Chapter 11 Flashcards
Value Delivery Network
The network made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entires system in delivering customer value
Marking Channel
A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business customer
Retailing
Business of selling goods or services to consumers for their personal use
Wholesaling
All activities involved in selling goods and services to those buying for resale of business use
Drop Shippers
An intermediary who takes orders and payment from the customer, then arranges to have the merchandise shipped to the customer directly from the supplier
Rack Jobber
A wholesaler who buys merchandise and re-sells it on “racks” inside a retail store, in partnership with the retailer
Broker
A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation
Agents
A representative, either of a buyer or a seller who performs only a few functions and does not take title to the goods
Direct Channel
The producer sells directly to the customer
Indirect Marketing Channel
When there is one or more intermediary
Channel Conflict
Disagreement among marketing channel members over, goals, roles, and rewards
Disintermediation
The cutting out of marketing channel intermediates by product or service producers, or the displacement of traditional resellers by radical new types of intermediaries
Vertical Marketing System
A distribution channel in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate
Corporate Vertical Marketing System
A vertical marketing system that combines successive stages of production and distribution under single ownership, channel leadership is established through ownership
Administered VMS
A vertical marketing system that coordinates successive stages of production and distribution, not though common ownership or contractual ties, but through the size and power of parities
Contractual VMS
A vertical marketing system in which independent firms at different levels of production work together under contract
- Do this to achieve economies of scale, most common type is franchise
Franchise Organizations
Special type of Contractual VMS and is a retailer or service provider that operates under a license using another firms proven, successful business model
Horizontal Marketing System
An arrangement in which two or more companies that operate at the same channel level join together to follow a new marketing opportunity
Multichannel or Hybrid Distribution Systems
A single firm sets up two or more marketing channels to reach one or more market segments
Intensive Distribution
Marketing Strategy in which the product is stocked in as many outlets as possible
Selective Distribution
A distribution strategy in which market selects a set of retailers that specialize in their product category
Exclusive Distribution
A distribution strategy in which marketer gives the rights to distribute its products to only one retailer, or to only one retailer in a particular geographic territory
