Channels, Supply Chains, and Retailing Flashcards
What are channels in the context of marketing
Chains of organizations concerned with moving goods from producers and manufacturers to end users. Like supply chains in third person
What types of intermediaries are there
agents, merchants, distributors, franchisers, wholesalers, and retailers
How do intermediaries create value
They reduce uncertainty and promote efficiency
Name the three main channel structures
Direct, indirect and multi channel
What is a direct channel structure
Selling direct to consumer
Explain an indirect channel structure
Selling to an intermediary like a swine farmer sells to a butchery that then sells to a retailer that in turn sells to the customers
Explain a multichannel structure
selling to both end users and intermediaries
What are the tradeoffs between direct and indirect channel structures
Direct trade control and share of end price for lesser coverage, the opposite is true for indirect.
What are the cons of a multichannel approach
Greater conflicts within the channels as intermediaries view you as a competitor
What should you think about when structuring marketing channels
What coverage is desired, what number and type of intermediaries should be involved and how the relationship with channel members should be managed
What are retailers
The final downstream component of a supply chain that sells directly to consumers
What risks do intermediaries alleviate
risk of storage, the risk of over and under production, the risk of changing suppliers, the risk of producing to late and to early, the risk of changing buyer behavior and of finance
What benefits do intermediaries provide outside risk reduction
Reducing complexity in supply chains, creating routines and standards as well as allowing businesses to specialize more (produce large quantities of a small number of products)
What does it mean that retailers offer a place, time, information and ownership utility
That they sell at a more convenient place than the place of production, they sell at times customers want to buy and present the end users with only the information they need
What are agents or brokers
Intermediaries that bring together sellers and buyers
Name some aspects of sorting and smoothing regarding intermediaries
Sorting out aka sorting products into different categories; Accumulation to provide more choices; Allocation or breaking bulk which means to divide bulk purchases into smaller sell-able batches; and Assorting aka assembling collections that are of value to consumers
what is a merchant
An agent that takes ownership of a product they intend to sell
What are distributors or dealers
They provide inventory sale, credit and after-sale services. They also sometimes trade directly with customers such as car distributors
What is a franchise
Owners of intellectual property of a standard that consumers know and trust
What are wholesalers
They stock goods and takes legal possession and title over the goods before they are sold to retailers “gross handel”
What are informaries
Information intermediaries such as google and price runner
How do you improve efficiency within the direct channel structure
By processing orders electronically and by supporting the physical delivery yourself
What is channel intensity or coverage
The number and dispersion of outlets an end user can use to buy an offering. Different stores/online maybe?
Explain intensive channel distribution
Place the offering in as many outlets as possible, popular for impulse goods, gives up a lot of control to the retailors who can put yours and the competitors yoghurt where thy want. Companies often start out intensive to create awareness.
