Chapter 15, Managing Marketing Channels and Supply Chains

channel conflict
arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals
customer service
the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience
disintermediation
conflict arises when a channel member bypasses another member and sells or buys products direct
dual distribution
an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product; although not illegal, can be viewed as anticompetitive in some situation
exclusive distribution
the opposite of intensive distribution because only one retailer in a specified geographical area carries the firm’s products
intensive distribution
a firm tries to place its products and services in as many outlets as possible
logistics
involves those activities that focus on getting the right amount of the right products ot the right place at the riht time at the lowest possible cost
marketing channel
consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users
multichannel marketing
the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries online
reverse logistics
a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal
selective distribution
a firm selects a few retailers in a specific geographical area to carry its products
supply chain
refers tot he various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users
total logistics cost
includes expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return products handling
vendor managed inventory (VMI)
where the supplier determines the product amount and assortment a customer(such as a retailer) needs and automatically delivers the appropriate items
vertical marketing systems
are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact; not illegal, but is sometimes subject to legal action under the Clayton Act if it has the potential to lessen competition or foster monopoly
transactional function
performed by intermediaries when they buy and sell products or services; buying, selling, risk taking
logistical functions
assorting/gathering, sorting and dispersing/transporting product functions performed by intermediaries
facilitating functions
functions performed by intermediators that make a transaction easier for buyers; financing, grading, market information/research
time utility
having a product or service when you want it
place utility
having a product or service available where consumers want it
form utility
enhancing a product or service to make it more appealing to buers
possession utility
efforts by intermediaries to help buyers take possession of a product or service
direct channel
the producer and the ultimate consumers deal directly with each otehr
indirect channel
intermediaries are inserted between the producer and consumers and perform numerous channel functions
internet marketing channels
employ the internet to make products and services available for consumption or use by consumers or organizational buyers
strategic channel alliances
where one firm’s marketing channel is used to sell another firm’s products
corporate vertical marketing system
the combination of successive stages of production and distribution under a single ownership
forward integration
a producer might own the intermediary at the next level down in the channel
contractual vertical marketing system
independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone
wholesaler-sponsored voluntary chains
involve a wholesaler that develops a contractual relationship with small, independent retailers to standardize and coordinate buying practices, merchandising programs, and inventory management efforts
retailer-sponsored cooperatives
exist when small, independent retailers form an organization that operates a wholesale facility cooperatively
franchising
a contractual arrangement between a parent company and an individual firm that allows the franchisee to operate a certain type of business under an established name and according to specific rules
manufacturer-sponsored retail franchise systems
licenses dealers to sell subject to various sales and service conditions
manufacturer-sponsored wholesale franchise systems
licenses wholesalers that purchase basics, then package, promote and distribute its products
service-sponsored retail franchise system
used by firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others
service-sponsored franchise systems
exist when franchisors license individuals or firms to dispense a service under a trade name and according to specific guidelines
administered vertical marketing systems
achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership
density
number of stores in a geographical area
buyer interests
information, convenience, variety, and pre/post sale services
vertical conflict
occurs between different levels in a marketing channel
horizontal conflict
occurs between intermediaries at the same level in a marketing channel
channel captain
a channel member that coordinates, directs, and supports other channel members
full-line forcing
a special kind of tying arrangement in which a supplier requires that a channel member carries its full line of products in order to sell a specific item int the supplier line, prohibited by Clayton Act
exclusive dealing
exists when a supplier requires channel members to sell only its products or restricts distributors from selling directly competitive brands, prohibited by Clayton Act
tying arrangements
occur when a supplier requires a distributor purchasing some products to buy others from the supplier, prohibited by Clayton Act
resale restrictions
refer to a supplier’s attempt to stipulate to whom distributors may resell the supplier’s products and in what specific geographical areas or territories they may be sold
logistics management
the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements
elements of logistics
flow, cost-effectiveness, and customer service
supply chain management
the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating an delivering products and services that provide value to customers
choice of supply chain marketing strategy
understanding the customer, understanding the supply chain, harmonizing the supply chain with the marketing strategy
crossdocking
a practice that involves unloading products from suppliers, sorting products for individual stores, and quickly reloading products onto its trucks for a particular store
flow
the supply chain is a ____
output
the end of the supply chain flow
time
order cycle or replenishment time for an item, meaning the time between the ordering of an item and when it is received and ready for use or sale