Marketing chapter 10

thirds party logistics

3pl) provider: an independent logistics provider that performs any or all of the functions required to get a client's product to the market. (UPS)

Horizontal marketing system

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity

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.

Corporate Vertical Marketing System

A vertical marketing system that combines successive stages of production and distribution under single ownership- channel leadership is established through common ownership (basically channel in which members at different levels work together in unified way to accomplish the work of the channel)

Administered VMS

A vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties.

Contractual VMS

Contractual VMS: a vertical marketing system in which independent firms at different levels of production and distribution going together through contracts

Supply Chain Management

Managing upstream and downstream value-added flows of material, final goods, and related information among suppliers, the company, resellers and final consumers.

Intensive distribution

Stocking the product in as many outlets as possible

How channel members interact and how they organize and perform the work of the channel

The channel will be most effective when each member does the role they do best since they each play a specialized role. Can be difficult when there is channel conflict, disagreement over who should do what and for what rewards. Horizontal conflict - occurs among firms at the same level of the channel. Vertical Conflict - conflict between different levels of the same channel. success of individual channel members depends on overall channel success. Large companies have a formal organization system where roles and leadership are provided, but in independent companies that's not the case

Marketing Delivery channels

Value Delivery Network Marketing Channel Channel Level Direct marketing channel Indirect Marketing Channel

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.

Vertical marketing system

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 organization

a contractual vertical marketing system in which a channel member, called a franchisor, links several stages in the production distribution process. (Almost every type of business is has been franchised

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

Marketing channel

a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. Producers use intermediaries to bring their products to the market through a marketing channel. Intermediaries can offer the firm contacts, experience, specialization. Channel members bring information, promotion, contact, matching, and negotiation to the chain.

Exclusive distribution

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

Horizontal conflict

occurs among firms at the same level of the channel

Marketing logistics

planning, implementing, and controlling the physical flow of materials, fine goods, and related information from points of origin to points on consumption to meet customer requirements at a profit.

Marketing channel management

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

Disintermediation

the cutting out of marketing channel intermediary by product or service producers or the displacement of traditional resellers by radical new types of intermediaries (like online purchasing: ex. iTunes putting music stores out of business)

Value Delivery Network

is made up of the company, suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system . In order to create customer value, a company can't go it alone. they need a value delivery network to accomplish this. Individual companies don't compete, their entire value delivery networks do

Integrated Logistics management

the logistics concept that emphasizes team work both insist the company and among the marketing channel organizations, to maximize the performance of the entire distribution system

Multimodal transportation

combining two or more modes of transportation

Marketing channel design

Designing effective marketing channel by analyzing customer needs, setting channel objectives identifying major channel alternatives and evaluating those alternatives consumer needs: what the target consumers want from the channel Channel objectives: identify several segments wanting different levels of service. The company should decide which segments to serve and the best channels to use in each case. In each segment, the company wants to minimize the total channel cost of meeting customer service requirement Identifying major alternatives: terms of the types of intermediaries, the number of intermediaries, and the responsibilities of each channel member.

channel conflict

disagreements among marketing channels members on goals, goals and rewards- who should do what and for what rewards. Horizontal conflict: occurs among firms at the same level of channel vertical conflict: conflict between different levels of the same channel, is even more common

Multichannel distribution system

in which a single firm its up two or more marketing channels to reach one or more customer segments

identify major channel alternatives to a company

marketing channels face continuous change channel design begins with assessing customer channel service needs and company channel objectives and constraints the company then identifies the major channel alternatives in terms of the types of intermediaries, the number of intermediaries(intensive, exclusive, and selective distribution), and the channel responsibilities of each (price policies, conditions of sale, specific services)

discuss the nature and importance of marketing logistics and integrated supply chain management

marketing logistics is an area of potentially high cost savings and improved customer satisfaction outbound, inbound, and reverse logistics involves entire supply chain management no logistics system can both maximize customer service and minimize distribution costs instead, the goal is to provide a targeted level of service at the least cost major logistics functions: warehousing, inventory management, transportation and logistics information management companies can achieve logistics harmony among functions by creating cross-functional logistics teams, integrative supply manager positions,

Vertical conflict

occurs between different levels of the SAME channel

explain how companies select, motivate, and evaluate channel members

producers vary in their ability to attract qualified marketing intermediaries some have a hard time, others don't when selecting intermediaries, the company should evaluate each channel member's qualifications and select those that fit best with its channel objectives once selected, the company must sell not only through the intermediaries but also with them. forge strong partnerships with channel members to create a marketing systems that meets the needs of both the manufacturers and the partners

Selective distribution

the use of more than one but fewer than all of intermediaries that are willing to carry companies products