Marketing Channels: Delivering Customer Value

Flashcards about Marketing Channels

Marketing Channels

Interdependent organizations that help make a product or service available for use or consumption

Supply Chains

Upstream partners supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service

Downstream Partners

Serve as distribution channels that link the firm and its customers.

Value Delivery Network

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

Channel Decisions

Affect every other marketing decision, can lead to competitive advantage, and may involve long-term commitments to other firms

Marketing Intermediaries

Transforms the assortments of products made by producers into the assortments wanted by consumers.

Channel Level

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

Direct Marketing Channel

No intermediary levels

Indirect Marketing Channels

One or more intermediary levels

Physical Flow of Products

One of the types of flows that connect the institutions in the channel

Flow of Ownership

One of the types of flows that connect the institutions in the channel

Payment Flow

One of the types of flows that connect the institutions in the channel

Information Flow

One of the types of flows that connect the institutions in the channel

Promotion Flow

One of the types of flows that connect the institutions in the channel

Channel Conflict

Disagreements among marketing channel members on goals, roles, and rewards

Horizontal Conflict

Occurs among firms at the same level of the channel.

Vertical Conflict

Occurs between different levels of the same channel.

Vertical Marketing System (VMS)

Consists of producers, wholesalers, and retailers acting as a unified system.

Corporate VMS

Vertical marketing system under single ownership

Contractual VMS

Vertical marketing system such as a franchise

Administered VMS

Vertical marketing system through the size and power of one of the parties

Horizontal Marketing System

Two or more companies at one level join together to follow a new marketing opportunity.

Multichannel Distribution Systems

A single firm sets up two or more marketing channels to reach customer segments.

Disintermediation

Occurs when product or service producers cut out marketing channel intermediaries or when radically new types of channel intermediaries displace traditional ones

Marketing Channel Design

Involves designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, evaluating the alternatives

Intensive Distribution

A strategy in which they stock their products in as many outlets as possible

Exclusive Distribution

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

Selective Distribution

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

Marketing Channel Management

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

Exclusive Distribution (Legal)

Legal as long as the parties do not substantially lessen competition or tend to create a monopoly and enter into the agreement voluntarily

Marketing Logistics

Planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to consumption

Outbound Logistics

Moving products from the factory to resellers and ultimately to customers

Inbound Logistics

Moving products and materials from suppliers to the factory

Reverse Logistics

Involves reusing, recycling, refurbishing, or disposing of broken, unwanted, or excess products returned by consumers or resellers

Warehousing

A logistics function involving storage of goods

Storage Warehouses

Store goods for moderate to long periods.

Distribution Centers

Large, highly automated warehouses that receive goods, take orders, fill them, and deliver goods to customers.

Inventory Management

Should be done in a cost effective and profitable manner

Just-in-time Logistics Systems

A type of inventory management system

Radio frequency identification (RFID)

Smart tag technology, gives the physical location of a product.

Multimodal Transportation

Combining two or more modes of transportation

Electronic Data Interchange (EDI)

Flows of information can be shared and managed through this

Vendor-Managed Inventory (VMI)

Customer shares real-time data on sales and current inventory levels with the supplier

Integrated Logistics Management

Emphasizes teamwork both inside the company and among all the marketing channel organizations

Third-Party Logistics Providers

Outsourcing to these providers for functions required to get a client’s product to market

Information

Key function performed by channel members to help complete transactions.

Promotion

Key function performed by channel members to help complete transactions.

Contact

Key function performed by channel members to help complete transactions.

Matching

Key function performed by channel members to help complete transactions.

Negotiation

Key function performed by channel members to help complete transactions.