Chapter 8 - Using Marketing Channels to Create Value for Customers Flashcards
What are ‘Channel Members’?
Firms a company partners with to actively promote and sell a product as it travels through its marketing channel to users are referred to by the firm
What are ‘Intermediaries’?
Organizations that products and services pass through before they getting to the consumer
What are the 4 forms of utility/value that channels offer?
- Time
- Form
- Place
- Ownership
What is ‘Supply Chain’?
All the organizations that figure into any part of the process of producing, promoting, and delivering an offering to its user
What is ‘Supply Chain Management’?
The process of firms constantly monitoring their supply chains and tinkering with them so they’re as efficient as possible
What are the types of channel partners?
- Wholesalers
- Retailers
What are ‘Wholesalers’?
They resell goods “whole” to other companies without transforming the goods
What are the 3 types of Wholesalers?
- Merchant Wholesalers
- Brokers
- Manufacturers Agents
What are some types of limited-service wholesalers?
- Cash-and-carry
- Drop shippers
- Mail-order
- Truck Jobbers
- Rack Jobbers
What type of wholesaler takes title to the goods?
Merchant Wholesalers
What type of wholesaler doesn’t take title to the products they sell?
Brokers
What do Brokers do?
Negotiates sales contracts for producers
What do Manufacturer Agents do?
Sell units that work directly for manufacturers
What are the types of retailers?
- Supermarkets
- Drugstores
- Convenience Stores
- Specialty Stores
- Department Stores
- Warehouse Clubs
- Off-price Retailers
- Outlet Stores
- Online Retailers
- Used Retailers
- Pop-up Store
- Non-store Retailing
What are ‘Category Killers’?
Companies that sell a high volume of a particular type of product and dominates the competitions (EX. Best Buy for the electronics market)
What are ‘Direct Marketing’?
Companies urge consumers to contact their firms directly to buy products
What is ‘Direct Channel’?
A channel consisting of just two parties—a producer and a consumer
What is ‘Indirect Channel’?
A channel that includes one or more intermediaries
What are ‘Industrial Distributors’?
Firms that supply products that businesses or government departments and agencies use but don’t resell
What is ‘Disintermediation’?
When you cut intermediaries out of the deal
What are the ways of entering foreign markets?
- Acquiring part or all of a foreign company
- Joint Ventures
- Export your products
- Franchising
What is a push strategy?
A manufacturer convinces wholesalers, distributors or retailers to sell its products
What is the problem with a push strategy?
It doesn’t focus on the needs of the actual users of the products
What is a pull strategy?
Focuses on creating demand for a product among consumers so that businesses agree to sell the product
What are the activities organizations in a marketing channel are responsible for?
- Disseminate Marketing Communications and Promote Brands
- Sorting and Regrouping Products
- Storing and Managing Inventory
- Distributing Products
- Assume Ownership Risk and Extend Credit
- Share Marketing and Other Information
What is a ‘free on board (FOB) provision’?
A provision that designates who is responsible for what shipping costs and who owns the title to the goods and when
What is a nondisclosure agreement (NDA)?
a contract that specifies what information is proprietary, or owned by the partner, and how, if at all, the partner can use that information
What are the factors that affect a firm’s channel decisions?
- Channel Selection Factors
- Type of Customer
- Type of Product
- Channel Partner Capabilities
- The Business Environment and Technology
- Competing Products’ Marketing Channels
What are the factors that Affect a Products Intensity of Distribution?
- Intensive Distribution Strategy
- Selective Distribution
- Exclusive Distribution
What is ‘Intensive Distribution Strategy’
Involves selling products in as many outlets as possible
What is ‘Selective Distribution’?
Involves selling products at select outlets in specific locations
What is ‘Exclusive Distribution’?
Involves selling products through one or very few outlets
What is a ‘Grey Market’?
A market in which a producer hasn’t authorized its products to be sold
What is ‘Channel Power’?
Ability of a particular channel member to control or influence the decision making and behavior of another channel member
What is ‘Channel Leaders’?
Strong channel partners
What is ‘Channe Conflict’
A dispute among channel members
What are ‘Store Brands’?
Products retailers produce themselves or pay manufacturers to produce for them
What is ‘Vertical Conflict’?
Conflict that occurs between two different types of members in a channel
What is ‘Horizontal Conflict’?
Conflict that occurs between organizations of the same type
What is ‘Dumping’?
The practice of selling a large quantity of goods at a price too low to be economically justifiable in another country
What is a ‘Vertical Marketing System’?
Channel members formally agree to closely cooperate with one another
What is a ‘Vertical Integration?
When one channel member takes over the functions of another member
What is a ‘Backward Integration?
When a company moves upstream in the supply chain
What is a ‘Horizontal Marketing System’?
Two companies at the same channel level agree to cooperate with another to sell their products or to make the most of their marketing opportunities
What is a ‘Conventional Marketing System’?
Channel members have no affiliation with one another
What is a ‘resale price maintenance agreement’?
An agreement whereby a producer of a product restricts the price a retailer can charge for it
