Place Flashcards
Place in marketing meas
Distribution
A mkt channel or distribution channel
specific set of interdependent organizations that play a role in making a product/service available for use/consumptions by the consumer/business customers
Value delivery network
composed of company, suppliers, distributors, customers who partner with each other to improve the performance of the entire system in delivering customer value
Channel level
layer of intermediaries that performs some work in bringing the product and its ownership closer to final buyer
5 major types of channel partners
retailers
wholesalers
drop-shipper
rack jobbers
brokers
Retailers
- primarily sell to consumers
- also buy suppliers at other retailers
wholesalers
sells items to retail stores that will then sell them to individual customers for a higher price
drop shipper
any kind of mail order is, in channel terminology, “drop
shipped.”
rack jobbers
a company or trader that has an agreement with a retailer to display and sell products in a store.
broker
never take possession of the goods,
they only negotiate the transfer.
e.g stock brokers, insurance
direct mkt channel
a mkt channel that has no intermediary level, sells directly to customers
indirect marketing channel
a marketing channel containing one or more intermediary levels
Conventional distribution
a channel consisting of one or more independent producers, wholesales, retailers. Each seperate business seek to mazimize its own profits
producer-> wholesalers -> retailers -> consumers
Vertical Marketing Systems
the producer of a product owns
or directly controls some or all of its channel partners.
(work together) (producer, wholesaler, retailer) -> consumer
3 kinds of VMS
- Corporate VMS
- Administered VMS
- Contractual VMS (Franchise)
Corporate VMS
large organization**, such as George Weston Limited, that owns many food producers and hundreds of food retailers; and Zara, which owns almost every stage of its distribution.
ADMINISTERED VMS
less formal organization where one large
company can wield influence simply due to its size and power—such as General Electric.
CONTRACTUAL VMS (FRANCHISE)
A contractual vms in which a channel member (franchisor), links several stages in the production distribution process
3 types of franchises
- manufacter-sponsored retailer franchise system
- manufacturer-sponsored wholesaler
franchise system - the service-firm sponsored
franchise system
Horizontal Marketing Systems
a system or organization of many companies, all of
which operate at the same level in the channel, such as the Star Alliance group of airlines
that share customers and share frequent flyer points.
Multichannel (Hybrid) Distribution Systems
combination of direct channels and indirect channels to reach its final customers (usually customers in different market segments) in a number of different ways.
partner relationship management (PRM) to
forge longterm partnerships with channel members.
Channel conflict
disagreements among mkt channel members on goals/roles/rewards
Evaluating channel members
recognize and reward intermediaries
who are performing well and adding good value for consumers.
Disintermediation
replace intermediary by a different kind of intermediary
e.g: Netflix replaced BlockBuster
Three types of Distribution Strategies
- intensive distribution
- selective distribution
- exclusive distribution
Intensive distribution
stocking the product in as many outlets as possible
-> convenience store strategy
Selective distribution
the use of more than one but fewer than all of the intermediaries that are willing to carry the company’s products
(few, carefully selected)
exclusive distribution
giving a limited number of dealers the exclusive right to distribute the company’s products in their territories
-> purposefully limit
4 Major channel design decisions
- analyzing customer needs
- setting channel objectives
- identifying major alternatives
- evaluating the major alternatives
setting channel objectives 3 decisions + 5 influences
- targeted level of customer service
- which segments to serve
- best channels to use in each case
- influenced by nature of company, its products, mkt intermediaries, competitors, environment
what to consider for major alternatives 3
- types of intermediaries (indirect/direct)
- number of intermediaries (intensive -> exclusive)
- responsibilities for each member
alternatives allocation ways 3
- economic criteria, a company compares the likely sales, costs, and profitability of different channel alternatives.
- Using control issues means giving them some control over the marketing of the product, and **some intermediaries take more control than others**.
- Using adaptive criteria means the company wants to keep the channel flexible so that it
can adapt to environmental changes.
Supply chain management
manage upstream and downstream value-added flows of materials, final goods, and related information among supplers/company/resellers and final consumers
marketing logistices (physical distribution)
planning, implementing, controlling the physical flow of materials, final goods and related info
from points of origin to point of consumptions
to meet customer requirement at a profit
Just-in-time
managing things so that the parts or supplies you need arrive just in
time to be used in the manufacturing process.
outbound distribution
(moving products from the factory to
resellers and ultimately to customers),
inbound distribution
(moving products and
materials from suppliers to the factory)
reverse distribution
(moving broken,
unwanted, or excess products returned by consumers or resellers).
goal of marketing logistics
provide a targeted level of customer service
at the least cost.
warehouse
large building where items are stored.
distribution centre,
- large building where items are
stored.
nothing is stored for very long; it’s just a
point for shipments to come in, then be re-distributed (say, to local retailers) and go out.
