Chapter 14: Marketing Channels and Supply-Chain Management

Electronic data interchange (EDI)

A computerized means of integrating order processing with production, inventory, accounting, and transportation

Marketing channel

A group of individual and organizations that direct the flow of products from producers to customers within the supply chain

Vertical marketing system (VMS)

A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers

Supply-chain management

A set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and at the right time

Exclusive dealing

A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers

Physical distribution

Activities used to move products from producers to consumers and other end users

Supply chain

All the activities associated with the flow and transformation of products from raw materials through to the end customer

tying agreement

An agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well

Strategic channel alliance

An agreement whereby the products of one organization are distributed through the marketing channels of another

Industrial distributor

An independent business organization that takes title to industrial products and carries inventories

Just-in-time (JIT)

An inventory-management approach in which supplies arrive just when needed for production or resale

Horizontal channel integration

Combining organizations at the same level of operation under one management

Vertical channel integration

Combining two or more stages of the marketing channel under one management

Private warehouses

Company-operated facilities for storing and shipping products

Inventory management

Developing and maintaining adequate assortments of products to meet customers' need

Megacarriers

Freight transportation firms that provide several modes of shipment

Supply managment

In its broadest form, refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition

Distribution centers

Large, centralized warehouses that focus on moving rather than storing goods

Marketing intermediaries

Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products

Freight forwarders

Organizations that consolidate shipments from several firms into efficient lot sizes

Material handling

Physical handling of tangible goods, supplies, and resources

Logistics management

Planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants

Public warehouses

Storage space and related physical distribution facilities that can be leased by companies

Channel power

The ability of one channel member to influence another member's goal achievement

Distribution

The decisions and activities that make products available to customers when and where they want to purchase them

Warehousing

The design and operation of facilities for storing and moving goods

Channel captain

The dominant leader of a marketing channel or a supply channel

Transportation

The movement of products from where they are made to intermediaries and end users

Order processing

The receipt and transmission of sales order information

Cycle time

The time needed to complete a process

Operations management

The total set of managerial activities used by an organization to transform resource inputs into products services, or both

Dual distribution

The use of two or more marketing channels to distribute the same products to the same target market

Intermodal transportation

Two or more transportation modes used in combination

Exclusive distribution

Using a single outlet in a fairly large geographic area to distribute a product

Intensive distribution

Using all available outlets to distribute a product

Selective distirbution

Using only some available outlets in an area to distribute a product