ch. 15 channel strategy

1. merchant wholesalers

-independent distributors who take legal possession, or title, of the goods they distribute 1. distributor (general merch) 2. jobber (limited merch, does not perform all the functions)

dual distribution

both direct and indirect channels

3. administered vertical marketing system

use the size and influence of one channel member to coordinate successive stages of production and distribution

strategic channel alliances

when one firm's marketing channel is used to sell another firm's products

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

arm's-length relationship

a relationship between companies that is loose, characterized by low relational investment and trust, and usually taking the form of a series of discrete transactions with no or low expectation of future interaction or service

direct channels

- a marketing channel where a producer and ultimate consumer interact directly with one another - disintermediation - direct mail, website, telephone

indirect channels

- channel members often work with competitors, which can create a channel conflict

1. corporate vertical marketing system

- combine stages of production and distribution - increases capital investment and FC

3. vertically integrated channel

- company owns more than one channel member 1. forward - toward the consumer 2. backward - toward the manufacturer

2. agents

- don't take title of goods - no physical possession 1. manufacturer's agents - work for several producers 2. selling agents - represent a single producer 3. brokers - ind. firms who brings sellers and buyers together

1. logistical

- getting the right amount to the right place, time, and at the lowest possible price - reduce bullwhip - inventory costs

wholesalers

- intermediaries who buy from producers or from other wholesalers and sell to retailers 1. merchant wholesalers 2. agents 3. manufacturer-owned wholesalers

1. contractual channel

- legal agreement - franchising

1. time

- order cycle or replenishment - minimize lead time

3. facilitating

- product movement through the channel - financing: department stores offering their own cards - market research: how to improve and which products should be introduced

2. transactional

- selling, very risky because retailers do not know if they will resell what the bought

inventory costs

1. assorting 2. transporting 3. warehousing and materials 4. order processing (electronic data interchange) 5. inventory management

retailers channel types

1. contractual channel 2. administered channel 3. vertically integrated channel

types of channels

1. direct channels 2. indirect channels

FTC, sherman, and clayton

1. dual distribution 2. vertical integration 3. exclusive dealing 4. tying arrangements - full line forcing 5. refusal to deal 6. resale restrictions

channel captain

1. economic influence 2. expertise 3. identification 4. legitimate influence

degree of channel coverage

1. intensive: offers low cost product everywhere (vending machine) 2. selective: target specific areas and market segments 3. exclusive: add an element of prestige

intermediary functions

1. logistical 2. transactional 3. facilitating

3. manufacturer-owned wholesalers

1. manufacturer's sales branch: carries inv. and performs functions 2. manufacturer's sales office: DOES NOT carry inventory

customer service concept

1. time 2. dependability 3. communication 4. convenience

channel strategy

1. time utility: convenience, speed 2. place utility: convenience (easily accessible), prestige

types of channel members

1. wholesalers 2. retailers

3. communication

anticipate future needs

2. administered channel

handshake

marketing channel

individuals and firms involved in the process of making a product or service available for use or consumption

intermediaries provide...

info, convenience, variety, pre and post sale services

4. convenience

minimal effort between buyer and seller

vertical marketing systems

professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact 1. corporate 2. contractual 3. administered

2. dependability

replenishment is safe, complete, and consistent

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

supply chain management

the integration and organization of info and logistical activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers -from raw materials to finished products

bullwhip effect

the tendency to exaggerate the need to increase and decrease inventory in response to variation in customer demand