Ch 12- MKT Channels Flashcards
What are the essential functions that are performed by channel intermediaries?
Transactional, logistical, and facilitating
Can intermediaries in a channel of distribution be eliminated?
They can be eliminated, but not their function.
What is contact efficiency?
Reduction in # of contacts that happens when you introduce an intermediary in the mkt channel
What is a channel intermediary that sells mainly to consumers?
retailer
What is the function of an agent or broker? Do they take title to the goods?
to bring buyer and seller together
does not take title to the goods but gets commission
What kind of distribution channel do Government buyers mainly use to purchase?
Direct
Producers with widely dispersed markets use what kind of channels?
Long channel– one w many intermediaries.
Bc if customers are spread all over the country, you’re going to need a lot of intermediaries.
How are complex, customized, and expensive products usually distributed?
Direct sales force
What is a Vertical Marketing System (VMS)? What are the 3 types and how are their
members related to each other in each type?
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
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?
Channel leader
What has been the big change that supply chain management has brought to
traditional distribution functions?
It has become consumer driven
What is the main consideration in implementing the “total cost approach” to balance
logistics service and cost?
Quality of the service that you want to provide
What is the name of the production method whereby products are not made until an
order is placed by the customer?
Mass customization
parts are mass produced but final product is customized @ end once order is placed
What method simplifies manufacturing by reducing inventory levels and delivering
raw materials just when they are needed on the production line?
Just In Time
What is the basic assumption of JIT inventory management?
Just In Time
Carrying inventory is expensive
(ex: publix)
What are the three essential channel functions?
Transactional
Logistical
Facilitating
What are the 5 type of transportation methods
Air Truck Rail Pipe Water
What new information technology is improving order processing?
EDI
Electronic Data Interchange
(the digital exchange of data between organizations, which is transmitted primarily via the internet)
What transportation methods are highest in: Relative cost? Transit time? Reliability? Capability? Accessibility? Traceability?
Highest: Relative cost: Air Transit time: Water Reliability: Pipe Capability: Water Accessibility: Truck Traceability: Air
What is intermodal transportation?
combining 2+ methods of transportation to get the benefits of each one
ex: piggybacking
What is containerization?
shipping loose cargo inside sturdy metal containers
Vertical marketing systems
provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system.
Corporate mkt systems
where 1 corporation/ 1 of the members of mkt channel owns all of the other members of the mkt channel
Contractual vertical mkt system
members are related by contracts
ex: franchise system
Logistical functions include
Physical distribution
Storing
Sorting
Sorting (matching supplies w. assortment demanded) under logistical functions includes
- 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)
Administered vertical mkt
1 member has power to control the others aka channel leader
ex: walmart
What transportation methods are lowest in: Relative cost? Transit time? Reliability? Capability? Accessibility? Traceability?
Lowest in: Relative cost: Water Transit time: Air Reliability: Water Capability: Pipe Accessibility: Pipe Traceability: pipe
What do transactional function involve?
Contacting and promoting
Negotiating
Risk Taking
Risk taking under transactional functions of channels involves
Buying: purchasing a broad assortment of goods from producers or other channel members
Carrying inventory: Assuming the risks associated w. purchasing + holding an inventory
What is the importance of allocation
It is a type of sorting used for logistical functions
Breaking bulk
Allocation is how a distribution center works
