Channels Flashcards
What is a marketing channel?
The route through which goods, services, information, and money flow as part of exchanges.
Why are marketing channels important?
They transform, distribute, and sort goods/services, making them available to consumers where and when needed.
What is a traditional marketing channel?
A linear system where goods flow down from producer to consumer, adding value at each step.
What role does a wholesaler play in a marketing channel?
Wholesalers add value by sorting, breaking down, and distributing large goods blocks in smaller packages.
What role does a retailer play in a marketing channel?
Retailers add value by sorting, holding, and presenting goods specifically for their consumer market.
What is the role of an agent in a marketing channel?
Agents act as brokers or facilitators, handling transactions without taking possession of goods.
What are the four flows that occur in a marketing channel?
Goods/services, payment, communication, and information.
How can marketing channels become complex?
They may involve thousands of participants at multiple levels and across multiple markets.
What is vertical integration in a marketing channel?
When a company extends its role in the channel, such as a retailer taking over wholesale roles.
What is the ‘sort’ function in a marketing channel?
The process of organizing goods based on end-use and the value required to meet consumer needs
Why is communication especially important in tourism channels?
It helps reach a global market, informing potential tourists of offerings before they arrive.
How does a traditional multi-pipeline system operate in a marketing channel?
Goods move down from manufacturers through wholesalers, breaking into smaller lots to serve retail markets efficiently, common in FMCG sectors.
What are inventory costs in traditional distribution systems?
Costs include holding goods that are unsold, plus losses from spoilage or becoming unsaleable, increasing total distribution expenses.
How do platform systems differ from traditional channels?
Platforms store goods near production, dispatch individually, and lower inventory costs despite higher dispatch expenses.
How are bank services distributed?
Banks shifted from branches to online/mobile services, lowering costs and improving access.
How do tourism channels attract visitors?
By creating foot traffic with attractions that prompt stops and increase engagement.
What are potential payment flow failures in channels?
Non-payment, delays, excessive retention of value, and risky long payment terms.
Why is export channel research vital?
Complex export markets, like China, need careful research to prevent distribution issues.
How does bargaining power affect value retention?
Powerful channels may keep too much value, harming suppliers; limit exposure to 20% per customer.
Why might exporters face partial payments?
Currency shifts reduce payment value, risking revenue in foreign markets.
How to prevent cash flow issues from late payments?
Limit extended terms; delayed payments add risk, especially if partners face financial issues.
What are the three broad groups through which market communications move?
1) Channels for goods and services,
2) Dedicated communications channels,
3) Non-dedicated channels (e.g., traditional and social media).
How can features of a product like a Samsung TV be communicated at the point of sale?
By activating the product (e.g., switching it on), allowing consumers to experience its features directly.
Why is delivering communications down the goods and services channel advantageous?
It is self-targeting, reaching consumers who are already interested in purchasing.
