CH. 10 - Channels of Distribution Flashcards
Consists of induividuals and firms involved in the process of making a product available for use or consumption by consumers or industrial users.
Marketing Channels
No intermediaries as the firm performs all channel functions.
ex: dollar shave club
Direct Channel
Have middlemen, any intermediaries that exist between manufacturers and end-user markets
Indirect Channels
intermediary with legal authority to act on behalf of the manufacturer
Agent or Broker
intermediary who sells to other intermediaries, usually to retailers
Wholesaler
intermediary who sells to consumers
Retailers
intermediaries who perform a varity of distribution functions
Distributor
mean the same as distributor, retailer, wholesale, etc
Dealer
buying: purchasing products for resale or as an agent for supply of a product
selling: contacting potential customers, promoting products, and seeking orders
risk taking: assuming business risks in the ownership of inventory that can become obsolete or deteriorate
Transactional Function
Assorting:
Storing:
Sorting:
Transporting:
Logistical Function
financing:
Facilitating Function
A. Producer — Consumer
B. Producer — Retailer — Consumer
C. Producer — Wholesaler — Retailer — Consumer
D. Producer — Agent — Wholesaler — Retailer — Consumer
Consumer Marketing Channels
- IBM — Industrial User
- Caterpillar — Industrial Distributor — Industrial User
Business Marketing Channels
Exists when one firm’s marketing channel is used to distribute another firm’s products.
ex: starbucks in targets and other stores
Strategic Marketing Alliance
A commerical enterprise undertaken jointly by two or more firms that retain their distinct identities for business expansion, development of new products, or moving into new markets.
Joint Ventures
Involves an arrangement whereby a firm reaches different buyers by employing two or more different channels for the same basic product.
Dual Distribution
Occurs when a set of companies are used to get products from the manufacturer to consumers.
EX: company that makes rubber who sells it to company that makes tires
Traditional Marketing Systems
Occurs when a company owns successive stages of production and distribution.
Vertical Marketing Systems
Occurs when a firm tries to place its products in as many outlets as possible.
Channel Structure
Intensive Distrubtion
Channel Structure
Occurs when one firm has the exclusive right to distribute another firm’s products.
Channel Structure
Exclusive Distrbution
Channel Structure
Occurs when a few select outlets carry another firm’s products.
Selective Distribution
Consists of the 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.
Logistics
Consists of a sequence of firms that perform activities required to create and deliver products to ultimate consumers or industrial users.
Supply Chain
Designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow (appropriate for functional products)
Walmart, HEB, and Target
Efficient Supply Chains
Focus on flexibility and responsiveness and are able to react quickly to changing market demand and requirements (approriate for innovative products)
Samsung, Tesla, and Apple
Responsive Supply Chain
Produces goods in advance of customer demand using a forecast of sales and moves through the supply chain to points of sale where they are stores as finished goods inventory.
supply chain design
Push System
supply chain design
Produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages.
supply chain design
Pull System
supply chain design
States that variation in orders/information increases upstream in the supply chain (i.e. towards the raw materials manufacturers)
Supply chain dynamics
Bullwhip Effect
Supply chain dynamics
States that the closer certain products are to the final customer, the faster the rate of technological change.
Clockspeed
Process: rate of change in process, either slow, rapid, or constant
Product: rate of change in product, soap vs. M.I.C.E (multimedia, information, communications, and electronics)
Organizational: considers the frequency of organizational restructuring.
Three measure of clockspeed
