Ch.15 Managing Marketing Channels and Supply Chains

Vertical Marketing Systems

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

Channel Conflict

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

Supply Chain

consists of a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users.

Total Logistics Cost

consists of the expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return products handling.

Logistics

consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.

Dual Distribution

involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.

Disintermediation

involves channel conflict that arises when a channel member bypasses another member and sells or buys products direct.

Multichannel Marketing

involves 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.

Reverse Logistics

is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal.

Vendor-Managed Inventory (VMI)

is 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.

Customer Service

is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.

Bullwhip Effect

is the tendency for supply chain managers at different levels of the supply chain to exaggerate the need to increase or decrease inventory in response to variation or lack of predictability in customer demand.

Selective Distribution

a level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products.

Intensive Distribution

a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.

Exclusive Distribution

a level of distribution density whereby only one retailer in a specific geographical area carries the firm's products.