MAR 3023 Ch 12

Members of the marketing channel perform Many key functions

1) Gathering of information 2) promotion 3) contact 4)matching 5) negotiation 6) physical distribution 7) financing 8) risk taking

Contractual VMS

A Vertical Marketing System in which independent firms at different levels of production and distribution join together through contracts.

Supply chain

Takes a make and sell view of business

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 through the size and power of one of the parties.

Horizontal marketing system

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

Indirect marketing channel

A channel containing one or more intermediary levels.

Direct marketing channel

A channel that has no intermediary level.

Conventional distribution channel

A conventional marketing channel that consists of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits.

Multichannel distribution system

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

Integrated logistics management

A logistics concept that emphasizes teamwork - inside the company and among all the marketing channel organization - to maximize performance of entire distribution system.

Value delivery network

A network comprised of the company suppliers, distributors, and ultimately customers who partner with each other to improve the system in delivering customer value

Third-party logistics provider

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

Distribution channels

Behavioral systems in which people and companies interact to accomplish individual, company, and channel goals

Marketing channel

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

Integrated logistics management

Defined as the logistics concept that emphasizes teamwork - both inside the company and among all the marketing channel organization - to maximize the performance of the entire distribution system.

Distribution center

Designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

Channel conflict

Disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards

Down stream marketing channels or distribution channels such as wholesalers and retailers

Form a vital link between the firm and its customers

Exclusive distribution

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

Intensive distribution

Involves stocking the product in as many outlets as possible.

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.

Marketing logistics

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.

Intermediaries

Play an important role in matching supply and demand

Demand chain - a linear view of purchase-production-consumption activities

Suggests a sense and respond view of the market - under this view planning starts by identifying needs of a target customers then responding by organizing a chain of resources and activities with the goal of creating customer value

Integrated logistics management

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

Selective distribution

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