Chapter 11 Marketing Channels. Marketing an introduction. Armstrong, Kotler, Trifts, Buchwitz

Contractual VMS

A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone.

Corporate VMS

A vertical marketing system that combines successive stages of production and distribution under single ownership—channel leadership is established through common ownership

Administered VMS

A vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties

Marketing channel (or distributing channel)

FedEx works interdependently with other companies to make their product or service available for use or consumption by the consumer or business user

Multichannel distribution system (or hybrid marketing channel)

Fidelity Investments uses telephones, the internet, and branch offices as different marketing channels to reach one or more customer segments

Indirect marketing channel

On campus classes requires people to maintain buildings and coordinate room and teaching schedules. These intermediaries perform work to bring the product (class) to the student

Channel conflict

Tupperware in-home consultants and Target are conflicting intermediaries who work to bring the Tupperware product to its consumers

Horizontal marketing system

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity

Conventional distribution channel

A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole

Franchise organization

A contractual vertical marketing system in which a channel member, called a franchiser, links several stages in the production-distribution process

Vertical marketing system (VMS)

A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them or has so much power that they all cooperate.

Multichannel distribution system (or hybrid marketing channel)

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments

Distribution center

A large, highly automated Wal-Mart storage center receives goods from various plants and suppliers. Then, it uses laser scanners, conveyer belts, and thousands of workers to fill orders for and deliver goods to hundreds of Wal-Mart retailers so that the customers can get the goods as quickly as possible

Distribution center

A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible

Channel level

A layer of intermediaries that performs some work bringing the product and its ownership closer to the final buyer

Indirect marketing channel

A marketing channel that contains one or more intermediary levels

Direct marketing channel

A marketing channel that has no intermediary levels

Marketing channel (or distributing channel)

A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user

Third-party logistics (3PL) provider

An independent logistics provider that performs any or all of the functions required to get its client's product to market

Direct marketing channel

An online class delivers the product (class) directly to the student with no intermediary levels

Intensive distribution

Coca-Cola sells its products in a wide variety of outlets, such as grocery stores, convenience stores, gas stations, hardware stores, office supply stores, restaurants and vending machines.

Intermodal transportation

Combining two or more modes of transportation

Channel conflict

Disagreement among marketing channel members on goals and roles—who should do what and for what rewards

Third-party logistics (3PL) provider

For Jockey International, UPS manages a warehouse, fills internet orders, boxes them, provides truck drivers to ship goods, and phone representatives to handle problems. In short, UPS provides many, if not all of the functions required to get its client's product to market

Franchise organization

Ford has a network of dealers. Coca Cola licenses bottlers. Individual managers run McDonald restaurants.

Exclusive distribution

Giving a limited number of dealers the exclusive right to distribute the company's products in their territories

Selective distribution

KitchenAid, Maytag, Whirlpool, and General Electric will not sell their products through every retailer who is willing to carry their product. Instead, they use dealer networks and a few large retailers.

Corporate VMS

Kroger the factories that produce and the stores that sell many of its products

Exclusive distribution

Luxury car markets, such as Bentley, sell exclusively through a limited number of retailers.

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

Value delivery network

Palm manages a whole community of suppliers, assemblers, resellers, and complementors who must work effectively together to make life easier from Palm's customers

Disintermediation

People used to buy flowers from stores or street vendors. However, radical new types of intermediaries, such as 1-800 numbers and internet sites, have displaced many of the traditional resellers.

Administrative VMS

Some manufactures, like Proctor & Gamble, are large enough and powerful enough to influence their resellers. Retailers, like Barnes & Noble, are large enough and powerful enough to influence their manufacturers.

Intensive distribution

Stocking the product in as many outlets as possible

Disintermediation

The displacement of traditional resellers from a marketing channel by radical new types of intermediaries

Integrated logistics management

The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations, to maximize the performance of the entire distribution system

Value delivery network

The network made up of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system.

Marketing logistics (physical distribution)

The tasks involved in planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit

Selective distribution

The use of more than one, but fewer than all, of the intermediaries who are willing to carry the company's product

Horizontal marketing system

When McDonald's set up "express" restaurants in Wal-Mart stores, two companies joined together at one level to make new marketing opportunities.

Intermodal transportation

piggyback shipping, using both rails and trucks to ship products, is cheaper than straight trucking, but more flexible than just using trains.