Distribution Channels Overview
14 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a distribution channel?

A set of independent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

Why are marketing intermediaries used?

  • To provide economies
  • Both A and B (correct)
  • To match demand and supply
  • Which of the following is NOT a distribution channel function?

  • Matching
  • Information
  • Promotion
  • Customer service (correct)
  • Direct distribution channels involve intermediaries.

    <p>False (B)</p> Signup and view all the answers

    Define 'Channel level'.

    <p>A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.</p> Signup and view all the answers

    What are the types of flows that connect institutions in a distribution channel?

    <p>All of the above (E)</p> Signup and view all the answers

    What is channel conflict?

    <p>Disagreement among marketing channel members on goals and roles.</p> Signup and view all the answers

    What are the two main types of channel conflict?

    <p>Both A and B (C)</p> Signup and view all the answers

    What is a vertical marketing system (VMS)?

    <p>A channel structure in which producers, wholesalers, and retailers work together to achieve a common goal.</p> Signup and view all the answers

    Which of the following is NOT a type of vertical marketing system?

    <p>Horizontal VMS (C)</p> Signup and view all the answers

    What is a horizontal marketing system?

    <p>A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity.</p> Signup and view all the answers

    Hybrid marketing channels are a combination of direct and indirect channels.

    <p>True (A)</p> Signup and view all the answers

    What is disintermediation?

    <p>The process of removing intermediaries from a distribution channel.</p> Signup and view all the answers

    Which of the following is a major decision in channel design?

    <p>All of the above (E)</p> Signup and view all the answers

    Flashcards

    Distribution Channel

    A group of independent organizations that collaborate to make a product or service accessible to customers.

    Why Use Marketing Intermediaries?

    Intermediaries help reduce costs by efficiently matching supply with demand.

    Distribution Channel Function: Information

    Providing product information to customers, retailers, and other channel members.

    Distribution Channel Function: Promotion

    Promoting a product to customers, retailers, and other channel members.

    Signup and view all the flashcards

    Distribution Channel Function: Contact

    Establishing contact with potential customers and buyers.

    Signup and view all the flashcards

    Distribution Channel Function: Matching

    Matching customer needs and wants with available products and services.

    Signup and view all the flashcards

    Distribution Channel Function: Negotiation

    Negotiating prices and terms of sale with customers and other channel members.

    Signup and view all the flashcards

    Distribution Channel Function: Physical Distribution

    Moving products physically from manufacturers to customers.

    Signup and view all the flashcards

    Distribution Channel Function: Financing

    Providing financial assistance to buyers and channel members.

    Signup and view all the flashcards

    Distribution Channel Function: Risk Taking

    Taking on the risk associated with owning and selling products.

    Signup and view all the flashcards

    Channel Level

    Each level of intermediaries involved in moving a product closer to the final customer.

    Signup and view all the flashcards

    Direct Marketing Channel

    A distribution channel with no intermediaries between the producer and the customer.

    Signup and view all the flashcards

    Indirect Marketing Channel

    A distribution channel with one or more intermediaries between the producer and the customer.

    Signup and view all the flashcards

    Physical Flow of Product

    The physical movement of products through the channel.

    Signup and view all the flashcards

    Flow of Ownership

    The transfer of ownership of products from one member of the channel to another.

    Signup and view all the flashcards

    Payment Flow

    The movement of payments for products through the channel.

    Signup and view all the flashcards

    Information Flow

    The exchange of information between channel members, including customer data, sales figures, and market trends.

    Signup and view all the flashcards

    Promotion Flow

    The communication of promotional messages about products to customers, retailers, and other channel members.

    Signup and view all the flashcards

    Channel Conflict

    Disagreements between channel members regarding goals or roles.

    Signup and view all the flashcards

    Horizontal Conflict

    Conflicts between organizations at the same level of the channel.

    Signup and view all the flashcards

    Vertical Conflict

    Conflicts between organizations at different levels of the channel.

    Signup and view all the flashcards

    Vertical Marketing System (VMS)

    A distribution system where producers, wholesalers, and retailers work together under a unified channel strategy.

    Signup and view all the flashcards

    Corporate VMS

    A VMS where one company owns all the levels in the distribution channel.

    Signup and view all the flashcards

    Contractual VMS

    A VMS where independent companies at different levels of the channel coordinate their activities through contractual agreements.

    Signup and view all the flashcards

    Wholesaler-Sponsored Voluntary Chains

    A type of contractual VMS where wholesalers form a group to offer shared marketing programs and distribution.

    Signup and view all the flashcards

    Retailer Cooperatives

    A type of contractual VMS where retailers form a group to buy products and manage operations jointly.

    Signup and view all the flashcards

    Franchise Organizations

    A type of contractual VMS where a franchisor grants rights to independent businesses to sell their products or services.

    Signup and view all the flashcards

    Manufacturer-Sponsored Retailer Franchise System

    A franchise where a manufacturer licenses retailers to sell their products.

    Signup and view all the flashcards

    Manufacturer-Sponsored Wholesaler Franchise System

    A franchise where a manufacturer licenses wholesalers to sell their products to retailers.

    Signup and view all the flashcards

    Service Firm-Sponsored Retailer Franchise System

    A franchise where a service firm licenses retailers to offer their services.

    Signup and view all the flashcards

    Administered VMS

    A VMS where a dominant company coordinates channel activities through its power and influence, without formal agreements.

    Signup and view all the flashcards

    Horizontal Marketing System

    A channel arrangement involving two or more companies at the same level joining forces to exploit a new marketing opportunity.

    Signup and view all the flashcards

    Hybrid Marketing Channel

    Using multiple distribution channels to reach different customer segments.

    Signup and view all the flashcards

    Disintermediation

    The process of removing intermediaries from a marketing channel.

    Signup and view all the flashcards

    Channel Design Decision: Analyzing Consumer Service Needs

    Understanding the level of service customers expect and what they are willing to pay for.

    Signup and view all the flashcards

    Channel Design Decision: Setting Channel Objectives and Constraints

    Defining clear objectives for the distribution channel and identifying limitations.

    Signup and view all the flashcards

    Channel Design Decision: Identifying Major Alternatives

    Exploring different types of intermediaries and how they can be integrated into the channel.

    Signup and view all the flashcards

    Channel Design Decision: Evaluating the Major Alternatives

    Evaluating the economic factors, control challenges, and adaptability of different channel alternatives.

    Signup and view all the flashcards

    Study Notes

    Distribution Channels

    • Distribution channels are a series of independent organizations that make a product or service available to consumers.
    • Intermediaries are used to match supply and demand, effectively providing economies.

    Distribution Channel Functions

    • Information: Sharing necessary information
    • Promotion: Promoting products
    • Contact: Establishing contact with potential buyers
    • Matching: Aligning product with buyer demand
    • Negotiation: Reaching agreements on price and terms
    • Physical distribution: Transporting and storing goods
    • Financing: Providing financial support for the channel
    • Risk taking: Handling potential risks associated with the product

    Channel Levels

    • A channel level is a layer of intermediaries that brings a product and its ownership closer to the consumer.
    • This can include direct or indirect marketing channels.

    Channel Flows

    • All channel institutions are connected by different flows.
    • Physical flow of product: Movement of products through the channel
    • Flow of ownership: Transfer of product ownership to the next channel member
    • Payment flow: Money and payment transfers
    • Information flow: Exchange of information along the channel

    Channel Conflict

    • Disagreements among channel members on goals and roles.
    • Types include horizontal conflict (between members at the same level) and vertical conflict (between different levels).

    Vertical Marketing Systems (VMS)

    • Types of VMS:
      • Corporate VMS: One company owns the entire channel (e.g. Apple's own retail stores).
      • Contractual VMS: Members are bound by contracts (e.g. franchising).
        • Wholesaler-sponsored voluntary chains
        • Retailer cooperatives
        • Franchise organizations (manufacturer sponsored, wholesaler sponsored, and service firm sponsored)
      • Administered VMS: Channel leadership comes from the power and influence of one member.

    Horizontal Marketing Systems

    • Two or more companies at the same level join together to take advantage of opportunities.

    Hybrid/Multichannel Distribution System

    • Using multiple distribution channels to reach a broader market.

    Changing Channel Organization

    • Disintermediation: Cutting out intermediaries.

    Channel Design Decisions

    • Analyzing consumer service needs: Understanding customer requirements.
    • Setting channel objectives and constraints: Defining objectives and limitations.
    • Identifying major alternatives: Considering various distribution options such as sales forces, agents, or other intermediaries.
    • Types of intermediaries: Specific types of intermediaries that fit the product and marketing objectives (Sales force, manufacturer's agency, industrial distributors).
    • Number of marketing intermediaries: Intensive, selective, exclusive distribution, depending on the strategy..
    • Evaluating alternatives: Assessing criteria like economic factors, control, and adaptability.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Description

    Explore the key concepts of distribution channels, including functions, levels, and flows. This quiz covers how intermediaries facilitate the movement of products and services from producers to consumers, enhancing supply and demand efficiency. Test your knowledge on the roles and responsibilities within distribution systems.

    More Like This

    Use Quizgecko on...
    Browser
    Browser