Chapter 12. Marketing Channels Flashcards
Value Delivery Network
composed of the company, suppliers, distributors, and customers who partner with each other to improve the performance of delivering customer value.
Marketing Channel
a set of independent organizations that help make a product or service available for the market.
What is the difference between a direct and indirect Marketing Channel?
a direct channel has no intermediaries while and indirect channel has one or more intermediaries.
What is Channel Conflict?
disagreement among marketing channel members on goals, roles, and rewards.
Where does Horizontal and Vertical Channel Conflict occur?
Horizontal conflict occurs among firms at the same level of the channel.
Vertical conflict occurs between different levels (intermediaries) of the same channel.
Why are intermediaries present in Marketing Channels?
Efficiency (3+3 vs. 3x3) and Expertise (specialize in function)
Describe a Conventional Distribution Channel
consists of one or more independent organizations seeking to maximize their own profits, even to at the expense of the system as a whole.
Describe a Vertical Marketing System
a channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts, or has power to influence cooperation.
What is Corporate VMS?
Integrates successive stages of production and distribution under single ownership (ex. Ford)
What is Contractual VMS?
Independent firms at different levels of production and distribution that are joined by contracts (ex. Franchise Organization)
What is Administered VMS?
coordinates successive stages of production and distribution through the size and power of one of the channel members.
