Ch. 14 - Channel Relationships and Supply Chains

Question 1

What are primary channel participants?

Answer 1

Intermediaries such as wholesalers, distributors, retailers, a argents and brokers are part of the proactive marketing design of the channel.

Question 2

What are ancillary channel managers

Answer 2

those business and service providers whose efforts have been traditionally viewed as somewhat generic but without which the channel could not work. (logistics, storage…)

Question 3

What are the two dimensions of Channel relationships and supply chains?

Answer 3

1. must be deigned to accomplish marketing objectives

2. the channel must be managed to achieve these objectives

Question 4

What is a channel of distribution?

Answer 4

the link between manufacturers and customers

Question 5

What are the four parts of economic utility? How do they apply to marketing channels?

Answer 5

• form: usable quantity/mode
• Time: when the customer needs
• place: where the customer needs it/ locational convenience
• possession: ownership or right to use

Question 6

describe vertical integration

Answer 6

vertical integration: the degree of ownership a firm has of its marketing channel

Question 7

What are the advantages and disadvantages of vertical integration?

Answer 7

Advantages:
- economies of scale
- complete control
- reliability and availability
Disadvantages:
- lack of flexibility
- significant investment
- slow to innovate

Question 8

What is a functional spinoff?

Answer 8

• alternative to vertical integration

- ancillary services are provided most efficiently by experts in each service

Question 9

describe value networks and the three ways that it is better than vertical integration

Answer 9

Value networks create a lot of the advantages without the disadvantages associated with vertical integration.

• greater flexibility
• lower initial investment
• fast response to market

Question 10

What is supply chain management?

Answer 10

supply chain management is the creation of value for customers through effective and efficient flow of materials, components, finished goods, and services (from raw materials to end consumers)

Question 11

what is business logistics?

Answer 11

the management of movement, sorting, and storage of goods – an important tactical function prospecting

Question 12

Describe the physical distribution concept

Answer 12

a system design aimed at minimizing costs while maintaining a given level of customer service through the simultaneous management of three elements:

• inventory management
• transportation
• warehousing

Question 13

What are multi-channel distribution systems?

Answer 13

A single firm sets up two or more marketing channels to reach one or more customer segments

Question 14

True or False: Customers within a segment with similar needs will expect locational convenience

Answer 14

true

Question 15

List 5 potential actions for supply chain disruptions (such as a major natural disaster)

Answer 15

• analyzing monitor risk exposure
• diversify supply resources
• reevaluate ‘make versus buy’ decisions
• build stronger supplier relationships
• perform regular ‘stress tests’ of the supply chain

Question 16

List the channel relationships and supply chains in order of dependence on supplier/relationships (from low level of centralized control to high-level of centralized control)

Answer 16

1. Value networks
2. Horizontal sprawl
3. Conventional systems
4. Administered systems
5. Contractual systems
6. Corporate vertical marketing system