Chpt 10

1.) channel design

(first step) begins with assessing customer channel service needs and company channel objectives and constraints

2.) identification of the major channel alternatives

(second step) in terms of the types, number of, and channel responsibilities of intermediaries

channel members perform

*contact work* (finding and communicating with prospective buyers) and *matching work* (shaping and fitting the offer to the buyer's needs). They enter into *negotiation* to reach an agreement on price and other terms of the offer so that ownership can be transferred

channel alternatives must be evaluated according to

*economic*, *control*, and *adaptive* criteria

other functions of marketing channels including helping to fulfill the completed transactions by offering

*physical distribution* (transporting and storing goods), *financing* (acquiring and using funds to cover the costs of channel work), and *risk-taking* (assuming the risks of carrying out the channel work

three of the most important trends are the growth of

*vertical*, *horizontal*, and *multichannel* marketing systems

marketing logistics involves

- inbound logistics - outbound logistics - reverse logistics

4 major functions of mktg logistics

- warehousing - inventory management - transportation - logistics information management

the four major functions of marketing logistics

- warehousing - inventory management - transportation - logistics information management

when selecting intermediaries, the company should evaluate each channel member's

- years in business - other lines carried - location - growth and profit record - cooperativeness - reputation

4 steps *in order* to designing mktg channels

1) analyze consumer needs 2) set channel objectives 3) identify major channel objectives 4) evaluate the alternatives

in designing mktg channels, companies must determine number of channel members to use at each elevel

3 strategies available: - *intensive* distribution - *exclusive* distribution - *selective* distribution

marketing logistics is

an area of potentially high cost-savings and improved customer satisfaction

channel organization

are dependent on each other for the overall success of the channel

when assigning functions to channel members, it is important to

assign functions to channel members that can add the most value for the cost

distribution channels are complex ________ in which people and companies interact to accomplish individual, company, and channel goals

behavioral systems

horizontal mktg system

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

conventional distribution channel

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

Marketing channels perform many key functions. Some help ________ by gathering and distributing information needed for planning and aiding exchange as well as developing and spreading persuasive ________ about an offer

complete transactions; communications

contractual vertical mktg system

consists of independent firms at different levels of production and distribution joining together through contracts

*vertical* mktg system (VMS)

consists of producers, wholesalers, and retailers acting as a unified system types: - corporate - contractual - administered

administered vertical mktg system

coordinates successive stages of production and distribution through the size and power of one of the parties

disintermediation

cutting out of mktg channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries

integrated logistics management

emphasizes teamwork - both inside the company and mont all the mktg channel organizations - to maximize the performance of the entire distribution system

exclusive distribution

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

third-party logistics

independent logistics provider that performs any or all of the functions required to get a client's product to market

mktg logistics

involves *inbound*, *outbound*, and *reverse* logistics planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customers' requirements at a proft

channel level

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

supply chain management

managing the upstream and downstream value - added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers

direct mktg channel

no intermediary level

Most producers use intermediaries by forging a marketing channel (or distribution channel) to bring products and serves to the consumer or business user. They do this because

of the intermediaries' contacts and experience, specialization, and scale of operation

indirect mktg channel

one or more intermediary levels

in managing channels, a company must convince suppliers and distributors that they can succeed better by working together as

part of a cohesive value delivery system

most companies today see their intermediaries as​ first-line customers and focus on​ ________ to forge​ long-term relationships with channel members

partner relationship management

using mktg channel intermediaries means

producers give up some control over how and to whom they sell their products

new types of channel organizations have appeared that

provide stronger leadership and improved performance

integrated supply chain management concept

recognizes that improved logistics requires teamwork in the form of close working relationships across functional areas inside the company and across various organizations in the supply chain

multichannel mktg

selecting, managing, and motivation individual channel members and evaluating their performance over time

when channel members cooperate, the can more effectively

sense, serve, and satisfy the *target* market

marketing channel

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

intensive distribution

stocking the product in as many outlets as possible

producers vary in their ability

to attract qualified mktg intermediaties

to ensure channel success, all channel firms should

understand and accept their roles, coordinate their goals and activities, and cooperate to attain overall channel goals

selective distribution

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

a multichannel distribution system

uses a single firm to set up two or more mktg channels to reach one or more customer segmentations