Marketing Ch 15 LR

What is meant by a marketing channel?
consists of individuals and firms involved in the process of making a product or service available to sue or consumption by consumers or industrial users
What are the three basic functions performed by intermediaries?
transactional, logistical, and facilitating functions
What is the difference between a direct and an indirect channel?
Direct channel- a producer of consumer or business products and services and ultimate consumers or industrial users deal directly with each other
Indirect channel- has intermediaries that are inserted between the producer and ultimate consumers or industrial users and perform numerous channel functions
Why are channels for business products typically shorter than channels for consumer products?
Business channels are typically shorter than consumer channels because business users are fewer in number, tend to be more concentrated geographically, and buy in large quantities
What is the principal distinction between a corporate vertical marketing system and an administered vertical marketing system?
Corporate vertical marketing system- combines successive stages of production and distribution under a single ownership
Administered vertical marketing system- achieves coordination by the size and influence of one channel member rather than through ownership
What are the tree questions marketing executives consider when choosing a marketing channel and intermediaries?
(1)Which will provide the best coverage of the target market? (2) Which will best satisfy the buying requirements of the target market? (3) Which will be the most profitable?
What are the three degrees of distribution density?
Intensive, exclusive, selective
What is meant by exclusive dealing?
Exists when a supplier requires channel members to sell only its products or restricts distributors from selling directly competitive products. It is specifically prohibited under the Clayton Act when it lessens competition or creates monopolies
What is the principal difference between a marketing channel and a supply chain?
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
Supply Chain- differs in therms of membership. It includes suppliers who provide raw materials to a manufacturer as well as the wholesalers and retailers-the marketing channel-that deliver the finished goods to ultimate consumers
The choice of a supply chain involves what three steps?
(1) Understand the customer. (2) Understand the supply chain. (3) Harmonize the supply chain with the marketing strategy
A manager’s key task is to balance which four customer service factors against which five logistics cost factors?
Customer service factors- Time, dependability, communication, and convenience.
Logistics cost factors- transportation costs, materials handling and warehousing costs, inventory costs, stockout costs (being out of inventory), and order processing costs