Test 1 Review Flashcards
Sustainable Competitive Advantage
competitive edge that cannot be quickly or easily copied
Optimal Multichannel Mix
Internet based online channels, In-store Channels, Mail Order Channels, Wholesale Distributor Channels, Sales Rep Channels, etc
Channel Portfolio
Provides access to a range of customer segments while achieving channel diversification
Multichannel Synergy
using one channel to enhance the effectiveness and efficiency of other channels in the mix.
Marketing Channel
The external contactual organization that management operates to achieve its distribution objectives
Contactual Organization
firms or parties who are involved in negotiatory functions as a product or service moves from the producer to the end user
Facilitating Agencies
transportation companies, ad agencies, banks, warehouses, insurance companies; perform tasks other than negotiatory functions
Channel Manager
anyone in a firm or organization that is involved in marketing channel decision making
Marketing Mix Channel Strategy
Managing the controllable 4 P’s (Product, Price, Promotion and Place) to meet the needs of the targeted consumer in the light of uncontrollable external factors
Environmental Factors
Government, Sociocultural Norms, Economy, Competition, and Technology
Disintermediation
eliminating the middle man
Specialization and Division of Labor
Setting specific tasks for people within a firm to create the finished product or mission, (Assembly Line)
Contactual Efficiency
level of negotiation effort between sellers and buyers relative to achieving a distribution objective
Channel Structure
The group of channel members to which a set of distribution tasks has been allocated (given set of distribution tasks that must be performed to achieve distribution objectives)
Ancillary Structure
The group of institutions (facilitating agencies) that assist channel members in performing distribution tasks
Commercial Channel
The external contactual organization that management operates to achieve its distribution objectives (DOES NOT INCLUDE END USER)
During a recession
Economic slowdown, sales volume levels and profitability slow. Channel members need to focus on adding value
During an inflation
Devaluation of Money. Channel members expect better price deals, more promotional support, and reduced inventory.
Horizontal Competition
competition from firms at the same type (Banana vs JCrew)
Intertype competition
Competition between different types of firms at the same level (off-price stores vs department store)
Vertical Competition
Competition between firms at different channel levels (retailer vs wholesaler)
Channel System Competition
Complete channels competing other complete channels
Complete Channel
Vertical Marketing Systems
1) Corporate
2) Contractual
3) Administered
Corporate Channel
Production and marketing facilities are owned by the same company
Contractual Channel
Independent channel members are linked by formal contractual agreement
Administered Channel
Result from strong domination by one of the channel members (usually manufacturer) over the other channel members
The Technological Environment
RFID (Radiofrequency Identification), EDI (Electronic Data Interchange), Cloud Computing,
Power in Marketing Channels
The capacity of a particular channel member to control or influence the behavior of another channel member
Power Base
The root of power that one party exercises over the other.Reward, Coercive, Legitimate, Referent & Expert Power
Reward Power
Channel can reward the other if they conform to the request. Present in almost all channel members
Coercive Power
Channel punishes the other for not fulfilling request
Legitimate Power
Has a legitimate right to exercise its power (Franchisor to the franchisee)
Referent Power
When wholesalers user manufacturers power as their own power
Expert Power
One channel members attempt to influence another channel member is based on superior expertise
Marketing Channel Strategy
Broad principles by which the firm expects its distribution objectives for its target markets
Slotting Allowances
Paying channel members for shelving space
Channel Design
Decisions associated when selecting new marketing channels where none had existed before, or to modify existing channels
Who engages in Channel Design?
Producers, Wholesalers, and Retailers all face channel design problems
Paradigm of Channel Design
1) Need
2) Setting/coordinating distribution objectives
3) Specifying Distribution Tasks
4) Developing alternative channel structures
5) Evaluating the variables affecting the channel structure
6) Choosing the best channel structure
7) Selecting the channel members
Intensity at various levels
- Intensive
- Selective
- Exclusive
Durable Goods
Motor Vehicles, Furniture, Electrical Goods, Plumbing, Lumber, Commercial Equipment
