Chap 14* Flashcards
What is distribution?
movement of goods and services from producers to customers.
Marketing (distribution) channel?
Network of individuals and organizations involved in getting a product or service from the producer to the customer.
- physical flow of goods and services from producer to customer
Logistics?
coordinating the flow of information, goods, and services among members of the distribution channel
Supply chain management?
control of the activities of purchasing, processing and delivery through which:
- raw materials are transformed into products and made available to final consumers
*4 Functions of marketing channels:
- Facilitating the exchange process by REDUCING the number of marketplace CONTACTS necessary to make sale.
* 2. Adjusting for discrepancies in the market’s assortment of goods and services via SORTING. - STANDARDIZING EXCHANGE transactions by setting expectations for the products
- payment terms, delivery, schedule, prices, etc - Facilitating searches by both buyers and sellers.
Marketing intermediary?
organization that operates between producers and consumers or business users.
“middle man”
Wholesaler?
Takes title to the goods it handles and distributes these goods to:
Retailers
Other distributors
End consumers
Short marketing channel?
Business products
Service firms - sell intangible products and need to maintain personal relationships within their channels
Not-for-Profit organizations
Direct channel
moves goods directly from producer to the business purchaser or ultimate user
Internet and direct mail are important tools for what?
direct selling
*What is the traditional channel for consumer goods?
producer > wholesaler > retailer > consumer
What does an agent do?
brings buyer and seller together
may or may not take possession of goods but does NOT take title
Manufacturers’ representative?
Agent wholesaling intermediary who represents manufacturers of related but noncompeting products and receives a commission on each sale
Dual distribution?
movement of products through more than one channel to reach the firm’s target market
Reverse channels?
- channels designed to return goods to their producers
(recycling, prices are rising for raw materials so recycling is more popular, batteries, tires) - used for recalls and repairs
Table 14.1
. . .
Number of _______ determines distribution intensity.
intermediaries
Intensive Distribution?
through all available channels
Selective Distribution?
through a limited number of channels
Exclusive Distribution?
a single wholesaler or retailer
3 Keys to successful management of channel relationships?
Coordination
Commitment
Trust between channel members
Channel captain?
dominant and controlling member of a marketing channel
Horizontal channel conflict?
disagreements among channel members at the same level. producer vs producer. retailer vs. retailer
Vertical channel conflict?
occurs among members at different levels of the channel
What is the gray market?
gray goods: products manufactured abroad under license from a US firm and then sold in the US market in competing against firms own output
- different agent selling JCrew at outlet prices
Forward integration?
firm attempts to control downstream distribution
manufacturer set up retail chain
Backward integration?
manufacturer attempts to gain greater control over inputs to production process
*Which of the following is true of the role of distribution channels in a firms’ marketing strategy?
They standardize exchange transactions by setting expectations for products including the transfer process it self
*Which of the following categories of organizations is most likely to have the longest distribution channel?
Firms producing nonperishable consumer goods
*Which of the following is a marketing intermediary who may or may not take possession of the goods but never takes title?
Agent
