Chapter 10 Marketing

Wholesaler

buys goods in bulk from producers and sells them to retailers or other businesses

Multimodal transportation

combining two or more modes of transportation

Value delivery network

company, suppliers, distributors, and customers who partner with each other to improve the performance of the entire system

Vertical distribution system

consists of producers, wholesalers, and retailers acting as a unified system and the flows down to the consumer

intermediary

create greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operation, they usually offer the firm more than it can achieve on its own

Downstream

everyone involved in moving the finished product to customers

Upstream

everything and everyone that provide the materials and inputs before production

Conventional distribution channel

flows from a producer, wholesaler, retailer and then to the consumer

Horizontal marketing system

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

Distribution center

large, highly automated warehouses that receive goods, take orders, fill them, and deliver goods to customers. (designed to move goods)

Outbound Logistics

movement of finished products from the company to customers

Inbound Logistics

movement of materials from suppliers to the company

Direct marketing channel

no intermediary levels

Horizontal conflict

occurs among firms at the same level of the channel. (Ford Dealership vs Ford Dealership)

Vertical conflict

occurs between different levels of the same channel. (KFC parent company and its franchise operations)

Indirect marketing channels

one or more intermediary level

Reverse Logistics

process of returning products from customers back to the company for returns, recycling, or disposal

Retailer

sells products directly to the final consumer

Downstream partners

serve as distribution channels that link the firm and its customers

Storage warehouses

store goods for moderate to long periods

Upstream partners

supply the raw materials, component, parts, information, finances, and expertise needed to create a product or service

Supply chain

the entire network of organizations, people, activities, and resources involved in producing a product and delivering it to the customer

Channel of distribution

the path a product takes from the producer to the final customer, including all intermediaries involved

Channel member functions

they gather info, promote, find customers, match products to needs, negotiate, move and store goods, finance, and take on risk

What are the different transportation options?

truck, rail, water, pipeline, and air.

Which is preferred, conventional or vertical?

vertical

JIT

Just-in-time logistics (carry small amount of inventory; new stock arrives right when you need it! Key? Forecasting!)

RFID

Radio frequency identification, smart tag technology, gives the physical location of a product. (Makes the supply chain intelligent, transparent and automated.)

Define logistics? What are the key areas?

Planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to consumption

Intensive distribution

Sold everywhere → for everyday items (e.g., snacks)

Selective distribution

Sold in some outlets → for mid-range products (e.g., electronics)

Exclusive distribution

Sold in very few outlets → for luxury/premium items (e.g., designer watches)