Chapter 12 Principles of Marketing

Inbound logistics

Moving products and materials from suppliers to the factory.

Outbound logistics

Moving products from the factory to resellers and ultimately to customers.

Horizontal conflict

Occurs among first at the same level of the channel

Marketing logistics (physical distribution)

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.

Negotiation

Reaching an agreement on price and other terms so that ownership or possession can be transferred.

Reverse logistics

Reusing, recycling, refurbishing, or disposing of broken, unwanted, or excess products returned by consumers or resellers.

Marketing channel management

Selecting, managing and motivating individual channel members and evaluating their performance over time.

Matching

Shaping offers to meet the buyer's needs, including activities such as manufacturing, grading, assembling, and packaging.

Customer-centered logistics

Starts with the marketplace and works backwards to the factory or even to sources of supply

Intensive distribution

Stocking the product in as many outlets as possible.

Disintermediation

The cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers 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.

Selective distribution

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

Physical distribution

Transporting and storing goods

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 procedures, 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.

Vertical marketing system (VMS)

A 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.

Franchise Orgainization

A contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production - distribution process.

Multichannel distribution system

A distribution system in which a single firm sets up two or more marketing channels o reach one or more customer segments.

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 in bringing the product and its ownership closer to the final buyer .

Indirect marketing channel

A marketing channel containing one or more intermediary levels.

Direct marketing channel

A marketing channel that has no intermediary levels.

Value delivery network

A network composed of the company, suppliers, distributors, and ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value.

Marketing channel (distribution channel)

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

Contractual VMS

A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts.

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 through the size and power of one of the parties.

Financing

Acquiring and using funds to cover the costs of the channel work.

Third-party logistics (3PL) provider

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

Risk taking

Assuming the risks of carrying out the channel work

Multimodal transportation

Combining two or more modes of transportation.

Vertical conflict

Conflict between different levels of the same channel, is even more common,

Marketing channel design

Designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

Promotion

Developing and spreading persuasive communications about an offer.

Channel conflict

Disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards.

Contact

Finding and engaging prospective buyers

Information

Gathering and distributing information about consumers, producers, and other actors and forces in the marketing environment needed for planning and aiding exchange.

Exclusive distribution

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

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.