Marketing Channels: Delivering Customer Value

Question 1

Value delivery network

Answer 1

A network composed of the company, suppliers, distributors, and, ultimately, customers who “partner” with each other to improve the performance of the entire system in delivering customer value.

Question 2

Marketing channel (or distribution channel)

Answer 2

A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

Question 3

Channel level

Answer 3

A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

Question 4

Direct marketing channel

Answer 4

A marketing channel that has no intermediary levels

Question 5

Indirect marketing channel

Answer 5

Channel containing one or more intermediary levels

Question 6

Channel conflict

Answer 6

Disagreement among marketing channel members on goals, roles, and rewards– who should do what and for what rewards.

Question 7

Conventional distribution channel

Answer 7

A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole.

Question 8

Vertical marketing system (VMS)

Answer 8

A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate.

Question 9

Corporate VMS

Answer 9

A vertical marketing system that combines successive stages of production and distribution under single ownership– channel leadership is established through common ownership.

Question 10

Contractual VMS

Answer 10

A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts.

Question 11

Franchise organization

Answer 11

A contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production-distribution process.

Question 12

Administered VMS

Answer 12

A vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties.

Question 13

Horizontal marketing system

Answer 13

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.

Question 14

Multichannel distribution system

Answer 14

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments.

Question 15

Disintermediation

Answer 15

The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries.

Question 16

Marketing channel design

Answer 16

Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

Question 17

Intensive distribution

Answer 17

Stocking the product in as many outlets as possible

Question 18

Exclusive distribution

Answer 18

Giving a limited number of dealers the exclusive right to distribute the company’s products in their territories.

Question 19

Selective distribution

Answer 19

The use of more than one but fewer than all the intermediaries who are willing to carry the company’s products.

Question 20

Marketing channel management

Answer 20

Selecting, managing, and motivation individual channel members and evaluating their performance over time.

Question 21

Marketing logistics (physical distribution)

Answer 21

Planning, implementing, and controlling the physical flow of materials, final goods, and related information form points of origin to points of consumption to meet customer requirements at a profit.

Question 22

Supply chain management

Answer 22

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.

Question 23

Distribution center

Answer 23

A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

Question 24

Intermodal transportation

Answer 24

Combining two or more modes of transportation.

Question 25

Integrated logistics management

Answer 25

The logistics concept that emphasizes teamwork –both inside the company and among all the marketing channel organizations –to maximize the performance of the entire distribution system.

Question 26

Third-party logistics (3PL) provider

Answer 26

An independent logistics provider that performs any or all of the functions required to get a client’s product to market.