Chapter 12: Marketing: PLACE Marketing channels: delivering customer value Flashcards
Supply Chain Partners
Upstream partners: are firms that supply raw materials,
components, parts, information, finances, and expertise
needed to create a product or service.
Downstream partners: include the marketing channels or
distribution channels that look toward the customer, including
retailers and wholesalers.
Value delivery network
Value delivery network is composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system
Marketing channel (distribution channel)
Marketing channel (distribution channel) is a set of
interdependent organizations that help make a product or
service available for use or consumption by the consumer or
business user.
Intermediaries offer producers greater efficiency in making
goods available to target markets. Through their contacts,
experience, specialization and scale of operations.
→ intermediaries usually offer the firm more than it can
achieve on its own
How Channel Members Add Value
- Transform the assortment of products into assortments
wanted by consumers. - Bridge the major time, place, and possession gaps that
separate goods and services from users.
Number of Channel Level
Channel level is a layer of intermediaries that performs
some work in bringing the product and its ownership closer
to the final buyer.
Direct marketing channel is a marketing channel that has
no intermediary levels.
Indirect marketing channel is a marketing channel
containing one or more intermediary levels
Marketing channels
Marketing channels consist of firms that have partnered for
their common good with each member playing a specialized
role in the sale of a good or service
Channel conflict
Channel conflict refers to disagreement among channel
members over goals, roles, and rewards.
* Horizontal conflict
* Vertical conflict
* Horizontal conflict → 2 outlets competing of the same
brand competing (Panos, Relay, Total, etc…)
* Vertical conflict → store war between manufacturer & retail
chain (e.g. Uniliver over listing fees with Delhaize)
Conventional distribution systems
Conventional distribution systems consist of one or more
independent producers, wholesalers, and retailers, each
separate business seeking to maximize its own profits,
perhaps even at the expense of profits for the system as a
whole.
Vertical marketing systems (V M Ss
Vertical marketing systems (V M Ss) provide channel
leadership and consist of producers, wholesalers, and
retailers acting as a unified system.
* Corporate marketing systems
* Contractual marketing systems
* Administered marketing systems
Corporate vertical marketing systems
Corporate vertical marketing systems combine
successive stages of production and distribution under single
ownership.
Contractual vertical marketing system
Contractual vertical marketing systems consist of
independent firms at different levels of production and
distribution who cooperate via contracts.
Franchise organization
Franchise organization is a contractual vertical marketing
system in which a channel member, called a franchisor, links
several stages in the production-distribution process.
administered vertical marketing system
An administered vertical marketing system is a V M S that
coordinates successive stages of production and distribution
through the size and power of one of the parties.
Multichannel distribution systems
Multichannel distribution systems are systems in which a
single firm sets up two or more marketing channels to reach
one or more customer segments
