Place Flashcards
Why do we need channels?
It makes buying a lot easier and more efficient for consumers
Roles of intermediaries
information, promotion, contact, matching, negotiation
Conventional Marketing System
a channel consisting of one or more independent producers, wholesalers, and retailers, each separate seeking to make its own profits
Vertical Marketing System
a channel structure in which producers, wholesalers, and retailers act as a unified system
Corporate VMS
- corporation owns production and distribution
- coordination and conflict through regular organization channels
example; American Apparel, Zara
Contractual VMS
- individual firms join together through extensive contracts
- includes franchise organizations
example; Hertz, enterprise
Administered VMS
Channel Captains
example; Home Depot, Walmart, Barnes & Noble
Horizontal Marketing System
a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
example; General Mills/Cheerios or Walmart/Subway
Matches Supply & Demand?
Horizontal marketing system
Selective Distribution
the use of more than one but fewer than all of the intermediaries who are willing to carry the company’s products
example; appliances, furniture
Exclusive Distribution
giving a limited number of dealers the exclusive right to distribute the company’s products in their territories
example; luxury goods, bentley
Intensive Distribution
stocking the product in as many outlets as possible
example; crest toothpaste, candy, coca-cola
Key Trends in Retailing
- growth of non-store retailing (amazon)
- retail convergence and the rise of mega-retailers
(RPM in Home Depot) - global expansion of major retailers (Mcdonalds)
- growing importance of technology (shop & stop)
- retail stores as communities and hangout places (apple)
Disintermediation
the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
example; best buy, blockbuster
Warehousing
production and consumption cycles rarely match, so most companies must store their goods while they wait to be sold
