Marketing - Chapter 10

Marketing channel

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

Channel level

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

Direct marketing channel

A marketing channel that has no intermediary levels, witht he producer selling directly to the consumer

Indirect marketing channels

A marketing channel containing one or more intermediary levels between the producer and the consumer

Channel conflict

Disagreements among marketing channel members on goals, roles, and rewards, who should do what and for what rewards

Vertical marketing system

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

Corporate VMS

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

Contractual VMS

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

Franchise organizations

A contractual vertical marketing system in which a channel member, called a franchisor, links several stages int he production distribution process by operating through licensed franchises

Administered VMS

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

Horizontal marketing system

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

Omnichannel distribution systems

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments, coordinating channel strategies to maximize total profits across all the channels

Channel disintermediation

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

Direct to customer brands

Brands that avoid direct competition with established traditional brands by marketing, selling, and shipping to consumers primarily through online and mobile channels

Marketing channel design

Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, evaluating those alternatives, and choosing the best channel design

Intensive distribution

Stocking the product 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 that are willing to carry the company’s products

Marketing channel management

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

Marketing logistics

Planning, implementing, and controlling the flow of materials, final goods, services, and related information from points of orgin to points of consumption to meet customer requirements at a profit

Supply chain management

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

Distribution centers

Large, highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible

Multimodal transportation

Combining two or more modes of transportation

Integrated logistics management

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

Third party logistics providers

Independent logistics providers that perform any or all of the functions required to get a client’s product to market