MKTG exam 4
What is the significant of marketing channels (5) side note: least flexible
1. make products available at the right time, at the right place, in the right quantities.2. they can have a strong influence on the other elements of the marketing mix (i.e., product, promotion, and pricing)3. they determine a product's market presence and accessibility4. create utility5. facilitate exchange efficiencies
Supply Chain
All the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer
Administered VMS
channel members are independent, but informal coordination achieves a high level of interorganizational management
3 types of vertical management systems
corporate, administered, contractual
Electronic Data Interchange (EDI)
A computerized means of integrating order processing with production, inventory, accounting, and transportation
Marketing channel
A group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
Just-in-time (JIT)
An inventory-management approach in which supplies arrive just when needed for production or resale
channel integration
Channel members can either combine and control activities or pass them to another channel member. Channel functions may be transferred between intermediaries and producers, even to customers. Various channel stages may be combined, either horizontally or vertically, under the management of a channel captain. Such integration may stabilize supply, reduce costs, and increase channel member coordination.
3 levels of intensity of market coverage
Intensive, Selective, and Exclusive Distribution
channel power
The ability of one channel member to influence another member's goal achievement
Product attributes in the marketing channels
The attributes of the product can have a strong influence on the choice of marketing channels. Marketers of complex and expensive products (like automobiles) will likely employ short channels, as will marketers of perishable products (such as dairy and produce). Less-expensive standardized products with long shelf lives, such as soft drinks and canned goods, can go through longer channels with many intermediaries. Fragile products that require special handling are likely to be distributed through short channels to minimize the amount of handling and risk of damage. Firms that desire to convey an exclusive image for their products may wish to limit the number of outlets available. Product attributes in the marketing channels
channel captain
The dominant leader of a marketing channel or a supply channel
Corporate VMS
combines all stages of the marketing channel, from producers to consumers, under a single owner.
stockouts
shortages of products that can result in loss of customers
Who are the members of supply chain? (5)
suppliers, manufacturers, distributors, retailers, customers
contractual VMS
the most popular type of vertical marketing system. Channel members are linked by legal agreements spelling out each member's rights and obligations. Franchise organizations, such as McDonald's and KFC. Others include wholesaler-sponsored groups, such as IGA stores, in which independent retailers band together under this leadership of a wholesaler.
Intensity of market coverage
the number and kinds of outlets in which a product will be sold. This decision depends on the characteristics of the product and the target market. To achieve the desired intensity of market coverage, distribution must correspond to behavior patterns of buyers. In considering products for purchase, consumers take into account such factors as replacement rate, product adjustment (services), duration of consumption, and time required to find the product.These variables directly affect the intensity of market coverage.