Chapter 12 Vocab Flashcards
value delivery network
network composed of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value
marketing (distribution) channel
a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
key functions performed by marketing channel members (distributors) (8)
5 help to complete transactions
information - gathering & distribution to relevant parties
promotion - develop & spread persuasive communication
contact - find & communicate with buyers
matching - shape offers to meet buyer’s needs
negotiation - reach agreement on price, other terms
3 help fulfill completed transactions
physical distribution - transportation & storage
financing - covering costs of channel work
risk taking - assuming risk of carrying out channel work
channel level
a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
direct marketing channel
a marketing channel that has no intermediary levels
indirect marketing channel
a marketing channel containing one or more intermediary levels
types of flows in the marketing channel (5)
physical flow of products flow of ownership payment flow information flow promotion flow
channel conflict
disagreements among marketing channel members on goals, roles, and rewards (who should do what and for what rewards)
horizontal conflict
occurs among firms at the same level of the channel
vertical conflict
conflict between different levels of the same channel
more common than horizontal conflict
conventional distribution channels
a channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole
vertical marketing system
a channel structure in which producers, wholesalers, and retailers act as a unified system; one channel member owns the others, has contacts with them, or has so much power that they all cooperate
corporate VMS
a vertical marketing system that combines successive stages of production and distribution under single ownership; channel leadership is established through common ownership
contractual VMS
a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts
franchise organization
a contractual VMS in which a channel member, called a franchisor, links several stages in the production distribution process
3 types of franchises
manufacturer sponsored retailer franchise system
manufacturer sponsored wholesaler franchise system
service firm sponsored retailer franchise system
administered VMS
a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties
horizontal marketing system
a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
multichannel distribution systems
a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
disintermediation
the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
marketing channel design
designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives
intensive distribution
stocking the product in as many outlets as possible
exclusive distribution
giving a limited number of dealers the exclusive right to distribute the company’s products in their territories
selective distribution
the use of more than one but fewer than all of the intermediaries who are willing to carry the company’s products
