Retailing Chapter 5: Managing the Supply Chain

Supply Chain
Set of institutions that move goods from the point of production to the point of consumption.
Used interchangeably with supply chain.
Primary Marketing Institutions
Channel members that take title to the goods as they move through the marketing channel. They include manufacturers, wholesalers, and retailers.
Facilitating Marketing Institutions
Do not actually take title but assist in the marketing process by specializing in the performance of certain marketing functions.
Public Warehouse
Facility that stores goods for safekeeping for any owner in return for a fee, usually based on space occupied.
Direct Supply Chain
Channel that results when a manufacturer sells its goods directly to the final consumer/end user.
Indirect Supply Chain
Channel that occurs when a manufacturer sells its goods through wholesalers and/or retailers.
Intensive Distribution
Means that all possible retailers are used in a trade area.
Selective Distribution
Means that a moderate number of retailers are used in a trade area.
Exclusive Distribution
Means only one retailer is used to cover a trading area.
Conventional Marketing Channel
Each channel member is loosely aligned with the others and takes a short term orientation.
Vertical Marketing Channels
Capital intensive networks of several levels that are professionally managed and centrally programmed to realize the technological, managerial, and promotional economies or a long term relationship orientation.
Quick Response (QR) Systems
Integrated information, production, and logistical systems that obtain real- time information on consumer actions by capturing sales data at point of purchase terminals and then transmitting this information back through the entire channel to enable efficient production and distribution scheduling.
Stock- Keeping Units (SKU)
Lowest level of identification of merchandise.
Corporate Vertical Marketing Channels
One channel institution owns multiple levels of distribution and typically consists of either a manufacturer that has integrated vertically forward to reach the consumer or retailer that has integrated vertically backward to create a self- supply network.
Contractual Vertical Marketing Channels
A contract governs the working relationship between channel members and include wholesaler sponsored voluntary groups, retailer owned cooperatives, and franchised retail programs.

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