Marketing Channels Flashcards

Flashcards for reviewing key concepts in marketing channels and supply chain management.

What is the role of upstream partners in a supply chain?

They supply raw materials, components, information, finances, and expertise needed to create a product or service.

What do downstream partners focus on?

They focus on marketing and distribution channels, including retailers and wholesalers, looking toward the customer.

What is the 'make and sell' view?

It includes the firm's raw materials, productive inputs, and factory capacity, forming the supply chain.

What is the 'sense and respond' view, or demand chain?

It suggests that planning starts with the needs of the target customer.

What is a value delivery network?

It's composed of the company, suppliers, distributors, and customers who partner to improve system performance.

What does a marketing channel (or distribution channel) do?

It makes a product or service available for use or consumption by the consumer or business user.

How do channel members add value?

By transforming product assortments into assortments wanted by consumers and bridging time, place, and possession gaps.

Name examples of how channel members add value.

Information, promotion, contact, matching, negotiation, physical distribution, financing, and risk taking.

What are the principal flows connecting channel levels?

Physical flow of products, flow of ownership, payment flow, information flow, and promotion flow.

What is channel conflict?

Disagreement among channel members over goals, roles, and rewards.

What are the two main types of channel conflict?

Horizontal conflict and vertical conflict.

What characterizes conventional distribution systems?

Independent producers, wholesalers, and retailers each maximizing their own profits, potentially at the expense of the system.

What is a vertical marketing system (VMS)?

A channel in which members at different levels work together in a unified way.

What leadership do VMSs provide?

Channel leadership, with producers, wholesalers, and retailers acting as a unified system.

What are the three types of vertical marketing systems (VMS)?

Corporate, contractual, and administered marketing systems.

What is a corporate vertical marketing system?

Combines successive stages of production and distribution under single ownership.

What is a contractual vertical marketing system?

Independent firms at different levels of production and distribution join together through contracts (e.g., franchises).

What is a franchise organization?

A contractual VMS where a franchisor links several stages in the production-distribution process.

What is an administered vertical marketing system?

A VMS that coordinates successive stages through the size and power of one party.

What is a horizontal marketing system?

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

What are multichannel distribution systems?

Systems where a single firm sets up two or more marketing channels to reach customer segments.

What is disintermediation?

The cutting out of marketing channel intermediaries by producers or the displacement of traditional resellers by new intermediaries.

What is the first step in channel design decisions?

Analyzing consumer needs.

What is the second step in channel design decisions?

Setting channel objectives.

What is the third step in channel design decisions?

Identifying channel alternatives.

What is the fourth step in channel design decisions?

Evaluating channel alternatives.

What is involved in analyzing consumer needs in channel design?

Finding out what consumers want from the channel, identifying market segments, and minimizing the cost of meeting needs.

What needs to be balanced when setting channel objectives?

Consumer needs against costs and customer price preferences.

What are the kind of major alternatives that need to be identified?

Types of intermediaries, number of intermediaries, and responsibilities of channel members

Name the types of distribution strategies

Intensive, exclusive and selective distribution

What aspects need to be agreed on between a producer and intermediaries?

Price policies, conditions of sale, territory rights, and specific services.

What criteria are used to evaluate major channel alternatives?

Economic criteria, control issues, and adaptability criteria.

Define marketing logistics.

Planning, implementing, and controlling the physical flow of goods, services, and related information from origin to consumption.

What is supply chain management?

Managing upstream and downstream value-added flows of materials, final goods, and information.

What are the goals of marketing logistics?

To provide a targeted level of customer service at the least cost.