Chapter 10

Question 1

What are upstream and downstream partners of the supply chains?

Answer 1

Upstream –> supply the raw materials, components, parts, information, finances, and expertise needed to creat a product or a servcie
Downstream –> serve as distribution channels that link the firm and its customers

Question 2

What is the value delivery network?

Answer 2

It is a network composed of the company, suppliers, distributors, and, ultimately, customers, who partner with each other to improve the performance of the entire system in delivering customer value

Question 3

What are Marketing channels (distribution channels)?

Answer 3

Independent organizations that help make a product or service available for use or consumption

Question 4

What do channel decisions do?

Answer 4

they affect every other marketing decision (price, product type)
They can lead to competitive advantage
They may involve long-term commitments to other firms (selling environment)

Question 5

How do channel members add value?

Answer 5

Intermediaries create greater efficiency in making goods available to target markets
Marketing intermediaries transform the assortments of products made by producers into assortments wanted by customers
Intermediaries bridge the major time, place, & possession gaps that separate goods and services from users

Question 6

what are the key functions performed by channel members?

Answer 6

Help to complete transactions
- information
- promotion
- contact
- matching
- negotiation

Help to fulfill the completed transactions
- physical distribution
- financing
- risk taking

Question 7

What are Distribution channels?

Answer 7

Complex behavioral systems in which ppl and companies interact to accomplish individual, company, and channel goals. They are not stationary: new types of channels systems and intermediaries are common

Question 8

What is a channel conflict?

Answer 8

Disagreements among marketing channel members on goals, roles, and rewards.
Some level of conflict is healthy because it will help the channel progress. If there is no conflict, it means that there is no innovation. However, several conflicts can damage the channel.

Question 9

What is a horizontal conflict?

Answer 9

conflict among firms at the same level of the channel ex: 2 ford dealers

Question 10

What is a vertical conflict?

Answer 10

conflict between different levels of the same channel (McDonalds vs franchises)

Question 11

What is a conventional distribution channel?

Answer 11

Consists of one or more independent producers, wholesalers, and retailers.
Channel level behaves as separate business seeking to maximize its own profits.
The channel level doesn’t have much control over the other members.

Question 12

What is a vertical marketing system?

Answer 12

Producers, wholesalers and retailers act as a unified system
One channel members own the others, has contracts with them or wields so much power they must cooperate.

Question 13

What is corporate VMS?

Answer 13

Integrating successive stages of production and distribution under single ownership
coordination & conflict management are attained through regular organizational channels

Question 14

What is contractual VMS?

Answer 14

consists of independent firms at different levels of production and distribution that join through contracts to obtain more economies or sales impact.
Channel members coordinate their activities and manage conflict through contractual agreements.

Question 15

What is a franchise organization?

Answer 15

The most common type of contractual VMS. A franchisor (channel member) links several stages in the production-distribution process.
Almost every kind of business has been franchised.

Question 16

What is administered VMS?

Answer 16

Leadership is assumed through the size and power of one or a few dominant channel member.

Question 17

What is a multichannel distribution system?

Answer 17

Occurs when a single firm sets up two or more channels to reach one or more customer segments.

Question 18

what are multichannel distribution systems advantages and disadvantages

Answer 18

Advantages:
Expansion of sales and marketing coverage
Tailor-made products and services for customer segments
Disadvantages:
Harder to control
Generates conflict

Question 19

What is the horizontal marketing system?

Answer 19

2 or more companies at one level join to follow a new marketing opportunity.
Combine financial, production, or marketing resources
join forces with competitors or noncompetitors
temporary or permanent basis
might create a separate company

Question 20

What is disintermediation?

Answer 20

Product or service producers cut out intermediaries and go directly to final buyers or new types of channel intermediaries displace traditional ones.

Question 21

How to counter the effects of disintermediation?

Answer 21

Product and service producers must develop new channel opportunities (internet, mobile, and other) but this can result in dealer conflict

Question 22

What is needed for effective marketing channel design?

Answer 22

Analyzing consumer needs
setting channel objectives
identifying major channel alternatives
evaluating alternatives

Question 23

Analyzing consumer needs

Answer 23

What do your target consumers want from the channel
Where are your consumers willing to go to buy your products?
Do they want to buy in person, by phone, or online?
Do they value breadth of assortment, or do they prefer specialization?
Do consumers want add-on services (delivery, installation, repairs), or will they obtain these services elsewhere?

Question 24

Setting channel objectives

Answer 24

Channel objectives are influenced by
the nature of the company, its products, its marketing intermediaries, its competitors, and the environment
Size & financial situation
Perishable products
Competition
Environmental factors

Question 25

Identify major channel alternatives –> types of intermediaries

Answer 25

types of intermediaries –> channel members available to carry out its channel work
reach more consumers and match competitors –> sells indirectly through retailers & value-added resellers
Having many types of resellers
- reach larger number and variety of buyers
- more difficult to manage and control
- direct and indirect channels compete with each other for many of the same customers

Question 26

Identify major channel alternatives –> number of intermediaries

Answer 26

Intensive distribution –> strategy in which they stock products in as many outlets as possible
producers of convenience products and common raw materials