Chapter 15

information

a buyer requirement when buyers have limited knowledge to desire specific data about a product or a service

variety

a buyer requirement; reflects buyers' interest in having numerous competing and complementary items from which to choose; evident in the depth and breadth of products

convenience

a buyer requirement; that limits the hassle of purchasing the product and can include form or proximity

channel captain

a channel member that coordinates, directs, and supports other channel members: example: P&G with its tide, crest, and pampers channel

franchising

a contractual arrangement between a parent company (a franchisor) and an individual or firm (franchisee) that allows the franchisee to operate a certain type of business under the established name and under the specific rules

dealer

a more imprecise term that distributor that can mean the same as distributor, retailer, wholesaler, and so forth

direct channel

a producer and ultimate consumer deal directly with each other

backward integration

a retailer may own a manufacturing operation; example: Kroger makes their own brand for everything produced: asprin, Mac & cheese

administered vertical marketing system

achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership

direct marketing channels

allows consumers to buy products by interacting with various advertising media without a face-to face meeting with a salesperson; examples: mail-order; catalog, telemarketing, home shopping

dual distribution

an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product; examples: Hallmark is sold in Hallmark stores and then in select discount and drugstores

distributor

an imprecise term, usually used to describe intermediaries who perform a variety of distribution functions, including, selling, maintaining inventories, extending credit, and so on; a more common term in business markets but may also be used to refer to wholesalers

retailer

an intermediary who sells to consumers

wholesaler

an intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets

middleman

any intermediary between manufacturer and end-user markets

agent or broker

any intermediary with legal authority to act on behalf of the manufacturer; their role is to bring buyer and seller together

brokers

are independent firms or individuals whose principal function is to bring buyers and sellers together to make sales

channel conflict

arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals

logistical functions

assorting, storing, sorting, transporting

pre or postsale services

buyer requirement; provided by intermediaries include repair, delivery, installation, and warranty

manufacturer's branch office

carries a producer's inventory and performs the functions of a full-service wholesaler

economic, expertise, identification, legitimate right

channel influences

corporate vertical marketing system

combination of successive stages of production and distribution under a single ownership

disintermediation

conflict that arises when a channel member bypasses another member and sellers or buys products directly

vertical conflict

conflict that occurs between different level in a marketing channel; example: between a manufacturer and a wholesaler or retailer or between a wholesaler and a retailer

horizontal conflict

conflict that occurs between intermediaries at the same level in a marketing channel; example: between two retailers like Target and KMart

channel partnership

consists of agreements and procedures among channel members for ordering and physically distributing a producer's products through the channel to the ultimate consumer

marketing channel

consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users

manufacturer's sales office

does not carry inventory, typically performs only a sales function, and serves as an alternative to agents and brokers

electronic marketing channels

employ the internet to make goods and services available for consumption or use by consumers or business buyers

form utility

enhancing a product or service to make it more appealing to buyers

possession utility

entails efforts by intermediaries to help buyers take possession of a product or service, such as having airline tickets delivered by a travel agent

manufacturer-sponsored wholesale systems

exist in the soft-drink industry where Pepsi-Cola licenses wholesalers (bottlers) that purchase concentrate from Pepsi-Cola and then carbonate, bottle, promote, and distribute its products to retailers and restaurants

service-sponsored franchise systems

exist when franchisors license individuals or firms to dispense a service under a trade name and specific guidelines; examples: H&R Block

exclusive distribution

extreme opposite of intensive distribution because only one retailer in a specified geographical area carries the firm's products

environmental, consumer, product, company

factors affecting channel choice and management

facilitating functions

financing, grading (inspections, testing), marketing information and research

time utility

having a product or service when you want it

contractual vertical marketing system

independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone

merchant wholesalers

independently owned firms that take title to the merchandise they handle

indirect channels

intermediaries are inserted between the producer and consumers and perform numerous other functions; one or more intermediaries to reach industrial users

transactional functions

involves buying, selling, and risk taking

place utility

means a product or service available where consumers want it

selective distribution

means that a firm selects a few retailers in a specific geographical area to carry its production

intensive distribution

means that a firm tries to place its products and services in as many outlets as possible

types of marketing intermediaries

middleman, agent or broker, wholesaler, retailer, distributor, dealer

density

number of stores in a geographical area

strategic channel alliances

one firm's marketing channel is used to sell another firm's products; example: Kraft Foods distributes Starbucks in supermarkets

industrial distributor

performs a variety of marketing channel functions, including selling, stocking, delivering a full product assortment, and financing

forward integration

producer might own the next intermediary down; example: Ralph Lauren owns their retail stores and production

vertical marketing systems

professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact

manufacturer-sponsored retail franchise systems

prominent in the automobile industry, where a manufacturer such as Ford licenses dealers to sell its cars subject to various sales and service conditions

service-sponsored retail franchise systems

provided by firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others; examples: Holiday Inn, Avis, and McDonalds

selling agents

represent a single producer and are responsible for the entire marketing function of that producer

multichannel marketing

the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online; example: Victoria Secret- online, catalog, in-store

basic functions of intermediaries

transactional functions, logistical functions, facilitating functions

limited-service wholesaler

type of merchant wholesaler; cash-and-carry, truck, drop shipper, mail-order

full-service wholesaler

type of merchant wholesaler; general-merchandise, limited-line, specialty-line

manufacturer's agent

work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory