Chapter 11 Flashcards
What does upstream mean?
A set of firms that supply raw materials, components, parts, information, finances, and expertise needed to create a product or service
What does downstream mean?
Marketing channels that look toward the customer
What is a value delivery network?
Made up of a company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system
What does the term supply chain mean?
Suggests that raw materials, productive inputs, and factory capacity should serve as a starting point for marketing
What does the term demand chain mean?
Planning starts by identifying needs of target customers, to which a company responds by organizing a chain of resources and activities with the goal of creating customer value
What is a marketing channel?
A set of interdependent organizations that help make a product or service available for use or consumptions by a consumer or business customer
Why do producers use intermediaries?
They create greater efficiency in making goods available to target markets
What is the role of marketing intermediaries?
To transform assortments of products made by producers into assortments wanted by consumers
What are the specific functions channel partners can perform?
- Information gathering and distribution
- Promotion at point of purchase
- Contact
- Matching and arranging
- Negotiation
- Physical distribution
- Financing
- Risk taking
- After-sales support
What are channel partners?
Businesses that are owned and operated independently from a manufacturer and are contracted by a manufacturer to perform a specific function in the movement of a product
What is retailing?
A business of selling products and services directly to consumers for personal use
What is a retailer?
A business that primarily sells products and services to consumers
What is wholesaling?
All the activities involved in selling goods and services to those buying for resale or business use
What are wholesalers?
Companies that buy from producers and sell to retailers, business customers, and other wholesalers
What is drop shipping?
Refers to process in which intermediary takes an order from customer and passes it to the manufacturer or wholesalers, which then ships the item directly to the customer
What is a rack jobber?
Buys merchandise and then sets up “rack” displays inside retail stores, where merchandise is sold to customers
What is a broker?
A wholesaler that does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation
How do brokers differ from merchant wholesalers?
- Do not take title to goods
2. Perform only a few functions
What are agents?
A representative, either of a buyer or seller, who performs only a few functions and does not take title ti goods
What are two common types of agents?
Manufacturers’ agents and advertising agents
What is a channel level?
A layer of intermediaries performs some work in bringing a product and its ownership closer to the final buyer
What is a direct marketing channel?
A marketing channel that has no intermediary levels
What is indirect marketing channels?
When a business uses one or more intermediaries to reach final customers
What is a vertical marketing system?
A distribution channel structure in which producers, wholesalers, and retailers act as a unified system
What is corporate VMS?
A vertical marketing system, that combines successive stages of production and distribution under a single ownership
What is administered VMS?
Leadership is assumed not through common ownership or contractual ties, but through size and power of one or a few dominant channel members
What is contractual VMS?
Consists of independent firms at different levels of production and distribution that work together under contract
What is a franchise?
A retailer or service provider that operates under a license using another firm’s proven, successful business model
What is a franchisor?
A corporation that owns the rights to a brand and business model
What is a franchise organization?
A marketing system that links several stages in production and distribution process, and controls operations from central head office
What are the three types of franchises?
- Manufacturer-sponsored retailer franchise system
- Manufacturer-sponsored wholesaler franchise system
- Service-form sponsored retailer franchise system
What is a horizontal marketing system?
Two or more companies that operate at the same channel level join together to follow a new marketing opportunity
What is a multichannel or hybrid distribution system?
Occurs when a single firm sets up two or more marketing channels to reach one or more market segments
What is channel conflict?
Disagreements over goals, roles, and rewards among channel members
What is horizontal conflict?
Occurs among firms that perform the same function at the same level of channel
What is vertical conflict?
Occurs between different levels of the same channel and is more common
What is disintermediation?
Occurs when an established intermediary becomes unnecessary and is cut out of the channel
What is intensive distribution?
Marketers of everyday convenience products such as soft drinks and snack foods typically choose intensive distribution
What is selective distribution?
A marketer selects a set of retailers that specialize in product category
What is exclusive distribution?
A marketer gives the rights to distribute products to only one retailer, or to only one retailer in a particular geographic territory
What is a marketing channel design?
Calls for analyzing customer needs, setting channel objectives, determining types and responsibilities of channel members, and making decisions about international distribution channels
What is logistics management?
Requires planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit
What does logistics involve?
- Outbound distribution
- Moving products from a factory to resellers and ultimately to customers - Inbound distribution
- Moving products and materials from suppliers to a factory - Reverse distribution
- Moving broken, unwanted, or excess products returned by consumers or resellers
What is just-in-time logistics systems?
Producers and retailers carry only small inventories of parts or merchandise, often only enough for a few days of operations
What is RFID?
Tiny computer chips embedded in products or product containers that allow scanner to track movement without touching them
Explain trucks
Trucks are one of the oldest forms of transportation. They are highly flexibly in routing and time schedules, and can usually offer faster service than railroads
Explain railroads
Railroads are one of the most cost-effective modes for shipping large amounts of bulk products over long distances
Explain ships and barges
Used mainly for shipping goods across oceans
Explain pipelines
Specialized means of shipping petroleum, natural gas, and chemicals from sources to markets
Explain air carriers
Expensive and cost more than railroads or trucks. Only used when the speed of delivery is more important than cost
Explain the internet
Carries digital products from producer to customer via satellite, cable, phone wire, or wireless signal
What is multimodal transportation?
Combining two or more modes of transportation
What are third-party logistics providers?
Independent provider that performs any or all of the functions required to get its client’s product to the market
