Marketing Chapter 12
Vertical Marketing System (VMS)
A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the other, has contracts with them, or has so much power that they all cooperate.
Marketing Channels
A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business users. Responsible for transferring ownership to the consumer(basically a retailer).
Indirect Marketing Channels
Contain one or more intermediaries between manufacturer and consumer
Dual Distribution System
Firm sets up two or more marketing channels to reach TWO or more customer segments
________ organizations are a common form of contractual vertical marketing system
Franchise
Integrated logistics management
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
Logistics Information Management
Management of the flow of information, including customer orders, billing, inventory levels, and customer data
Channel Choice Factors
Market Environment, Consumer Behavior, Product Characteristics, Company Characteristics
Marketing Logistics (physical distribution)
Planning, implementing, and controlling the physical flow of goods, services, and related info from points of origin to points of consumption to meet customer requirements at a profit
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 in delivering customer value
Horizontal Marketing Systems (strategic alliance)
Two or more independent companies at one level join together to follow a new marketing opportunity.
Direct marketing channels
Type of marketing channel that has no intermediary levels between the manufacturer and the customer
Administered VMS
VMS in which leadership is assumed by a channel captain who has the size and power to dominate the channel
Corporate VMS
VMS that combines successive stage of production and distribution under single ownership. Channel leadership is established via common ownership.
Contractual VMS
Vertical Marketing system in which independent firms at different levels of production/distribution join together through contracts to obtain more economies of scale than they could alone. Franchises are the most common form of these.
4 Basic Logistic Functions
Warehousing, Inventory management, Logistics information management, transportation
Reverse Logistics
a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal. So...recycling.
VMI (vendor-managed inventory)
an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.
EDI (electronic data interchange)
combines proprietary computer and telecommunication technologies to exchange electronic invoices, payments, and info among suppliers, manufacturers, and retailers
Total logistics cost
consists of expenses associated with transportation, materials handling and warehousing, inventory, order processing, etc.
Conventional distribution channel
consists of one or more independent producer, wholesaler, retailer, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole
Multichannel Distribution System
occurs when a firm blends communication and delivery channels to mutually reinforce each other in reaching one market. Ex: Internet+retail stores
Disintermediation
occurs when a product or service producers cut out traditional intermediaries or displace resellers with radical new types of intermediaries
Exclusive dealing
when the seller requires that the sellers not handle competitor's products