marketing ch 10

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three types of channel conflict

1. horizontal conflict 2. vertical conflict 3. multi-channel, hybrid, or intertype

pop-up stores

A retail store that is opened temporarily to take advantage of a trend or a seasonal product. Demand for products sold in pop-up retail is typically short-lived

manufacturer sponsored wholesaler example

Coke licenses bottlers in various markets who can bottle and sell the finished product to retailers locally

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, perhaps even at the expense of profits for the system as a whole

multichannel distribution system

a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments (ex. John Deere)

Corporate VMS

a vertical marketing system that combines successive stages of production and distribution under single ownership (ex. Kroger owns 39 manufacturing plants); resolves conflict through ownership

manufacturer sponsored retailer example

car dealerships

vertical channel conflict

conflict between different levels of the same channel (ex. KFC franchisees don't like new KFC decision)

supply chain

consists of upstream and downstream partners to produce a product and make it available to buyers

indirect channel

containing one or more intermediary levels

disintermediation

cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones (ex. Barnes & Noble vs. online booksellers and e-books)

service retailer example

fast food; franchisee operated restaurants

exclusive distribution

giving a limited number of dealers the exclusive right to distribute the company's products in their territories (ex. Breitling watches)

contractual VMS

independent firms at different levels join together through contracts (franchise organization is most common type); resolves conflict through legal contracts

functions of distribution channels

information, promotion, contact, matching, negotiation, physical distribution, financing, risk taking

3 levels of distribution intensity

intensive distribution, selective distribution, exclusive distribution

three types of franchises

manufacturer sponsored retailer, manufacture sponsored wholesaler; service

value delivery network

network composed of the company, suppliers, distributors, and ultimately customers who partner to help the entire system deliver better customer value

direct marketing channel

no intermediary levels; company sells directly to consumers (ex. Mary Kay)

horizontal channel conclict

occurs among the same level of the channel (ex. Holiday Inn franchiser complaining about other Holiday Inn operators)

Vertical Marketing System (VMS)

producers, wholesalers, and retailers act as a unified system to accomplish the work of a channel; one channel member owns the others, has contracts with them, or has so much power that they all cooperate

why do companies use VMS?

provide channel leadership; to resolve conflict

reverse distribution

recall, error in order, repair, reuse, recycling, refurbish, customer returns

marketing or distribution channel

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

intensive distribution

stocking the product in as many outlets as possible

administered VMS

system that coordinates successive stages of production and distribution through the size and power of one of the parties; resolves conflict through channel captain- power

selective distribution

the use of more than one but fewer than all of the intermediaries that is willing to carry the company's products; in between intensive and exclusive distribution

Horizontal Marketing System

when two or more companies at one level join together to follow a new marketing opportunity (ex. express McDonalds in Walmart stores)


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