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Mktg Management > CH15: Distribution Channels > Flashcards

CH15: Distribution Channels Flashcards

1
Q

distribution channel

A

set of interdependent organizations (intermediaries) participating in the process of making a product or service available for use or consumption

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2
Q

main types of intermediaries

A
  • wholesalers
  • brokers
  • mfg. reps
  • agents
  • facilitators
  • transport/warehouse
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3
Q

the 7 main functions of the distribution channel

A
  • gather info about customers, competitors, mktg environment
  • develop comms to stimulate purchasing and brand loyalty
  • negotiate terms to facilitate the transfer of ownership or possession
  • place orders with manufacturers
  • financing activities
  • assume risks associated with channel work
  • oversee the actual transfer of ownership
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4
Q

the 3 common characteristics of dist channel functions

A
  • use up scarce resources
  • can often be performed better through specialization
  • can be shifted among channel members
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5
Q

types of flow between channel members

A
  • forward flow (goods, title, promotion)
  • backward flow (payment)
  • dual flow (info, negotiation, finance, risk)
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6
Q

the 3 levels of mktg channels

A
  • 0-level
  • 1-level
  • 2-level
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7
Q

benefits of multichannel distribution

A
  • increased market coverage
  • lower channel cost
  • customized selling options
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8
Q

drawbacks of multichannel distribution

A
  • potential for channel conflict
  • issues with control and cooperation
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9
Q

exclusive distribution

A

severely limits the number of channel partners; for when the producer wants to ensure more knowledgeable and dedicated efforts by the resellers

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10
Q

selective distribution

A

relies on some but not all of the intermediaries willing to carry a particular product; may include retailers that compete for the same customers

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11
Q

intensive distribution

A

places the goods/services in as many outlets as possible; works well for foods, soft drinks, etc.

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12
Q

the 3 main characteristics of franchising

A
  • the franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments
  • the franchisee pays for the right to be part of the system
  • the franchisor provides the franchisees with a system for doing business
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13
Q

the 3 main franchising formats

A
  • manufacturer-sponsored retail franchise (auto dealers)
  • manufacturer-sponsored wholesale franchise (Coca-Cola)
  • service-firm-sponsored retailer franchise (Hertz, Aviz, Howard Johnson)
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14
Q

channel power

A

the ability to alter channel members’ behavior so they take actions they would not have taken otherwise

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15
Q

the 5 types of channel power

A
  • coercive power
  • reward power
  • legal power
  • expert power
  • referent power
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16
Q

the 3 main types of conventional marketing channels

A
  • independent producer
  • wholesaler
  • retailer
17
Q

channel coordination

A

occurs when channel members are brought together to advance the goals of the channel instead of their own potentially incompatible goals

18
Q

vertical marketing system

A

the producer, wholesaler, and retailer are unified
- corporate (single ownership, e.g. Apple)
- administered (dominant brand secures cooperation from resellers
- contractual system

19
Q

the 3 types of a contractual vertical system

A
  • voluntary chains organized by wholesalers (e.g. IGA, NAPA)
  • retailer Co-ops
  • franchise
20
Q

horizontal marketing system

A

two or more unrelated companies combining resources to exploit a market opportunity; may result in a joint venture (e.g. Nike Ed. Apple Watch)

21
Q

the 5 main factors by which to evaluate intermediary performance

A
  • sales quota attainment
  • inventory levels
  • customer delivery time
  • treatment of damaged and lost goods
  • cooperation in promotional and training programs
22
Q

channel conflict

A

generated when one channel member’s actions prevent another channel member from achieving its goal (horizontal, vertical, multichannel)

23
Q

horizontal channel conflict

A

occurs between channel members at the same level

24
Q

vertical channel conflict

A

occurs between different levels of the channel

25
Q

multichannel conflict

A

exists when the manufacturer has established two or more channels that sell to the same market; likely to be intense when members of one channel get a lower price or work with a lower margin

26
Q

the 4 main causes of channel conflict

A
  • goal incompatibility (e.g. market penetration vs high margins)
  • differences in strategies and tactics
  • power imbalance
  • unclear roles and rights
27
Q

the 8 main ways to manage channel conflict

A
  • strategic justification
  • dual compensation
  • superordinate goals
  • employee exchange
  • joint membership
  • co-optation
  • diplomacy, mediation, arbitration
  • legal recourse
28
Q

the 2 main components of market logistics

A
  • planning the infrastructure to meet demand
  • implementing and controlling the physical flows of materials and final goods from points of origin to points of use
29
Q

the 3 main components of supply chain management

A
  • strategically procuring the right inputs
  • converting inputs efficiently into finished products
  • dispatching finished products to the final destinations
30
Q

the 4 main market logistics considerations

A
  • order processing
  • warehousing
  • inventory
  • transportation
31
Q

order-to-payment cycle

A

the time between an order’s receipt, delivery, and payment; most companies are trying to shorten this

32
Q

just-in-time inventory management

A

carrying near-zero inventory, and acquiring stock based on orders; customers pay in advance, and the company uses that money to pay suppliers

Mktg Management (21 decks)

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