MKT305 Ch 10,11

Franchise Organization

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

Contractual VMS

A vertical marketing system in which independent firms at different levels of production and distribution join together through contacts.

Wholesaler Channel Functions

Selling and promoting, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, market information, management services and advice.

Retailer

A business whose sales come primarily from retailing.

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, perhaps even at the expense of profits for the system as a whole.

Vertical Marketing System

A 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

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

Wholesaler

A firm engaged primarily in wholesaling activities.

Category Killer

A giant specialty store that carries a very deep assortment of a particular line.

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.

Supermarket

A large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products.

Channel Level

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

Indirect Marketing Channel

A marketing channel containing one or more intermediary levels.

Direct Marketing Channel

A marketing channel that has no intermediary levels.

Value Delivery Network

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

Discount Store

A retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume.

Specialty Store

A retail store that carries a narrow product line with a deep assortment within that line.

Department Store

A retail store that carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers.

Service Retailer

A retailer whose product line is actually a service; examples include hotels, airlines, banks, colleges, and many others.

Marketing Channels

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

Convenience Store

A small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods.

Superstore

A store much larger than a regular supermarket that offers a large assortment of routinely purchased products, nonfood items, and services.

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.

Retailing

All of the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.

Wholesaling

All the activities involved in selling goods and services to those buying for resale or business use.

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.

Warehouse Club

An off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees.

Multimodal transportation

Combining two or more modes of transportation.

Omni-Channel Retailing

Creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping.

Marketing Channel Design

Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

Channel Conflict

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

Middlemen/intermediaries

Firms that help producers bring goods to market instead of selling goods directly to final users.

Shopper Marketing

Focusing the entire marketing process on turning shoppers into buyers as they approach the point of sale, whether during in-store, online, or mobile shopping.

Information Management

From a logistics perspective, flows of information, such as customer transactions, billing, shipment and inventory levels, and even customer data, are closely linked to channel performance. Companies need simples, accessible, fast, and accurate processes for capturing, processing, and sharing channel information.

Exclusive Distribution

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

Distribution Channel Functions

In making products and services available to consumers, channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who use them. Members of the marketing channel perform many key functions. These include information, promotion, contact, matching, negotiation, physical distribution, financing, and risk taking.

Transportation

In shipping goods to its warehouses, dealers, and customers, the company can choose among five main transportation modes: truck, rail, water, pipeline, and air, along with an alternative mode for digital products-the Internet.

Supply Chain Management

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final customers.

Marketing Logistics

Planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Intensive Distribution

Stocking the product in as many outlets as possible.

Warehousing

Storing goods because of production and consumption cycles not matching. The storage function overcomes differences in needed quantities and timing, ensuring that products are available when customers are ready to buy them.

Disintermediation

The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers 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.

Selective Distribution

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