Chapter 11 Marketing Channels. Marketing an introduction. Armstrong, Kotler, Trifts, Buchwitz
Contractual VMS
A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone.
Corporate VMS
A vertical marketing system that combines successive stages of production and distribution under single ownership—channel leadership is established through common ownership
Administered VMS
A vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties
Marketing channel (or distributing channel)
FedEx works interdependently with other companies to make their product or service available for use or consumption by the consumer or business user
Multichannel distribution system (or hybrid marketing channel)
Fidelity Investments uses telephones, the internet, and branch offices as different marketing channels to reach one or more customer segments
Indirect marketing channel
On campus classes requires people to maintain buildings and coordinate room and teaching schedules. These intermediaries perform work to bring the product (class) to the student
Channel conflict
Tupperware in-home consultants and Target are conflicting intermediaries who work to bring the Tupperware product to its consumers
Horizontal marketing system
A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
Conventional distribution channel
A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole
Franchise organization
A contractual vertical marketing system in which a channel member, called a franchiser, links several stages in the production-distribution process
Vertical marketing system (VMS)
A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them or has so much power that they all cooperate.
Multichannel distribution system (or hybrid marketing channel)
A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
Distribution center
A large, highly automated Wal-Mart storage center receives goods from various plants and suppliers. Then, it uses laser scanners, conveyer belts, and thousands of workers to fill orders for and deliver goods to hundreds of Wal-Mart retailers so that the customers can get the goods as quickly as possible
Distribution center
A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible
Channel level
A layer of intermediaries that performs some work bringing the product and its ownership closer to the final buyer
Indirect marketing channel
A marketing channel that contains one or more intermediary levels
Direct marketing channel
A marketing channel that has no intermediary levels
Marketing channel (or distributing channel)
A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user
Third-party logistics (3PL) provider
An independent logistics provider that performs any or all of the functions required to get its client's product to market
Direct marketing channel
An online class delivers the product (class) directly to the student with no intermediary levels
Intensive distribution
Coca-Cola sells its products in a wide variety of outlets, such as grocery stores, convenience stores, gas stations, hardware stores, office supply stores, restaurants and vending machines.
Intermodal transportation
Combining two or more modes of transportation
Channel conflict
Disagreement among marketing channel members on goals and roles—who should do what and for what rewards
Third-party logistics (3PL) provider
For Jockey International, UPS manages a warehouse, fills internet orders, boxes them, provides truck drivers to ship goods, and phone representatives to handle problems. In short, UPS provides many, if not all of the functions required to get its client's product to market
Franchise organization
Ford has a network of dealers. Coca Cola licenses bottlers. Individual managers run McDonald restaurants.
Exclusive distribution
Giving a limited number of dealers the exclusive right to distribute the company's products in their territories
Selective distribution
KitchenAid, Maytag, Whirlpool, and General Electric will not sell their products through every retailer who is willing to carry their product. Instead, they use dealer networks and a few large retailers.
Corporate VMS
Kroger the factories that produce and the stores that sell many of its products
Exclusive distribution
Luxury car markets, such as Bentley, sell exclusively through a limited number of retailers.
Supply chain management
Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
Value delivery network
Palm manages a whole community of suppliers, assemblers, resellers, and complementors who must work effectively together to make life easier from Palm's customers
Disintermediation
People used to buy flowers from stores or street vendors. However, radical new types of intermediaries, such as 1-800 numbers and internet sites, have displaced many of the traditional resellers.
Administrative VMS
Some manufactures, like Proctor & Gamble, are large enough and powerful enough to influence their resellers. Retailers, like Barnes & Noble, are large enough and powerful enough to influence their manufacturers.
Intensive distribution
Stocking the product in as many outlets as possible
Disintermediation
The displacement of traditional resellers from a marketing channel by radical new types of intermediaries
Integrated logistics management
The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations, to maximize the performance of the entire distribution system
Value delivery network
The network made up of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system.
Marketing logistics (physical distribution)
The tasks involved in planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit
Selective distribution
The use of more than one, but fewer than all, of the intermediaries who are willing to carry the company's product
Horizontal marketing system
When McDonald's set up "express" restaurants in Wal-Mart stores, two companies joined together at one level to make new marketing opportunities.
Intermodal transportation
piggyback shipping, using both rails and trucks to ship products, is cheaper than straight trucking, but more flexible than just using trains.
