Chapter 3 The Environment of Marketing Channels Flashcards
What are the 5 environments of marketing channels?
- Economic environment
- Competitive environment
- Sociocultural environment
- Technological environment
- Legal environment
The most obvious and pervasive category of environmental variables affecting all members of the marketing channel?
- The Economic Environment
Is two consecutive quarters of decline in the Gross Domestic Product (GDP)
- Recession
Any period in which the GDP is stagnant or increasing very slowly?
- Recessionary
Economic environment variables?
- Recession
- Inflation
- Deflation
Is the market space within which companies compete against each other to gain market share?
- Competitive Environment
4 Types Of Competition?
- Horizontal Competition - Same types of firms at the same channel level
- Intertype Competition - Different types of firms at the same channel level
- Vertical Competition - Channel members at different levels in the channel
- Channel System Competition - Compete w/ each other as units
Channels competing as a single or complete Units. Such channels have been referred to as vertical marketing systems and are classified into three types?
- Corporate - production and marketing facilities are owned by the same company
- Contractual - independent channel members (producers or manufacturers, wholesalers, and retailers) are linked by a formal
contractual agreement - Administered - result from strong domination by one of the channel members, frequently a manufacturer, over the other members.
Pervades virtually all aspects of a society?
- SocioCultural Environment
Most of the very small retail intermediaries, often referred to as?
- mammy traders
This term is most commonly used to describe the interconnectedness and interdependencies of countries around the world?
- Globalization
This ability to constantly be on the move while still being able to stay in constant contact has not been lost on consumers.
- Mobility and Connectedness
This term refers to interaction in networks comprised of individuals or organizations that are linked together based on some type of common interest, such as friendship, beliefs, hobbies, professional pursuits, special knowledge and many others.
- Social Networking
Technology is the most continuously and rapidly changing aspect of the environment?
- Technological Environment
Refers to the linking together of channel member Information systems to provide real-time responses to communication between channel members?
- Electronic Data Interchange
This is a relatively new technology that uses a device called an RFID tag attached to a person or object, such as a product, that enables that person or product to be identified and tracked using radio waves?
- Radio frequency identification
Internet-based technology that enables both large and small businesses and organizations to utilize highly sophisticated computer applications without
having to have their own hardware, software, office computing space and staff?
- Cloud computing
Refers to the set of laws that impact marketing channels. The legal structure resulting from these laws is not a static code.
- Legal Environment
Passed in 1890, is the fundamental antimonopoly law of the United States. The philosophy underlying this piece of legislation is that public welfare is served best through competition?
- The Sherman Anti-trust Act
Supplements the Sherman Act by specifically prohibiting such practices as price discrimination, tying clauses, exclusive dealing, intercorporate stockholding and interlocking corporate directories among competing firms?
- The Clayton Act
Was granted the power to investigate and enforce, through the use of injunctions, unfair methods of competition in interstate commerce?
- Federal Trade Commission Act (FTC)
Was aimed at prohibiting a variety of forms of price discrimination that tended to lessen competition but which was inadequately covered by the Clayton Act?
- Robinson-Patman Act
Was an amendment to Section 7 of the clayton Antitrust Act, which prohibited acquisitions or mergers that tended to lessen competition or create monopolies?
- Celler-Kefauver Act
Refers to the practice whereby a producer or manufacturer uses two or more different channel structures for distributing the same product to his target market?
- Dual Distribution
When a supplier requires its channel members to sell only its products or to refrain from selling products from directly competitive suppliers?
- Exclusive Dealing
If a supplier requires channel members to carry a broad group of products (full line) in order to sell any particular products in the supplier’s line?
- Full-Line Forcing
Which is covered specifically under the Robinson-Patman Act, refers to the practice whereby a supplier, either directly or indirectly, sells at different prices to the same class of channel members to the extent that such price differentials tend to lessen competition?
- Price Discrimination
A supplier’s attempt to control the prices charged by its channel members for the supplier’s products?
- Price maintenance or Fair Trade
In general suppliers may select whomever they want as channel members and refuse to deal with whomever they want. This right is based on the precedent established in a classic Supreme Court Case of 1919 (United States v. Colgate and Company) and is often referred to as the “Colgate doctrine.”?
- Refusal to Deal
When a manufacturer attempts to stipulate to whom channel members may resell the manufacturer’s products and in what specific geographical market areas they may be sold?
- Resale restrictions
Agreements whereby a supplier sells a product to a channel member on condition that the channel member also purchase another product as well or at least agrees not to purchase that product from any other supplier?
- Tying Agreements
Firms that own and operates organizations at other levels of the distribution channel (for example, a manufacturer owning and operating its own wholesaling facilities and retail stores)?
- Vertical Integration
