Marketing - Chapter 10

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What do upstream partners supply in a supply chain?

Raw materials, components, parts, information, finances, and expertise

Who serves as distribution channels linking the firm and its customers in a supply chain?

Downstream partners

What is a value delivery network composed of?

The company, suppliers, distributors, and customers

What is the role of downstream marketing channel partners in a supply chain?

Link between the firm and its customers

What does disintermediation refer to in marketing channels?

Producers bypassing intermediaries or new intermediaries displacing traditional ones

What is a key factor influencing marketing channel design?

Technological advancements and the rise of direct and online marketing

What are the three distribution strategies available in marketing channels?

Intensive distribution, exclusive distribution, and selective distribution

What is a key aspect of marketing channel management?

Selecting, managing, motivating, and evaluating individual channel members over time

What does marketing logistics, or physical distribution, involve?

Planning, implementing, and controlling the flow of materials and final goods from points of origin to consumption

What does customer-centered logistics include?

Outbound logistics, inbound logistics, and reverse logistics

What is a vertical marketing system (VMS)?

A system where producers, wholesalers, and retailers act as a unified system

What is a horizontal marketing system?

Involves two or more companies at one level joining together to pursue a new marketing opportunity

What is a multichannel distribution system?

Involves a producer selling directly to consumers through catalogs, online, and mobile channels, reaching other consumer segments through retailers

What is a conventional distribution channel?

Consists of independent producers, wholesalers, and retailers seeking to maximize their own profits

What is channel conflict?

Conflict occurring among marketing channel members

What are the types of vertical marketing systems (VMSs)?

Corporate, contractual, and administered

What does marketing logistics involve?

Planning, implementing, and controlling the physical flow of goods and services

What are the components of logistics functions?

Forecasting, information systems, purchasing, and production planning

What is the goal of logistics management?

To deliver targeted customer service at the least cost

What is the focus of inventory management in logistics?

Minimizing inventory holding costs

What is the impact of transportation on logistics?

Affects pricing, delivery performance, and customer satisfaction

What is multimodal transportation?

Combining two or more modes of transportation

What are marketing channels, or distribution channels?

Independent organizations that make products available for consumption

What do channel decisions often involve?

Long-term commitments to other firms

What is the impact of a greater number of channel levels from a producer's perspective?

Less control and greater channel complexity

What do marketing intermediaries do?

Transform the assortments of products made by producers into those wanted by consumers

What is a channel level?

A layer of intermediaries that brings the product and its ownership closer to the final buyer

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

Physical flow of products, flow of ownership, payment flow, information flow, and promotion flow

Corporate Vertical Marketing Systems Is?

combines successive stages of production and distribution under single ownership

Marketing channel design involves:

analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating the alternatives.

Piggyback mode means:

rail and trucks

What is the goal of supply chain management?

Managing value-added flows among suppliers, the company, resellers, and consumers

What does the use of RFID technology potentially enable in the supply chain?

Making the entire supply chain intelligent and automated

Study Notes

Marketing Channels and Distribution Channels

  • A value delivery network includes the company, suppliers, distributors, and customers partnering to enhance the entire system's performance in delivering customer value.
  • Pepsi manages a network of people within the company, including marketing, sales, finance, and operations, to make and market its beverages.
  • Marketing channels, or distribution channels, are interdependent organizations that make products available for consumption, affecting every marketing decision and potentially leading to a competitive advantage.
  • Channel decisions often involve long-term commitments to other firms and can impact a company's pricing and product development.
  • Using intermediaries in distribution channels can provide economies, reducing the number of contacts required for transactions and adding value by bridging time, place, and possession gaps.
  • Marketing intermediaries transform the assortments of products made by producers into those wanted by consumers, creating greater efficiency in making goods available to target markets.
  • Channel members perform key functions such as information gathering, promotion, contact, matching, negotiation, physical distribution, financing, and risk taking.
  • A channel level is a layer of intermediaries that brings the product and its ownership closer to the final buyer, and the number of intermediary levels indicates the channel's length.
  • Direct marketing channels have no intermediary levels, while indirect marketing channels contain one or more intermediary levels.
  • A greater number of channel levels means less control and greater channel complexity for the producer, and institutions in the channel are connected by physical product flow, ownership flow, payment flow, information flow, and promotion flow.
  • From a producer's perspective, the number of channel levels affects control and channel complexity, impacting the flow of products, ownership, payments, information, and promotion.
  • All the institutions in the channel are connected by several types of flows, including the physical flow of products, flow of ownership, payment flow, information flow, and promotion flow.

Marketing Logistics and Supply Chain Management

  • Marketing logistics involves the physical flow of goods and related information from points of origin to points of consumption.
  • It includes outbound logistics (from factory to customers), inbound logistics (from suppliers to the factory), and reverse logistics (reusing, recycling, or disposing of returned products).
  • Supply chain management encompasses managing value-added flows among suppliers, the company, resellers, and consumers.
  • The logistics manager coordinates activities such as forecasting, purchasing, production planning, order processing, inventory, warehousing, and transportation planning.
  • The goal of marketing logistics is to deliver a targeted level of customer service at the least cost.
  • Logistics functions include warehousing, inventory management, transportation, and logistics information management.
  • Inventory management aims to be cost-effective and profitable, utilizing just-in-time logistics systems and RFID technology.
  • Balancing inventory levels is crucial for minimizing carrying costs and obsolescence while meeting customer demand.
  • Transportation choice impacts pricing, delivery performance, and customer satisfaction, with options including trucks, railroads, water carriers, pipelines, air carriers, and multimodal transportation.
  • Multimodal transportation combines two or more modes, such as piggyback, fishyback, trainship, and airtruck, providing unique advantages.
  • The use of RFID technology could potentially make the entire supply chain intelligent and automated in the future.
  • The logistics manager’s role is crucial in coordinating various activities to ensure efficient and cost-effective physical flow of goods and information to meet customer requirements.

Test your knowledge of marketing channels and distribution channels with this quiz. Explore topics such as value delivery networks, channel decisions, intermediaries, channel levels, and flows within the distribution system. This quiz will help you understand the impact of marketing and distribution decisions on a company's performance and competitive advantage.

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