise. Ex. IBM
question

Indirect channel (business)
answer

1+ intermediaries between producer and industrial user.
question

industrial distributor
answer

marketing channel functions – selling, stocking, delivering full product assortment, and financing.
question

second intermediary
answer

agent – serves primarily as independent selling arm of producers and represents producer to industrial users.
question

longest channel
answer

includes both agents and industrial distributors.
question

electronic marketing channels
answer

employ internet to make products/services available for consumption or use by consumers or organizational buyers.
question

direct marketing channels
answer

allow consumers to buy products by interacting with various advertising media without face-to-face meeting with sales person
question

multichannel marketing
answer

blending of different communication and delivery channels mutually reinforcing in: attracting, retaining and building relationships with consumers who shop and buy in traditional intermediaries and online.
question

dual distribution
answer

firm reaches different buyers by employing 2+ different types of channels for same basic product
question

strategic channel alliances
answer

one firm’s marketing channel used to sell another firm’s products. popular in global marketing.
question

vertical marketing systems
answer

professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact 3 types: corporate, contractual, admistered
question

corporate vertical marketing system
answer

combo of successive stages of production and distribution under single ownership.
question

forward intergration
answer

producer might own intermediary at next level down in channel
question

backward integration
answer

retailer might own manufacturing operation
question

contractual vertical marketing system
answer

independent production and distribution firms integrate efforts on contractual basis to obtain greater functional economies and marketing impact than could achieve alone.
question

wholesaler-sponsored voluntary chains
answer

wholesaler develops contractual relationship with small, independent retailers to standardize and coordinate buying practices, merchandising programs and inventory management efforts.
question

retailer sponsored cooperatives
answer

small, independent retailers form organization that operates wholesale facility cooperatively.
question

franchising
answer

contractual arrangement between parent company (franchisor) and individual or firm (franchisee) that allow franchisee to operate certain type of business under established name and according to specific rule.
question

manufacturer sponsored retail franchise systems
answer

manufacturer licenses dealers to sell products subject to various ales and service conditions. EX. automobile industry
question

manufacturer sponsored wholesale franchise systems
answer

licenses whole salers to distribute his products to retailers. Ex. soft drink industry
question

service sponsored retail franchise systems
answer

firms that have designed unique approach for performing service and wish to profit by selling franchise to others.
question

service sponsored franchise systems
answer

franchisors license individuals or firms to dispense service under trade name and specific guidelines.
question

administered vertical marketing systems
answer

achieve coordination at successive stages or production and distribution by size and influence of one channel member rather than through ownership
question

Question when choosing marketing channel and intermediaries
answer

-Which channel and intermediaries will provide best coverage of target market? -Which channel and intermediaries will best satisfy buying requirements of target market? -Which channel and intermediaries will be most profitable?
question

density
answer

number of stores in geographical area; and type of intermediaries to be used at retail level of distribution
question

intensive distribution
answer

firm tries to place its products and services in as many outlets as possible
question

exclusive distribution
answer

extreme opposite of intensive dist. because only one retailer in specified geographical area carries firm’s products
question

selective distribution
answer

lies between these 2 extremes; firm selects few retailers in specific geographical areas to carry its products.
question

categories of buyer requirements
answer

information, convenience, variety, pre- or post- sale services
question

information
answer

one of buyer requirements – – in store displays, demonstrations and personal selling
question

convenience
answer

one of buyer requirements – – multiple meanins – proximity, driving to retail outlet, minimum of time and hassle
question

variety
answer

one of buyer requirements – – buyers interest in having numerous competing and complementary items from which to chose.
question

pre or post sale services
answer

one of buyer requirements – – require delivery, installation and credit
question

profitability
answer

determined by margins earned for each channel member and for channel as whole
question

channel conflict
answer

one channel member believes another channel member engaged in behavior that prevents it from achieving its goals. 2 types- horizontal, vertical
question

vertical conflict
answer

between different levels in marketing channel
question

disintermediation
answer

channel member bypasses another member and sells or buys product direct
question

horizontal conflict
answer

between intermediaries at same level in marketing channel Ex.between 2 or more retailers, or 2 or more wholesalers that carry same brand
question

channel captain
answer

channel member that coordinates, directs and supports other channel member
question

economic influence
answer

ability of firm to reward other members given strong financial position or customer franchise
question

dual distribution
answer

not illegal, viewed as anti competitive in some situations.
question

exclusive dealing
answer

supplier requires channel member to sell only its products or restricts distributors from selling directly competitive products.
question

tying arrangements
answer

supplier requires distributor purchasing some products to buy others from supplier
question

full time forcing
answer

special kind of tying arrangement. supplier requiring channel member carry its full line of products in order sell specific item in supplier’s line.
question

refusal to deal
answer

with existing channel members may be illegal
question

resale restrictions
answer

suppliers attempt to stipulate to whom distributors may resell suppliers products and in what specific geographical are or territories they may be sold.
question

clayton act
answer

specifically prohibits exclusive dealing and tying arrangements when lessen competition or create monopolies
question

logistics
answer

activities that focus on getting right amount of right products to right place at right time at lowest possible cost.
question

logistics management
answer

the practice of organizing the cost effective flow of raw materials, in process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.
question

collaboration, coordination, and info sharing
answer

what is necessary to create a seamless flow of products to customers?
question

supply chain
answer

various firms involved in performing activities required to create and deliver product to consumers or industrial users
question

supply chain management
answer

integration and organization of information and logistics activities across firms in supply chain for purpose of creating and delivering products and services that provide value to consumers
question

3 steps of aligning supply chain with marketing strategy
answer

-understanding the customer -understanding the supply chain -harmonizing supply chain with marketing strategy
question

total logistics cost
answer

expenses associated with transportation materials handling and warehousing, inventory stockouts (being out of inventory), order processing and return products handling
question

output
answer

service delivered to customers
question

customer service
answer

ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience
question

time
answer

order cycle or replenishment time for item
question

communication
answer

2 way link between buyer and seller that helps in monitoring service and anticipating future needs
question

vendor-managed inventory (VMI)
answer

supplier determines product amount and assortment customer (retailer) needs and automatically delivers appropriate items
question

reverse logistics
answer

process of reclaiming recyclable and reusable materials, returns and reworks from point of consumption or use for repair, remanufacturing, redistribution or disposal
question

Amazon
answer

pioneer of fast, convenient, low-cost virtual shopping attracted millions of consumers.

Get instant access to
all materials

Become a Member