Exam 3 Flash Cards
What are the channel activities?
Marketing information, marketing management, facilitating exchanges, activities done by wholesaler, price, promotion, and physical distribution
How do you calculate contractual efficiency?
Without a wholesaler, you multiply the number of producers by the number of retailers to get the number of contracts. With a wholesaler, you add the number of producers to the number of retailers to get the number of contracts.
What are the types of channels?
Direct channel and indirect channel; indirect channel can be one level, two levels, or three levels
Direct Channel
Producer directly to consumer
One Level Indirect Channel
Prouder to retailer to consumer
Two Levels Indirect Channel
Producer to wholesaler to retailer to consumer
Three Levels Indirect Channel
Producer to agent/broker to wholesaler to retailer to consumer
Dual Distribution
The use of two or more marketing channels to distribute the same products to the same target market
Corporate VMS
Combines all stages of marketing channel under a single owner, maintains advantage through speed and lower prices
Administered VMS
All channel members are independent and one member coordinates all members
Contractual VMS
Channel members are linked by legal agreements spelling out each member’s rights and obligations
What are the three intensities of market coverage?
Intensive, selective, exclusive
Intensive Market Coverage
Available in many retail outlets, convenience products
Selective Market Coverage
Available in some outlets, shopping products
Exclusive Market Coverage
Available in very few outlets, specialty products
Channel Power
The ability of one channel member to influence another member’s goal achievement
How can dual distribution violate the law?
When the manufacturer that uses company owned outlets to dominate or drive out of business independent retailers or distributors that handle its products
Restricted Sales Territories
To tighten control over product distribution, a manufacturer may try to prohibit intermediaries from selling outside of designated sales territories
Tying Agreements
An agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well
Exclusive Dealing
When a manufacturer forbids an intermediary to carry products of competing manufacturers
Refusal to Deal
Producers have the right to choose or reject the channel members with which they will do business, but within existing distribution channels suppliers may not legally refuse to deal with wholesalers or dealers merely because they resist policies that are anticompetitive or in restraint of trade
Logistics/Physical Distribution
Refers to the activities used to move products from producer to consumer and other end users
What are the five logistics activities?
Order processing, inventory management, materials handling, warehousing, and transportation
Order Processing
The receipt and transmission of sales order information; entails order entry, order handling, and order delivery