Chapter 10

Question 1

Supply chains

Answer 1

Upstream partners- supply raw materials, components, parts, info, finances, and expertise needed to create a product or service

Downstream partners- Steve as distribution channels that link the firm and customers

Question 2

Marketing channel or distribution

Answer 2

Set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user

Question 3

Channel decisions

Answer 3

• affects every other marketing decision
• can lead to competitive advantage
• may involve long term commitments to other firms

Question 4

Intermediaries/distributors

Answer 4

Can reduce the anon tic work done by both producer and consumers, less contacts needed

Question 5

Why use intermediaries?

Answer 5

They create greater efficiency in making goods available to target markets. Marketing intermediaries transform the assortments of products made by producers into the assortments wanted by consumers.
Channel meme era add value by bridging the major time, place, and possession gaps that separate goods and services from those who use them.

Question 6

Key functions performed by channel members

Answer 6

Gather and distribute information.
Develop and spread persuasive communications about an offer.
Find and engage customers and prospective buyers.
Shaping offers to meet the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging.
Negotiation- Reaching an agreement on price and other terms so that ownership or possession can be transferred.

To help fulfill complete transactions
Physical distribution- Transporting and storing goods
Financing- Acquiring and using funds to cover the costs of the channel work.
Assuming risks of carrying out the channel work.

Question 7

Channel level

Answer 7

A layer of intermediaries that performs work in bringing the product and its ownership closer to the final buyer

Question 8

Direct marketing channels

Answer 8

No intermediary levels

Question 9

Indirect marketing channels

Answer 9

One or more intermediary levels

Question 10

Types of flows that connect the institutions in the channel

Answer 10

Physical flow of products 
Flow of ownership 
Payment flow
Information flow 
Promotion flow

Question 11

Channel conflict

Answer 11

Disagreements among marketing channel members on goals, roles, and rewards

Question 12

Horizontal conflict

Answer 12

Occurs among firms at the same level of the channel

Question 13

Vertical conflict

Answer 13

Occurs between different levels of the same channel

Question 14

Conventional distribution channel

Answer 14

Consists of one or more independent producers, wholesalers, and retailers. Each is a separate business seeking to maximize its own profits. No channel member has much control over the others and no formal means exists for assigning roles and resolving channel conflict

Question 15

Vertical marketing system (VMS)

Answer 15

Consists of producers, wholesalers, and retailers acting as a unified system. One channel member owns the other, has contracts with them, or worlds so much power that they just all cooperate.

Three types:

• corporate
• contractual
• administered

Question 16

Corporate VMS

Answer 16

Combines successive stages of production and distribution under single ownership

Question 17

Contractual VMS

Answer 17

Consists of independent firms at differ levels of production and distribution that join together through contracts

Question 18

Administered VMS

Answer 18

Coordinates successive stages of production and distribution through the size and power of one of the parties

Question 19

Horizontal marketing system

Answer 19

Town or more companies at one level join together to follow a new marketing opportunity

Question 20

Multi channel distribution system

Answer 20

Refers to a single firm that sets up toe or more marketing channels to reach one or more customer segments

Question 21

Disintermediation

Answer 21

Occurs when product or service producers cut out marketing channel intermediaries or when radically new types of channel intermediaries displace traditional ones

Question 22

Marketing channel design

Answer 22

Involves designing effective marketing channels by:

1. Analyzing customer needs
2. Setting channel objectives
3. Identifying major channel alternatives
4. Evaluating the alternatives

Question 23

Major channel alternatives

Answer 23

Types of intermediaries refers to channel members available to carry out channel work

Question 24

Number of intermediaries used at each level (three strategies)

Answer 24

Intensive distribution- producers of convenience products and common raw materials; stick their products in as many outlets as possible

Exclusive distribution- limited the number of intermediaries; producer gives only a limited number of dealers the exclusive right to distribute its products in their territories

Selective distribution- intensive and exclusive distribution; use of more than one but fewer than all fo the intermediaries who are willing to carry a company’s products

The responsibilities of each channel member must be determined.

Question 25

Marketing channel management

Answer 25

Calls for selecting, managing, and motivating individual channel members and evaluating their performance over time