Chapter 10 Marketing Channels Flashcards
Marketing channel
interdependent firms making products available for businesses or consumers
leads to competitive advantage
agent or broker
any intermediary with legal authority to act on behalf of another channel member (e.g manufacturer)
wholesaler
intermediary who sells to other intermediaries, usually to retailers - this term usually applies to intermediaries who deal in consumer goods
retailer
an intermediary who directly sells to consumers
distributor
perform variety of functions, including selling, maintaining inventories, extending credit, etc.
dealer
a general term that can mean the same as a distributor, a retailer, or a wholesaler
how do intermediaries make the selling of goods and services more efficient?
minimize the points of contact for sales to reach a target market
eg) best buy
textbook: 3 basic functions of intermediaries
transactional function - the buying and selling, wholesalers purchase and carry risk as well
logistical function - storing, and moving the product itself
facilitating function - do the selling - ex) front person, gift cards
5 utilities of intermediaries that create value
form - appearance
time - access when you need it
place - where you want it
possession - providing various ways of purchasing the product
information - informing consumer
dual distribution
reaching different buyers by using at least two different channels
2 reasons for multi brand distribution strategy
minimize cannibalization
differentiate their channels
strategic alliances
one firms channel is used to sell another firm’s products
multichannel marketing
aka integrated communication and delivery channels
mutually reinforcing, retaining, and building relationships with custy
cross channel shopper
researches online and purchases at a retail store
- comparing among different retailers
- need for more information
- ease of comparing options
vertical marketing system
- a channel structure where producers, wholesalers, and retailers act as a unified system
- one channel member owns everyone and has contracts
2 kinds of vertical marketing system
corporate vertical
contracted vertical
corporate vertical system
a firm at one channel own s the firm at the next level or owns the whole channel
ie) forward integration
contracted vertical system
independent firms work together
3 kinds
wholesale sponsored
retailed sponsored coop
franchising
4 types of franchises
manufacturer sponsored retail franchise , eg) ford license
manufacturer sponsored wholesale, eg) pepsi
retail franchise systems, eg) mcdonalds
service franchise, eg) h&r block
market factors that affect channel choice
geographic concentration of the market
number of potential customers
type of market
order size
product factors of channel choice
technical factors
perishability
unit value
product life cycle
company factors of channel choice
financial resources and ability of management
desire for channel control
3 channel design considerations
- target market coverage - intensive, selective, exclusive
- satisfying buyer requirements - information, convenience, variety, and pre / post sale services
- profitability - distribution, advertising, and selling expenses
intensive distribution
placing products in as many outlets as possible
selective distribution
balance between exclusive and intensive - more geographic
two kinds of conflict in channels
vertical conflict (also disintermediation) and horizontal conflict
Logistics
getting the right products to the right place at the right time at the lowest possible price
supply chain
series of firms that perform activities to create and deliver a good or service to consumers or industrial users
supply chain management
integration and organization of information and logistics activities across firms in a supply chain through collaboration, coordination, and information sharing
4 key logistic functions
transportation (cost, time, capability, dependability, accessibility, frequency)
order processing (electronic data interchange)
inventory management (JIT)
warehousing (public or private, traditional, cross docking combination)
order processing, Electronic Data Interchange
computer to computer information exchange
Inventory management, JIT
just in time
deliver less merchandise more frequently, what’s delivered is used
complicated because frequency takes logistics
cross docking
use of a staging area in between storage and store
retail franchise systems
firms that have unique selling strategy
