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COMM 223 > chapter 11: marketing channels > Flashcards

chapter 11: marketing channels Flashcards

1
Q

what is the value delivery network?

A

made up of the company, suppliers, distributors, and ultimately customers

goal is to improve the performance of the entire system in delivering customer value

includes upstream and downstream relationships

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2
Q

upstream relationships

A

set of firms that supply the raw materials, components, part, information, finances, and expertise needed to create a product or service

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3
Q

downstream relationships

A

marketing/distribution channels that look toward the customers

(wholesalers and retailers)

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4
Q

Marketing channel (or Distribution channel)

A

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

they work as intermediaries

directly affect every other marketing decision

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5
Q

how do marketing channels influence the acquiring of a product?

A

it influences whether a company develops or acquires certain new products

may depend on how well those products fit the capabilities of its channel members

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6
Q

how do channels add value?

how can intermediaries offer the firm more than it can achieve on its own?

A

Through their contacts, experience, specialization, and scale of operation

Reduce the amount of work that must be done by both producers and consumers

Intermediaries also play an important role in supply and demand

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7
Q

how can intermediaries offer the firm more than it can achieve on its own?

A

Information gathering and distribution

Promotion at point of purchase

Contact

Matching and arranging

Negotiation

Physical distribution

Financing

Risk taking

After-sales support

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8
Q

why is Information gathering and distribution useful?

A

channel partners, such as retailers that are closer to the final customer, have access to information the manufacturer might not have

Channel partners can collect market intelligence and communicate it back to the original producer

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9
Q

what is the use of promotion at point of purchase?

A

locally advertised sales

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10
Q

how can marketing intermediaries increase contacts if you’re s supplier?

A

they can find new customers

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11
Q

what is the use of matching and arranging ?

A

channel partners often play a role in adapting the product to fit the buyer’s needs

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12
Q

what is the use of negotiation?

A

channel partners such as brokers negotiate price and terms so that the product can move from one channel member to another

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13
Q

give examples of financing?

A

companies that sell cars may have finance organizations, as well as companies
like Canadian Tire who offer store credit cards

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14
Q

what are channel partners

A

businesses that are owned and operated independently from the manufacturer

they are also contracted by the manufacturer to perform a specific function in the movement of the product

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15
Q

what are the types of channel partners

A

retailers

wholesalers

drop shippers and jack robbers

brokers

agents

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16
Q

retailers

A

a business that primarily sells products and services to consumers

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17
Q

wholesalers

A

companies whose primary business is selling goods and services to those buying for resale or business us

buy from producers and seek to retailers, business customers

Apple and Samsung are wholesa

lers

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18
Q

merchant wholesaler

A

who purchases the product then physically distributes it to consumers

like Costco

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19
Q

drop shipper

A

intermediary that takes orders and payment from the customer

arranges to have the merchandise shipped to the customer directly from the supplier

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20
Q

for what type of items is drop shipping usually used for?

A

usually for items that are not in stock

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21
Q

rack jobber

A

wholesaler that buys merchandise and resells it on “racks” inside the retail store (in partnership with retailer)

They retain ownership of the goods until they are sold, and once they are sold, the rack jobber bills the retailer for the items that were sold

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22
Q

brokers

A

wholesaler that does not take title to goods

function is to bring buyers and sellers together and assist in negotiation

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23
Q

agents

A

a representative who performs only a few functions and does not take title to goods

either of a buyer or a seller

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24
Q

Manufacturer’s agents

A

sells the manufacturer’s goods to buyers and receives a commission from the manufacturer

(usually small manufacturers that don’t have their own sales staff)

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25
Q

Advertising agencies

A

provide marketing communications services such as designing and producing advertisements

buying the media in which to run this ads

26
Q

what are the steps to organization and management of channels?

A
  1. select channel partners
  2. Decide how many channel levels to create
  3. Decide between vertical and horizontal marketing systems
  4. On an ongoing basis, manage and motivate channel partners and AVOID channel conflict
    occasionally: Changing Channel Organization
27
Q

step 1: Selecting channel partners

A

Marketers must evaluate each potential partners’ year in business, other lines carried, location, growth and profit record, cooperativeness, and reputation

they must see who be the gyuest

28
Q
  1. Decide how many channel levels to create

what is a channel level?

A

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

produces and find consumers are part of every channel

29
Q

what is the length of the channel?

A

number of channel members that function as

intermediaries between the producer and the consumer

30
Q

what is a direct marketing channel?

A

a marketing channel that has no intermediary levels

31
Q

what is an indirect marketing channel?

A

a marketing channel containing one or more intermediary levels

32
Q

companies use more indirect or direct marketing channel?

A

they use more the indirect marketing channels

Very few companies use a direct marketing channel

33
Q
  1. Deciding between vertical and horizontal marketing systems

what is a Vertical Marketing System (VMS)?

A

a distribution channel structure 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

34
Q

what are the types of Vertical Marketing Systems (VMS)?

A

Corporate VMS

Administered VMS

Contractual VMS

35
Q

Corporate VMS

A

combines successive stages of production and distribution under single ownership

channel leadership is established through common ownership

ex: Zara either owns or controls most of its distribution systems, from manufacturing through to retailing

36
Q

administered VMS

A

coordinates successive stages of production and distribution through the size and power of the parties

not through common ownership or contractual ties

Example: General Electric, P&G, and Kraft can command unusual cooperation from retailers regarding displays, shelf space, promotions and price policies

37
Q

Contractual VMS

A

independent firms at different levels of production and distribution work together under contract

The most common type of contractual VMS is the franchise organization

38
Q

franchise organization

A

a marketing system that links several stages in the production and distribution prices, and controls operations form a central head office

39
Q
  1. Deciding between vertical and horizontal marketing systems

what is a Horizontal Marketing System (VMS)?

A

an arrangement in which two or more companies that operate at the same channel level get together

goal is to follow a new marketing opportunity

might join forces with competitors or non competitors

Example: Tim Hortons set up express versions of its stores at Esso gas stations so that commuters can fill up and get coffee on the way to work without making 2 stops

40
Q
  1. Deciding between vertical and horizontal marketing systems

what is a Multichannel (Hybrid) Marketing System (VMS)?

A

a distribution system in which a single firm sets up two or more marketing channels to reach one or more target segments

Example: Zara sells its merchandise both online and through its traditional retail distribution channel

41
Q

what should you be cautious about regarding Multichannel (Hybrid) Marketing Systems (VMS)?

A

Can be hard to control and may create channel conflict

42
Q
  1. On an ongoing basis, managing and motivating channel partners and AVOIDING channel conflict

explain this step

A

companies use Partnership Relationship Management (PRM) software to help recruit, train, organize, motivate, and evaluate relationships with channel partners

43
Q

Channel Conflicts

A

disagreement among marketing channel members over goals, roles and rewards

44
Q

what are the types of channel conflicts

A

horizontal conflicts

vertical conflicts

45
Q

horizontal conflicts

A

occurs among firms that perform the same function at the same level of the channel

Example: Toyota Laval feels that Toyota Montreal is stealing business by pricing too low

46
Q

vertical conflicts

A

conflict between different levels of the same channel common

Example: KFC came into conflict with its franchisees over the brand’s decision to emphasize grilled chicken over the brand’s traditional fried chicken

47
Q

Changing Channel Organization

A

Disintermediation

48
Q

Disintermediation

A

the cutting out of marketing channel intermediaries by product or service producers

the displacement of traditional resellers by radical new types of intermediaries

49
Q

what are the different types of distribution strategies (channel strategies)

A

intensive distribution

selective distribution

exclusive distribution

50
Q

intensive distribution

A

distribute products in as many locations as possible.

not always the best strategy

51
Q

selective distribution

A

marketer selects a set of retailers that specialize in their product category

Example: Sony and Bose are high-quality brands that would only be found in high- end electronic retailers and not at discount retailers

52
Q

Exclusive Distribution

A

marketer gives the rights to distribute its products to only one retailer, or to only one retailer in a particular geographic territory

Usually associated with luxury brands such as Rolex and Tiffany

Example: The Cindy Crawford line in home furnishing is available exclusively at The Brick.

53
Q

what is marketing Chanel design?

A

designing effective marketing channels by analyzing customer needs

setting channel objectives

determining the types and responsibilities of channel members

making decisions about international distribution channels

54
Q

how does analyzing customer needs influence our Chanel design decision??

A

you want to find out what customers want from that channel

55
Q

how does setting channel objectives influence our channel design decisions?

A

the company should decide which segments to serve and the best channels to use in each case

Influences by nature of the company, its competitors, its environment, its marketing intermediaries, and its products

56
Q

how do types and responsibilities of channel members influence our channel design decisions?

A

Each channel alternative should be evaluated against economic, control, and adaptability criteria

57
Q

economic criteria of a channel

A

what will be investment required by each channel alternative, and what returns will result?

58
Q

control criteria of a channel

A

how much control will the intermediary take?

59
Q

adaptability criteria of a channel

A

will a channel involving long-term commitment be flexible?

60
Q

how do international distribution channels influence our channel design decisions?

A

each country has its own unique distribution system

international marketers usually adapt their channel strategies to the existing structures within each country instead of changing the channel

COMM 223 (13 decks)

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