Chapter 11

• accumulate products from several sources and then make those products available down the channel as a convenient assortment for consumers o Ex: HDTV's at Bestbuy

creating assortments

A ______ channel has no intermediaries and operates strictly from producer to end-user consumer or business user

direct

refers to the number of intermediaries involved in distributing the product

distribution intensity

when a manufacturer its for _________ distribution in a channel, it is often part of an overall positioning strategy built on prestige, scarcity, and premium pricing • ex: Voss water

exclusive

a system of interdependent relationships among a set of organizations that facilitates the exchange process

channel

channel members experience disagreements and their relationship can become strained or fall apart

channel conflict

degree to which any member of a marketing channel can exercise influence over the other members of the channel

channel power

involves an explicit or implicit threat that a channel captain will invoke negative consequences on a channel member if it doesn't comply with the leader's request or expectations

coercive power

consists of otherwise independent entities that are bound together legally through contractual agreement. Most famous example of this agreement is a franchise organization

contractual system

In a ________ VMS, a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries

corporate

might take form of important product knowledge ♣ Clinique representative in Nordstrom store

expert power

• ___________ functions performed by intermediaries include a variety of activities that help fulfill completed transactions and also maintain viability of the channel relationships o Financing o Market research o Risk taking

facilitating

channels with __________ tend to save end user consumers money over what most direct producer to consumer distribution approaches would cost, given the same product

intermediaries

results from contracts with franchise agreements or other formal agreements

legitimate

An _________ channel contains one or more intermediary levels

indirect

when the objective is to obtain maximum product exposure throughout the channel, __________ distribution strategy is designed to saturate every possible intermediary and especially retailers. _________ distribution is typically associated with low-cost convenience goods and impulsive goods

intensive

shopping goods, goods for which consumer may engage in a limited search are candidates for selective goods. Ex: appliances, midrange fashion apparel, home furnishings

selective distribution

taking product from multiple sources and transforming it, often through sorting it into different classifications for sales through the channel o Ex: eggs

accumulating bulk

the sheer size and power of one of the channel members places it in a position of channel control.

administered systems

do not take title to the product

agent intermediaries

The division of larger product quantities into smaller quantities as products get closer to the final market -occurs within a channel to better match quantities needed to space constraints and inventory turnover requirements

breaking bulk

the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries

Disintermediation

Disintermediation is common in ___-channels

E

take title to the product

Merchant intermediaries

Most channels are not direct from producer to consumer. Instead they contain a variety of intermediaries, formerly called ________, that play a role in the exchange process between producer and consumer

middlemen

Based on the concept of value networks, a whole new breed of organization is arising called a _________ organization, or virtual organization, because it eliminates many in-house business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value

network

One function of channel intermediaries is _________ distribution, or logistics, which is the integrated process of moving input material to the producer, in process inventory through the firm, and finished goods out of the firm through the channel of distribution

physical

when a channel member is respected, admired or revered based on one or more attributes , that member enjoys ________ power within the channel

referent

an overarching system of formal or informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space

value network

consists of vertically aligned networks behaving and performing as a unified system o can be set up in three ways: corporate systems, contractual systems, and administered systems

vertical marketing systems