MARK 1115 - CH12

vocab: channel members

comprise all parties in the marketing channel that negotiate with one another, buy and sell products

vocab: supply chain

connected chain of all the business entities, both internal and external

vocab: vertical integration

where one company controls 2 or more stages in it’s production and/or distribution

discrepancy of quanitty/ assortment/ temporal discrepancy

• quantity: difference in the amount of products produced and the amount the end-user wants to buy

• assortment: consumer does not have all the items needed to receive full satisfaction from a product

• temporal: product is produced but the consumer is not ready to buy it

types of marketing channels

• direct channel

• retailer channel → sell to consumers

• wholesaler channel → buy from different manufacturers to sell to other wholesalers/retailers

• agent/broker channel → act as a matchmaker b/t buyer and seller

marketing channels for business and industrial products

vocab: multiple distributions/dual distribution

when a producer selects two or more channels to distribute the same product to target markets

vocab: stragetic channel alliances

cooperative agreements between companies to use one of the manufacturer’s already established channel

factors affecting channel choice

• Market factors: who, what, when, where, how, and geography

• Product factors: complexity, PLC, delicacy (benefit from shorter more direct channels) - e.g. medicine (C) or milk (D)

• Producer Factors: more resources, control, customer service

levels of intensity

• intensive - maximum market coverage ( lots of middlemen)

• selective - just a few in any single area

• exclusive - only one or a few dealers in any given area (not many middle men)

handling channel relationships

• channel power, control, and leadership → retailor/wholesalers cannot change pricing because of the brand’s influence

• channel conflict → clash of goals/objectives among channel members (e.g. mattel wants to sell new product only on their website first 2 days, walmart doesn’t like that)

  • horizontal: same level

  • vertical: manufacturer vs retailer

• channel partnering: joint effort among channel members to create a competitive advantage (e.g. charging vehicles only for tesla)

vocab: channel power and channel control

• channel control: when one channel mamber intentionally affects another member’s behaviour

• channel power: ability to influence others

vocab: supply chain management

• if a brand wants to restock their product they need to stock JIT

• inventory storage system - has strong relationship with suppliers/producers/wholesalers (may not have on hand but can get supplies very quickly from other levels)

role of retail

• sells goods/services to the final consumer

• needs to anticipate consumers changing needs

• e-commerce