Marketing, Chapter 10

Electronic data interchange

A computer-to-computer exchange of business documents from a retailer to a supplier and back.

Selective distribution

A firm selects a few retail outlets in a specific geographically area to carry its products.

Intensive distribution

A firm tries to place its products or services in as many outlets as possible.

Dealer

A general term that can mean the same as a distributor, a retailer, or a wholesaler.

Distributor

A general term used to describe intermediaries who perform a variety of functions, including selling, maintaining inventories, extending credit, and others -- usually used for those in business markets.

Just-in-time inventory system

A system designed to deliver less merchandise on a more frequent basis than traditional inventory systems.

Logisticts

Activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.

Backward integration

An example of this is a retailer owning a manufacturing operation.

Retailer

An intermediary who sells to consumers.

Cross-channel shopper

An online consumer who researches online products and then purchases them at a retail store.

Wholesaler

Any intermediary who sells to other intermediaries, usually to retailers -- this term usually applies to intermediaries who deal in consumer goods.

Agent or broker

Any intermediary with legal authority to act on behalf of another channel member (for example, a manufacturer)

Dual distribution

Arrangement whereby a firm reaches buyers by using different types of channels for the same basic product.

Forward integration

As an example of this, a producer might own the intermediary at the next level down in the channel.

Multichannel marketing

Blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with customers.

Electronic marketing channels

Channels that use the Internet to make goods and services available to consumers or business buyers.

Franchising

Contractual arrangement in which a parent company (the franchiser) allows an individual or firm (the franchisee) to operate a certain type of business under an esbalished name and according to specific rules set by the franchiser.

Marketing channel

Individuals and firms involved in the processs of making a product or service available.

Intermediaries

Individuals or firms performing a role in the marketing channel, involved in making a product available.

Supply chain management

Integration and organization of information and logistics across firms in a supply chain for the purposes of creating and delivering goods and services that provide value to consumers.

Time, place, form, information, possession

Marketing channels help create value for consumers through these five utilities: _____, _____, _____, _____, and _____.

Exclusive distribution

Only one retail outlet in a specific geographical area carries the firm's products.

Vertical marketing systems

Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.

Supply chain

Sequence of firms that perform activities required to create and deliver a product to consumers or industrial users.

Channel conflict

This areas when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.

Vertical conflict

This channel conflict occurs between different levels in a marketing channel; for example, between a manufacturer and a wholesaler or between a manufacturer and a retailer.

Horizontal conflict

This channel conflict occurs between intermediaries at the same level in a marketing channel, such as between two or more retailers or two more wholesalers that handle the same manufacturer's brands.

Retailer-sponsored cooperatives

This variation of contractual vertical marketing systems exists when small, independent retailers form an organization that operates a wholesale facility cooperatively.

Wholesaler-sponsored voluntary chains

This variation of contractual vertical marketing systems involves a wholesaler that develops a contractual relationship with small, independent retailers to standardize and coordinate buying practices, merchandising programs, and inventory management efforts.

Corporate vertical marketing system

Under this marketing system, a firm at one level of a channel owns the firm at the next level or owns the whole channel.

Administered vertical marketing system

Under this marketing system, coordination is achieved at sucessive stages of production and distribution by the size and influence of one channel member rather than through ownership.

Contractual vertical marketing systems

Under this marketing system, independent production and distribution firms combine their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone. This is the most popular marketing system.

Disintermediation

Vertical channel conflict that arises when a channel member bypasses another member and sells directly to consumers