Unit 7 - Managing Marketing/Distribution Channels

Vocabulary terms and definitions related to marketing channels, distribution systems, and marketing logistics as discussed in Unit 7.

Marketing Channels

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

Channel Level

Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

Direct Marketing Channel

A distribution channel that has no intermediary levels where the company sells directly to consumers, such as GEICO, Amway, or Mary Kay Cosmetics.

Indirect Marketing Channel

A distribution channel containing one or more intermediary levels to help bring products to final buyers.

Information (Channel Function)

Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange.

Promotion (Channel Function)

Developing and spreading persuasive communications about an offer.

Contact (Channel Function)

Finding and communicating with prospective buyers.

Matching (Channel Function)

Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging.

Negotiation (Channel Function)

Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.

Physical Distribution (Channel Function)

The logistics function involving the transporting and storing of goods.

Financing (Channel Function)

Acquiring and using funds to cover the costs of the channel work.

Risk Taking (Channel Function)

Assuming the risks of carrying out the channel work.

Marketing Logistics

Also called physical distribution, this involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Outbound Distribution

Moving products from the factory to resellers and ultimately to customers.

Inbound Distribution

Moving products and materials from suppliers to the factory.

Reverse Distribution

Moving broken, unwanted, or excess products returned by consumers or resellers.

Supply Chain Management

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

Storage Warehouses

Facilities that store goods for moderate to long periods.

Distribution Centers

Large, highly automated warehouses designed to move goods rather than just store them by receiving goods, taking orders, and delivering them quickly.

Just-in-time Logistics Systems

Logistics systems where producers and retailers carry only small inventories of parts or merchandise, often enough for only a few days of operations, with new stock arriving exactly when needed.

Electronic Data Interchange (EDI)

The computerized exchange of data between organizations, primarily transmitted via the Internet, used to improve customer service and lower expenses.