Chpt 10
1.) channel design
(first step) begins with assessing customer channel service needs and company channel objectives and constraints
2.) identification of the major channel alternatives
(second step) in terms of the types, number of, and channel responsibilities of intermediaries
channel members perform
*contact work* (finding and communicating with prospective buyers) and *matching work* (shaping and fitting the offer to the buyer's needs). They enter into *negotiation* to reach an agreement on price and other terms of the offer so that ownership can be transferred
channel alternatives must be evaluated according to
*economic*, *control*, and *adaptive* criteria
other functions of marketing channels including helping to fulfill the completed transactions by offering
*physical distribution* (transporting and storing goods), *financing* (acquiring and using funds to cover the costs of channel work), and *risk-taking* (assuming the risks of carrying out the channel work
three of the most important trends are the growth of
*vertical*, *horizontal*, and *multichannel* marketing systems
marketing logistics involves
- inbound logistics - outbound logistics - reverse logistics
4 major functions of mktg logistics
- warehousing - inventory management - transportation - logistics information management
the four major functions of marketing logistics
- warehousing - inventory management - transportation - logistics information management
when selecting intermediaries, the company should evaluate each channel member's
- years in business - other lines carried - location - growth and profit record - cooperativeness - reputation
4 steps *in order* to designing mktg channels
1) analyze consumer needs 2) set channel objectives 3) identify major channel objectives 4) evaluate the alternatives
in designing mktg channels, companies must determine number of channel members to use at each elevel
3 strategies available: - *intensive* distribution - *exclusive* distribution - *selective* distribution
marketing logistics is
an area of potentially high cost-savings and improved customer satisfaction
channel organization
are dependent on each other for the overall success of the channel
when assigning functions to channel members, it is important to
assign functions to channel members that can add the most value for the cost
distribution channels are complex ________ in which people and companies interact to accomplish individual, company, and channel goals
behavioral systems
horizontal mktg system
channel arrangement in which two or more companies at one level join together to follow a new mktg opportunity
conventional distribution channel
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
Marketing channels perform many key functions. Some help ________ by gathering and distributing information needed for planning and aiding exchange as well as developing and spreading persuasive ________ about an offer
complete transactions; communications
contractual vertical mktg system
consists of independent firms at different levels of production and distribution joining together through contracts
*vertical* mktg system (VMS)
consists of producers, wholesalers, and retailers acting as a unified system types: - corporate - contractual - administered
administered vertical mktg system
coordinates successive stages of production and distribution through the size and power of one of the parties
disintermediation
cutting out of mktg channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries
integrated logistics management
emphasizes teamwork - both inside the company and mont all the mktg channel organizations - to maximize the performance of the entire distribution system
exclusive distribution
giving a limited number of dealers the exclusive right to distribute the company's products in their territories
third-party logistics
independent logistics provider that performs any or all of the functions required to get a client's product to market
mktg logistics
involves *inbound*, *outbound*, and *reverse* logistics planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customers' requirements at a proft
channel level
layer of intermediaries that performs some of the work in bringing the product and its ownership closer to the final buyer
supply chain management
managing the upstream and downstream value - added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers
direct mktg channel
no intermediary level
Most producers use intermediaries by forging a marketing channel (or distribution channel) to bring products and serves to the consumer or business user. They do this because
of the intermediaries' contacts and experience, specialization, and scale of operation
indirect mktg channel
one or more intermediary levels
in managing channels, a company must convince suppliers and distributors that they can succeed better by working together as
part of a cohesive value delivery system
most companies today see their intermediaries as first-line customers and focus on ________ to forge long-term relationships with channel members
partner relationship management
using mktg channel intermediaries means
producers give up some control over how and to whom they sell their products
new types of channel organizations have appeared that
provide stronger leadership and improved performance
integrated supply chain management concept
recognizes that improved logistics requires teamwork in the form of close working relationships across functional areas inside the company and across various organizations in the supply chain
multichannel mktg
selecting, managing, and motivation individual channel members and evaluating their performance over time
when channel members cooperate, the can more effectively
sense, serve, and satisfy the *target* market
marketing channel
set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
intensive distribution
stocking the product in as many outlets as possible
producers vary in their ability
to attract qualified mktg intermediaties
to ensure channel success, all channel firms should
understand and accept their roles, coordinate their goals and activities, and cooperate to attain overall channel goals
selective distribution
use of more than one but fewer than all intermediaries who are willing to carry the company's products
a multichannel distribution system
uses a single firm to set up two or more mktg channels to reach one or more customer segmentations