Distribution Channels - Chapter 12 Flashcards
Distribution channel :
Transfers the ownership of goods and moves them from the pt of production to the pt of consumption, most often to retailers.
Distribution channels are part of the overall supply chain
When a firm is just starting out or entering new market, it doesn’t rlly have the option of having the “best” distribution channel structure.
Supply chain management :
Set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation
Logistics management :
Describes the integration of 2 or more activities to plan, implement, and control the efficient flow of raw materials, in-process inventory, and finished goods from the pt of origin to the pt of consumption.
What are the 2 developing distribution strategies a company can use?
- push marketing strategy
- pull marketing strategy
Push marketing strategy :
Increase demand by focusing on wholesalers, distributors or sales ppl, who push the product to consumers via distribution channels
Pull marketing strategy :
Designed to get consumers to pull the product into the supply chain by demanding that retailers carry it
Distribution intensity
Number of channel members to use at each level of the supply chain
Intensive distribution strategy :
Designed to get products into as many outlets as possible
Exclusive distribution :
Granting geographic territories to one or very few retail customers so no other retailers in the territory can sell a particular brand
Selective distribution :
Uses a few selected customers in a territory
Lies between the intensive and exclusive distribution strategies
Distribution centre :
Facility for the receipt, storage, and redistribution of goods to company stores or customers
Channel conflict :
Results when supply chain members are not in agreement act their goals, roles or rewards
Although conflict is likely to occur in any distribution channel, it is mitigated by the degree to which one channel member has power over another.
Corporate vertical marketing system :
Parent company has complete control and can dictate the priorities and objectives of the marketing channel bc it owns multiple segments of the channel, such as manufacturing plants, warehouse facilities, and retail outlets.
Contractual vertical marketing system :
Independent firms at diff levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict
Strategic relationship (partnering relationship) :
Supply chain relationship that the members r committed to maintaining long-term, investing in opportunities that are mutually beneficial; requires mutual trust, open communication, common goals, and credible commitments
What are the 5 flows from Customer to Distribution Centre?
Flow 1 (Customer to Store)
Flow 2 (Store to Buyer)
Flow 3 (Buyer to Manufacturer)
Flow 4 (Store to Manufacturer)
Flow 5 (Store to Distribution Centre)
Electronic data interchange (EDI) :
Computer-to-computer exchange of business doc from a retailer to a vendor and back
Advanced shipping notice :
Electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment.
Vendor managed inventory (VMI) :
Approach for improving marketing channel efficiency in which the manufacturer is responsible for maintaining the retailer’s inventory levels in each of its stores.
Mobile task management :
Tech that uses a wireless network and a mobile device that receives demand notification and enables a speedy response
Lead time :
The amt of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller’s store, ready for sale.
