MKT 3311 Principles of Marketing chapter 15

Marketing channels

(also called a "channel of distribution" or "distribution channel") is a group of individuals and organizations that direct the flow of products from producers to customers.

Channel conflict

Channel members work toward the same goals, but may disagree on the best methods for attaining goals.

horizontal channel integration

Combining organizations at the same level of operation under one management

Marketing channels utilities for consumers

Time utility, Place utility—

Supply chain management

a set of approaches used to integrate the functions of operations management, logistics management, supply management and marketing channel management so products are produced and distributed, in the right quantities to the right locations and at the right time.

Intensive distribution

all available outlets for distributing a product are used.

manufacturer's agent

an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions.

Railroads

carry heavy, bulky freight that must be shipped long distance over land.

Form utility

channel members sometimes create form utility by assembling, preparing, or refining the product to suit individual customer needs.

Vertical channel integration

combines two or more stages of the channel under one management.

Time utility

created by having products available when the customer wants them

Place utility—

created by making products available in locations where customers wish to purchase them

Industrial distributor

facilitates exchanges between the producer and customer.

Leadership

may be a producer, wholesaler, or retailer.

Exclusive distribution

only one outlet is used in a relatively large geographic area.

Selective Distribution

only some available outlets in an area are chosen to distribute a product.

Trucks

provide the most flexible schedules and routes of all major transportation modes. Trucks are often used with other modes of transportation.

Power

the ability to influence another channel member's goal achievement.

Waterways

the cheapest method of shipping heavy, low-value, non-perishable goods such as ore, coal, grain and petroleum products.

Possession utility

the customer has access to the product to use or to store for future use

Air Transportation

the fastest but most expensive form of shipping. It is used most often for perishable goods; for high-value, low bulk items; and for products requiring quick delivery over long distances, such as emergency shipments.

Pipelines

the most automated transportation mode, usually belong to the shipper and carry the shipper's products. Most pipelines carry petroleum products or chemicals.

Dual Distributor

the use of two or more marketing channels for distributing the same products to the same target market. This can cause dissatisfaction among wholesalers and smaller retailers when they must compete with large retail chains that make direct purchases from manufacturers.