1. Why Companies Use Marketing Channels

What is a marketing channel?

A pipeline that helps deliver a product from the producer to the consumer.

List two reasons why companies use marketing channels.

Increase efficiency and add value.

What function of marketing channels involves gathering data about customer preferences?

Information.

What is the purpose of the promotion function in marketing channels?

To advertise and promote the product to attract customers.

Define the term 'matching' in the context of marketing channels.

Customizing the product or arranging it in assortments that suit customer needs.

What is a direct marketing channel?

A channel where the producer sells directly to consumers.

Give an example of an indirect marketing channel.

A clothing manufacturer selling through department stores.

What type of conflict occurs between two retailers at the same level?

Horizontal conflict.

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

Corporate VMS, Contractual VMS, Administered VMS.

What does disintermediation mean in marketing channels?

Cutting out traditional intermediaries to sell directly to consumers.

What are the steps to design a marketing channel?

Understand customer needs, set channel objectives, identify alternatives, evaluate alternatives.

What is intensive distribution?

Widely distributing the product to as many outlets as possible.

What should be considered when selecting channel members?

Intermediaries' market knowledge, financial stability, and reach.

What is inbound logistics?

Managing the flow of materials from suppliers to the company.

What does reverse logistics refer to?

Managing returns, repairs, or recycling.

Name one major logistics function.

Transportation.

What is the role of logistics information management?

Using data to track orders and optimize operations.

What is a marketing channel?

A pipeline that helps deliver a product from the producer to the consumer, facilitating the transfer of goods and services.

List two reasons why companies use marketing channels.

Increase efficiency by streamlining the distribution process and add value to the product by making it more accessible to consumers.

What function of marketing channels involves gathering data about customer preferences?

Information, which helps companies understand market demand and inform decision-making.

What is the purpose of the promotion function in marketing channels?

To advertise and promote the product to attract customers and drive sales, effectively informing them about the product's benefits and availability.

Define the term 'matching' in the context of marketing channels.

Customizing the product or arranging it in assortments that suit customer needs, ensuring that what is offered aligns with consumer demand.

What is a direct marketing channel?

A channel where the producer sells directly to consumers without intermediaries, allowing for more control over the selling process.

Give an example of an indirect marketing channel.

A clothing manufacturer selling through department stores, utilizing intermediaries to reach a broader audience.

What type of conflict occurs between two retailers at the same level?

Horizontal conflict, which often arises from competition among businesses at the same distribution stage.

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

Corporate VMS, which merges multiple levels of the distribution process under a single ownership; Contractual VMS, where independent firms at different levels of production work together through contracts; and Administered VMS, which coordinates distribution through the power of one of the members.

What does disintermediation mean in marketing channels?

Cutting out traditional intermediaries to sell directly to consumers, often facilitated by online platforms.

What are the steps to design a marketing channel?

Understand customer needs to create a relevant channel, set channel objectives that align with business goals, identify alternatives to explore different distribution options, and evaluate alternatives to choose the most effective path.

What is intensive distribution?

Widely distributing the product to as many outlets as possible, aiming for maximum market coverage.

What should be considered when selecting channel members?

Intermediaries' market knowledge, financial stability, and reach to ensure successful collaboration.

What is inbound logistics?

Managing the flow of materials from suppliers to the company, which includes transportation, warehousing, and inventory management.

What does reverse logistics refer to?

Managing returns, repairs, or recycling, focusing on moving goods back through the supply chain.

Name one major logistics function.

Transportation, which involves the movement of goods from one location to another.

What is the role of logistics information management?

Using data to track orders and optimize operations, ensuring efficient inventory management and distribution.

What is selective distribution?

Distributing a product through a limited number of preferred retailers to maintain a desired level of exclusivity.

Define exclusive distribution.

A highly selective distribution strategy where a producer grants exclusive rights to sell their product to a single retailer or a limited number of retailers.

What is the purpose of a marketing channel audit?

To evaluate the effectiveness and efficiency of a marketing channel to identify areas for improvement.

What does 'channel design' involve?

The process of defining the structure of a marketing channel, including the selection of intermediaries and the flow of goods.

What are channel levels in marketing?

The layers of intermediaries that a product passes through from the producer to the consumer, typically classified as direct and indirect levels.

What is a multi-channel distribution strategy?

A strategy that uses multiple channels to reach different customer segments, such as online, in-store, and catalogs.

What are some advantages of using indirect distribution channels?

Wider market reach, established customer bases of intermediaries, and reduced burden on the producer for logistics and customer service.

How does a pull strategy differ from a push strategy in distribution?

A pull strategy seeks to create demand at the consumer level, drawing them to the product, whereas a push strategy involves pushing products through the channel to retailers.

What is a channel conflict?

Disagreement among participants in the channel over goals, duties, and rewards.

What is the significance of market coverage in distribution strategy?

Market coverage determines the extent to which a company intends to reach potential buyers, influencing the choice of distribution methods and partners.