MKT 3120 Chapter 15 Supply Chain and Channel Management

franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.

cross-docking distribution center

A distribution center to which vendors ship merchandise prepackaged and ready for sale. The merchandise goes to a staging area rather than into storage. When all the merchandise going to a particular store has arrived in the staging area, it is loaded onto a truck, and away it goes. Thus, merchandise goes from the receiving dock to the shipping dock—cross dock.

independent (conventional) marketing channel

A marketing channel in which several independent members—a manufacturer, a wholesaler, and a retailer—each attempts to satisfy its own objectives and maximize its profits, often at the expense of the other members.

vertical marketing system

A supply chain in which the members act as a unified system; there are three types: administrated, contractual, and corporate.

strategic (partnering) relationship

A supply chain relationship that the members are committed to maintaining long term, investing in opportunities that are mutually beneficial; requires mutual trust, open communication, common goals, and credible commitments.

administered vertical marketing system

A supply chain system in which there is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship.

contractual vertical marketing system

A system in which independent firms at different levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict.

corporate vertical marketing

A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios.

Horizontal channel conflict

A type of channel conflict in which members at the same level of a marketing channel, for example, two competing retailers or two competing manufacturers, are in disagreement or discord, such as when they are in a price war.

vertical channel conflict

A type of channel conflict in which members of the same marketing channel, for example, manufacturers, wholesalers, and retailers, are in disagreement or discord.

referent power

A type of marketing channel power that occurs if one channel member wants to be associated with another channel member. The channel member with whom the others wish to be associated has the power and can get them to do what they want.

Legitimate power

A type of marketing channel power that occurs if the channel member exerting the power has a contractual agreement with the other channel member that requires the other channel member to behave in a certain way. This type of power occurs in an administered vertical marketing system.

information power

A type of marketing channel power within an administered vertical marketing system in which one party (e.g., the manufacturer) provides or withholds important information to influence the actions of another party (e.g., the retailer).

Which of the following are NOT participants in supply chain management systems? A) consumers B) manufacturers C) warehouses D) stores E) suppliers

A) consumers

In a(n) ______ marketing channel, one or more intermediaries work with manufacturers to provide goods and services to customers. A) indirect B) multiple C) direct D) varied E) multifaceted

A) indirect

It is advantageous for retailers to use distribution centers for all following reasons EXCEPT A) the distribution center works best when the retailer has only a few outlets. B) distribution center space is less expensive than storage costs at retail stores. C) distribution centers make it possible for retailers to carry less inventory in the stores. D) distribution centers make it possible to reduce or prevent stock-outs. E) distribution centers can consolidate preparation to make merchandise floor-ready.

A) the distribution center works best when the retailer has only a few outlets.

_____ are firms that buy products from manufacturers and resell them to ______. A) Retailers; distribution centers B) Wholesalers; retailers C) Inventory warehouses; distribution centers D) Supply chains; consumers E) Stock centers; wholesalers

B) Wholesalers; retailers

With ______, the amount of merchandise sent to a store is determined based on sales data captured by POS terminals. A) a personal selling marketing strategy B) a just-in-time inventory system C) a pull marketing strategy D) vendor-managed inventory E) a push marketing strategy

C) a pull marketing strategy

When Bill sells the produce that he grows at the local farmers market, he is utilizing a(n) _____ marketing channel. A) indirect B) simplified C) direct D) variable E) modified

C) direct

______ is the electronic exchange of business documents from a retailer to a vendor and back, and may include sales data, purchase orders, invoices, and data about returned merchandise. A) CRM B) UPC C) CPFR D) EDI E) VIM

D) EDI

If a marketing channel is to run efficiently, the participating members must cooperate. Often, however, supply chain members do not share the same goals and this can lead to what is known as _____ conflict. A) supply chain B) intermediary C) marketing management D) distribution E) channel

E) channel

If you were to visit a distribution center, you'd likely see all the following activities EXCEPT A) getting merchandise floor ready. B) coordinating inbound transportation. C) coordinating outbound transportation. D) receiving, checking and storing merchandise. E) coordination of advertising in local outlets.

E) coordination of advertising in local outlets.

A quick-response (QR) system is used to manage A) customer complaints. B) supply chain communication. C) ticketing and marking. D) data mining. E) inventory.

E) inventory.

Wholesaler

Firm engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users.

just-in-time inventory system

Inventory management system designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise "just in time" for it to b used in the manufacture of another product, in the case of parts or components, of for sale when the customer wants it, in the case of consumer goods; also known as quick response (QR) inventory system in retailing

lead time

The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, ready for sale.

coercive power

Threatening or punishing the other channel member for not undertaking certain tasks. Delaying payment for late delivery would be an example.

price ticket

a document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas.

distribution center

a facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists

Viral Marketing program

a promotional strategy that encourages people to pass along a marketing message to other potential consumers

power

a situation that occurs in a marketing channel in which one member has the means or ability to have control over the actions of another member in a channel at a different level of distribution, such as if a retailer has power or control over a supplier

reward power

a type of marketing channel power that occurs when the channel member exerting the power offers rewards to gain power, offer a monetary incentive, for getting another channel member to do what it wants it to do

Marketing channel management

also called supply chain management; refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers.

vendor-managed inventory (VMI)

an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores

advancing shipping notice (ASN)

an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment

quick response inventory system

an inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it (see Just in time inventory system)

ticketing and marking

creating price and identification labels and placing them on the merchandise

planner

in a retailing context, an employee who is responsible for the financial planning and analysis of merchandise, and its allocation to stores

floor ready merchandise

merchandise that is ready to be placed on the selling floor immediately

Supply chain

refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize systemwide costs while satisfying the service levels their customers require.

Universal Product

the black and white bar code found on most merchandise

Electronic data interchange (EDI)

the computer-to-computer exchange of business documents from a retailer to a vendor and back

direct marketing channel

the manufacturer sells directly to the buyer

dispatcher

the person who coordinates deliveries to distribution centers

checking

the process of going through the goods upon receipt to ensure they arrived undamaged and that the merchandise ordered was the merchandise received

receiving

the process of recording the receipt of merchandise as it arrives at a distribution center or store

Radio Frequency Identification (RFID)

tiny computer chips that automatically transmit to a special scanner all the information about a container's contents or individual products

fulfillment center

warehouse facilities used to ship merchandise directly to customers

expertise power

when a channel member uses its expertise as leverage to influence the actions of another channel member

Indirect marketing channel

when one or more intermediaries work with manufacturers to provide goods and services to customers