Chapter 12: Marketing Channels: Delivering Customer Value

Question 1

What are marketing (Distribution) channels

Answer 1

They are interdependent organization that help make the product or service more available for use or consumption.

Question 2

What do upstream partners do

Answer 2

They supply raw material, components & parts needed to create a product or service.

Question 3

What do downstream partners do

Answer 3

Include marketing or distribution channels, including retailers, that look toward the customer.

Question 4

What is the supply chain

Answer 4

“Make and sell” view ; production focused approach
Includes everything a company needs to make products and prepare them for sale.

eg raw materials, productive inputs (tools, machinery, or energy) and factory capacity (how much a factory can produce within a specific period of time).

Question 5

What is the demand chain

Answer 5

“sense-and-respond view” = focuses on understanding customer needs (sensing) and quickly adapting to meet those needs (responding) by organizing a chain of resources and activities to create customer value.

Question 6

What is the value-delivery network made of

Answer 6

It is made up of the company, the suppliers, distributors, & ultimately the customers, who partner together to improve performance of the entire system.

Question 7

Can having a strong distribution system be a competitive advantage

Answer 7

yes

Question 8

What do channel decisions involve

Answer 8

They involve long term commitments to other firms.

Question 9

How do Intermediaries add value

Answer 9

They offer producers greater efficiency in making their goods more available to the target market.

• through their contacts, experience, scale of operations & specialization.
  Intermediaries can can achieve more than the firm can on its own.
• they transform the assortment made by the producers, organize it and redistribute it to meet customer needs.
  Eg break bulk
• plays a role in matching supply & demand

Question 10

What does break bulk mean

Answer 10

It refers to the process where intermediaries take large quantities of a product and break it down into smaller quantities that are more suited to customer needs.

Question 11

The greater the number if levels (intermediaries)

Answer 11

• the less control producers have (bcs each intermediary adds their own costs and influences the products distribution and prices)
• the more complex and costly the channel becomes
  -> bcs each level adds their own profit margins.

Question 12

What are the 2 types of marketing channels conflict

Answer 12

1. Horizontal conflict
2. Vertical conflict

Question 13

What is horizontal conflict

Answer 13

Conflict occurring among members if the same level (eg two retailers, etc).

Question 14

What is vertical conflict

Answer 14

Conflict occurring between different levels (eg manufacturer ca retailer)

Question 15

What are the types of channel systems

Answer 15

• conventional distribution systems
• vertixal marketing system (VMSs)
• horizontal marketing systems

Question 16

Whats a conventional distribution system

Answer 16

• independent producer, wholesaler and retailer - work separately to maximize profits.
• often leads to inefficiency and conflict as roles aren’t aligned

Question 17

What is Vertical Marketing Systems (VMSs)

Answer 17

Unified systems where producers, wholesalers and retailers act as a cohesive unit to avoid conflict and inefficiencies.