Chapter 14: Marketing Channels and Supply Chain Management

Question 1

Marketing channel (channel of distribution)

Answer 1

A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.

Question 2

Channel members

Answer 2

All parties in the marketing channel that negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller as they move the product form the manufacturer into the hands of the final consumer.

Question 3

Supply chain

Answer 3

The connected chain of all the business entities, both internal and external to the company, that perform or support the marketing channel functions.

Question 4

Discrepancy of quantity

Answer 4

The difference between the amount of product produced and the amount an end-user wants to buy.

Question 5

Discrepancy of assortment

Answer 5

The lack of all the items a customer needs to receive full satisfaction from a product or products.

Question 6

Temporal discrepancy

Answer 6

A product is produced but a customer is not ready to buy it.

Question 7

Spatial discrepancy

Answer 7

The difference between the location of a producer and the location of widely scattered markets.

Question 8

Retailer

Answer 8

A channel intermediary that sells mainly to consumers and business customers.

Question 9

Direct channel

Answer 9

A distribution channel in which producers sell directly to consumers.

Question 10

Dual distribution (multiple distribution)

Answer 10

The use of two or more channels to distribute the same product to target markets.

Question 11

Strategic channel alliances

Answer 11

Cooperative agreements between business firms to use one of the manufacturer’s already established distribution channels.

Question 12

Intensive distribution

Answer 12

A form of distribution aimed at having a product available in every outlet where target customers might want to buy it.

Question 13

Coverage

Answer 13

Ensuring product availability in every outlet where potential customers might want to buy it.

Question 14

Selective distribution

Answer 14

A form of distribution achieved by screening dealers to eliminate all but a few in any single area.

Question 15

Exclusive distribution

Answer 15

A form of distribution that involves only one or a few dealers within a given area.

Question 16

Channel power

Answer 16

A marketing channel member’s capacity to control or influence the behaviour of other channel members.

Question 17

Channel control

Answer 17

One marketing channel member intentionally affects another member’s behaviour.

Question 18

Channel leader (channel captain)

Answer 18

A member of a marketing channel who exercises authority and power over the activities of other channel members.

Question 19

Channel conflict

Answer 19

A clash of goals and methods among distribution channel members.

Question 20

Horizontal conflict

Answer 20

A channel conflict that occurs among channel members on the same level.

Question 21

Vertical conflict

Answer 21

A channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailer.

Question 22

Channel partnering (channel cooperation)

Answer 22

The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage.

Question 23

Supply chain management

Answer 23

A management system that coordinates and integrates all the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.

Question 24

Logistics

Answer 24

The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption.

Question 25

Logistics information system

Answer 25

The link that connects all the logistics functions of the supply chain.

Question 26

Supply chain team

Answer 26

An entire group of individuals who orchestrate the movement of goods, services, and information from the source to the customer.

Question 27

Procurement

Answer 27

The process of buying goods and services for use in the operations of an organization.

Question 28

Mass customization (build-to-order)

Answer 28

A production method whereby products are not made until an order is placed by the customer; products are made according to customer specifications

Question 29

Just-in-time production (JIT)

Answer 29

A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line.

Question 30

Order processing system

Answer 30

A system whereby orders are entered into the supply chain and filled.

Question 31

Electronic data interchange (EDI)

Answer 31

Information technology that replaces the paper documents that usually accompany business transactions, such as purchase orders and invoices, with electronic transmission of the needed information to reduce inventory levels, improve cash flow, streamline operations, and increase the speed and accuracy of information transmission.

Question 32

Inventory control system

Answer 32

A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand.

Question 33

Channels for business and industrial products: Direct channels

Answer 33

Producer -> Industrial User or Producer -> Government buyer

Question 34

Channels for business and industrial products: Industrial Distributor

Answer 34

Producer -> Industrial Distributor -> Industrial User

Question 35

Channels for business and industrial products: Agent/Broker Channel

Answer 35

Producer -> Agents or Brokers -> Industrial User

Question 36

Channels for business and industrial products: Agent/Broker-Industrial Distributor

Answer 36

Producer -> Agents or Brokers -> Industrial Distributor-> Industrial User

Question 37

Channels for consumer products: Direct Channel

Answer 37

Producer -> Consumers

Question 38

Channels for consumer products: Retailer Channel

Answer 38

Producer -> Retailers -> Consumers

Question 39

Channels for consumer products: Wholesaler Channel

Answer 39

Producer -> Wholesalers -> Retailers -> Consumers

Question 40

Channels for consumer products: Agent/Broker Channel

Answer 40

Producer -> Agents/Brokers -> Wholesalers -> Retailers -> Consumers