Marketing Ch 12

exclusive distribution

A strategy of selling products through one or a few retailers in a specific location.

Intermediaries

-offer producers greater efficiency in making goods available to target markets. -usually offer the firm more than it can achieve on its own based on contacts, experience, specialization, and scale of operations, etc .

Intensive distribution

A strategy designed to get products into as many outlets as possible.

Selective distribution

A strategy of selling products at specific outlets and/or locations.

How Channel Members Add Value

Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them

Conventional distribution systems

consist of one or more independent producers, wholesalers, and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict.

Contractual vertical marketing system

consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone. The most common form is the franchise organization.

Indirect marketing channels

contain one or more intermediaries

Administered vertical marketing system

has a few dominant channel members without common ownership. Leadership comes from size and power.

Direct marketing channel

has no intermediary levels; the company sells directly to consumers

Corporate vertical marketing system

integrates successive stages of production and distribution under single ownership

Horizontal conflict

is conflict among members at the same channel level

Vertical conflict

is conflict between different levels of the same channel

Value delivery network

is the firm's suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system

Franchise organization

links several stages in the production distribution process -Manufacturer-sponsored retailer franchise system -Manufacturer-sponsored wholesaler franchise system -Service firm-sponsored retailer franchise system

Disintermediation

occurs when product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones.

Vertical marketing systems (VMSs)

provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system and consist of: -Corporate marketing systems -Contractual marketing systems -Administered marketing systems

Financing

refers to acquiring and using funds to cover the costs of carrying out the channel work

Risk taking

refers to assuming the risks of carrying out the channel work

Promotion

refers to developing and spreading persuasive communications about an offer

Channel conflict

refers to disagreement over goals, roles, and rewards by channel members

Channel level

refers to each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer

Contacts

refers to finding and communicating with prospective buyers

Information

refers to gathering and distributing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange

Negotiation

refers to reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred

Matching

refers to shaping and fitting the offer to the buyer's needs, including activities such as manufacturing, grading, assembling, and packaging

Physical distribution

refers to transporting and storing goods