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