Lecture 11 Place Flashcards
Define upstream partners
Firms that supply raw materials, components, parts, information, finances, and expertise needed to create a products or service
Define downstream partners
These include the marketing channels or distribution channels that look towards the customer, including retailers and wholesalers
Define supply chain
“make and sell” view includes the firm’s raw materials, productive inputs, and factory capacity
Define demand chain
“sense and respond” view suggests that planning starts within the needs of the target customer
Define value delivery network
This is composed of the company, suppliers, distributors, and customers who partner with each other to improve the performance of the entire system
Define marketing channel (distribution channel)
This is a set of independent organisations that help make a product or service available for use or consumption by the consumer or business user
What is a benefit of market channel intermediaries?
They make buying easier for the consumer
Give an example of a marketing channel distributary
Grocery retailer
What are 8 ways in which channel members add value?
Information Promotion Contact Matching Negotiation Physical distribution Finance Risk taking
Define channel level
This is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
Define direct marketing channel
This is a marketing channel that has no intermediary levels
Define indirect marketing channel
This is a marketing channel containing one or more intermediary levels
What happens when using direct channels?
The company sells directly to the consumer
What happens when using indirect channels?
The company uses one or more levels of intermediaries to help bring its products to the final buyers
Give 4 different flows that can help connect channels
Physical flow of products Flow of ownership Payment flow Information flow Promotion flow
What do marketing channels consist of?
Firms that have partnered for their common good with each member playing a specialised role
Define channel conflict
This refers to disagreement among channel members over goals, roles and rewards
What are the two types of channel conflict?
Horizontal conflict
Vertical conflict
What do conventional distribution systems consist of?
These consist of one or more independent producers, wholesalers, and retailers, each separate business is seeking to maximise its own profits, perhaps at the expense of the profits for the system as a whole.
What do vertical marketing systems do?
They provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system
Give three examples of vertical marketing systems
Corporate marketing systems
Contractual marketing systems
Administered marketing systems
Define corporate vertical marketing systems
These combine successive stages of production and distribution under single ownership
Define contractual vertical marketing systems
These consist of independent firms at different levels of production and distribution who join together through contracts
What is an administered vertical marketing system?
This is a VMS that coordinates successive stages of production and distribution through the size and power of one of the parties
Define horizontal marketing system
This is a channel arrangement where two or more companies at one level join together to fellow a new marketing opportunity
Define multi channel distribution systems
These are systems in which a single firm sets up two or more marketing channels to reach one or more customer segments
What is disintermediation?
This is the cutting out of marketing channel intermediaries by producers or the displacement of traditional resellers by new intermediaries
What are the 4 components of marketing channel design?
Analysing customer needs
Setting channel objectives
Identifying major channel alternatives
Evaluating channel alternatives
What does analysing customer needs entail?
Find out what target consumers want from the channel
Identify market segments
Determine the best channel use
Minimise the cost of meeting customer service requirements
What does setting channel objectives entail?
Determine targeted levels of customer service
Balance consumer needs against costs and customer price preferences
What does identifying major alternatives entail?
Types of intermediaries
Number of intermediaries
What does looking at the types of intermediaries involve?
Finding channel members able to carry out channel work
What is an issue most companies face when looking at the types of intermediaries?
Most companies face many channel member choices
What 3 things need to be looked at when deciding on the number of marketing intermediaries?
Intensive distribution
Exclusive distribution
Selective distribution
What criteria are channel members responsible for?
Economic criteria
Control issues
Adaptability criteria
What do producers and intermediaries need to agree on?
Price policies
Conditions of sale
Territory rights
Specific services
What are the 4 stages in channel management decision?
1- selecting channel members
2- managing channel members
3- motivating channel members
4- evaluating channel members
Define exclusive distribution
This is when the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories
Define exclusive dealing
This is when the seller requires that the exclusive distribution sellers not handle competitor’s products
What are exclusive territorial agreements?
These are where producers or sellers limit territory
What are tying agreements?
Agreements where the dealer must take all or most of the line
What do marketing logistics involve?
This is physical distribution and involves planning, implementing and controlling the physical flow of goods, services and related information from points of origin to points of consumption to meet customer requirements at a profit
What does supply chain management involve?
Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
What is the goal of marketing logistics?
To provide a targeted level of customer service at the least cost
What are the 3 types of logistics?
Inbound
Outbound
Reverse
What is integrated logistics management?
The recognition that providing customer service and trimming distribution costs requires teamwork internally and externally
What are 4 major logistics functions?
Warehousing
Inventory management
Logistics information management
Transportation
