Ch 12- MKT Channels

Question 1

What are the essential functions that are performed by channel intermediaries?

Answer 1

Transactional, logistical, and facilitating

Question 2

Can intermediaries in a channel of distribution be eliminated?

Answer 2

They can be eliminated, but not their function.

Question 3

What is contact efficiency?

Answer 3

Reduction in # of contacts that happens when you introduce an intermediary in the mkt channel

Question 4

What is a channel intermediary that sells mainly to consumers?

Answer 4

retailer

Question 5

What is the function of an agent or broker? Do they take title to the goods?

Answer 5

to bring buyer and seller together

does not take title to the goods but gets commission

Question 6

What kind of distribution channel do Government buyers mainly use to purchase?

Answer 6

Direct

Question 7

Producers with widely dispersed markets use what kind of channels?

Answer 7

Long channel– one w many intermediaries.

Bc if customers are spread all over the country, you’re going to need a lot of intermediaries.

Question 8

How are complex, customized, and expensive products usually distributed?

Answer 8

Direct sales force

Question 9

What is a Vertical Marketing System (VMS)? What are the 3 types and how are their
members related to each other in each type?

Answer 9

Problem w. mkt channel is everyone looks out for themselves. In hopes to promote unity,
VMS is a system where all the members of the mkt channel are integrated, working together
1. corporate
2. contractual
3. administered

Question 10

What is the name that is given to the member of a marketing channel that exercises
authority and power over the activities of the other channel members?

Answer 10

Channel leader

Question 11

What has been the big change that supply chain management has brought to
traditional distribution functions?

Answer 11

It has become consumer driven

Question 12

What is the main consideration in implementing the “total cost approach” to balance
logistics service and cost?

Answer 12

Quality of the service that you want to provide

Question 13

What is the name of the production method whereby products are not made until an
order is placed by the customer?

Answer 13

Mass customization

parts are mass produced but final product is customized @ end once order is placed

Question 14

What method simplifies manufacturing by reducing inventory levels and delivering
raw materials just when they are needed on the production line?

Answer 14

Just In Time

Question 15

What is the basic assumption of JIT inventory management?

Answer 15

Just In Time
Carrying inventory is expensive
(ex: publix)

Question 16

What are the three essential channel functions?

Answer 16

Transactional
Logistical
Facilitating

Question 17

What are the 5 type of transportation methods

Answer 17

Air
Truck
Rail
Pipe
Water

Question 18

What new information technology is improving order processing?

Answer 18

EDI
Electronic Data Interchange
(the digital exchange of data between organizations, which is transmitted primarily via the internet)

Question 19

What transportation methods are highest in: Relative cost? Transit time? Reliability? Capability? Accessibility? Traceability?

Answer 19

Highest:
Relative cost: Air
Transit time: Water
Reliability: Pipe
Capability: Water
Accessibility: Truck
Traceability: Air

Question 20

What is intermodal transportation?

Answer 20

combining 2+ methods of transportation to get the benefits of each one
ex: piggybacking

Question 21

What is containerization?

Answer 21

shipping loose cargo inside sturdy metal containers

Question 22

Vertical marketing systems

Answer 22

provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system.

Question 23

Corporate mkt systems

Answer 23

where 1 corporation/ 1 of the members of mkt channel owns all of the other members of the mkt channel

Question 24

Contractual vertical mkt system

Answer 24

members are related by contracts

ex: franchise system

Question 25

Logistical functions include

Answer 25

Physical distribution
Storing
Sorting

Question 26

Sorting (matching supplies w. assortment demanded) under logistical functions includes

Answer 26

• Sorting out: Classifying
  (heterogeneous supplies into relatively homogeneous groups. )

-Accumulation: Combining
(small groups of similar products into large groups of homogenous products. )

• Allocation: Breaking down
  (large, homogenous stocks into smaller groups)

Assorting: Combining products
(into collections or assortments that satisfy customer demand)

Question 27

Administered vertical mkt

Answer 27

1 member has power to control the others aka channel leader

ex: walmart

Question 28

What transportation methods are lowest in: Relative cost? Transit time? Reliability? Capability? Accessibility? Traceability?

Answer 28

Lowest in:
Relative cost: Water
Transit time: Air
Reliability: Water
Capability: Pipe
Accessibility: Pipe
Traceability: pipe

Question 29

What do transactional function involve?

Answer 29

Contacting and promoting
Negotiating
Risk Taking

Question 30

Risk taking under transactional functions of channels involves

Answer 30

Buying: purchasing a broad assortment of goods from producers or other channel members
Carrying inventory: Assuming the risks associated w. purchasing + holding an inventory

Question 31

What is the importance of allocation

Answer 31

It is a type of sorting used for logistical functions
Breaking bulk
Allocation is how a distribution center works