Kotler 2020, 12 kap.

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Questions and Answers

What is the primary goal of companies when they utilize marketing channels?

  • To reduce product prices for consumers
  • To optimize their supply chain exclusively
  • To focus solely on online retailing
  • To enhance customer relationships and create value (correct)

How does an omni-channel approach benefit consumers?

  • By creating a seamless shopping experience across multiple platforms (correct)
  • By emphasizing only online customer service
  • By reducing the number of available retail locations
  • By offering lower prices exclusively in physical stores

What role does collaboration with channel partners play in marketing?

  • It complicates the supply chain management process
  • It helps create additional customer value (correct)
  • It is unnecessary for successful market entry
  • It is only relevant for online retailers

What significant strategy did Fast Retailing employ through its brand UNIQLO?

<p>Creating innovative retail experiences (D)</p> Signup and view all the answers

What is one of the major intermediaries in marketing channels?

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

Which of the following is NOT a focus of effective marketing channel management?

<p>Developing short-term relationships with customers (C)</p> Signup and view all the answers

In the context of marketing channels, what does logistics primarily involve?

<p>The physical distribution of products to consumers (D)</p> Signup and view all the answers

What is a key factor in the success of a marketing channel?

<p>The decisions made regarding channel management (C)</p> Signup and view all the answers

What is a major disadvantage of having a greater number of levels in a marketing channel from the producer's perspective?

<p>Higher complexity in managing relationships (C)</p> Signup and view all the answers

Which of the following defines a vertical marketing system (VMS)?

<p>A unified system where one member controls the others (A)</p> Signup and view all the answers

What is the primary role of the channel captain in a marketing channel?

<p>To provide leadership and manage conflict (B)</p> Signup and view all the answers

What is the primary characteristic of a conventional marketing channel?

<p>Each member operates independently aiming to maximize personal profits (D)</p> Signup and view all the answers

Which type of flow is NOT typically associated with marketing channels?

<p>Employee satisfaction flow (A)</p> Signup and view all the answers

What is a common issue faced by independent producers in conventional marketing channels?

<p>Poor performance due to lack of leadership (B)</p> Signup and view all the answers

The interactions within a channel are primarily characterized as what type of system?

<p>A behavioral system of real companies and people (C)</p> Signup and view all the answers

What is the impact of channel conflict on a marketing channel's performance?

<p>It often contributes to poor performance (B)</p> Signup and view all the answers

Why do producers use intermediaries in their marketing channels?

<p>To achieve greater efficiency in reaching target markets (C)</p> Signup and view all the answers

What do marketing intermediaries do with large quantities of products from producers?

<p>They break them down into smaller quantities and broader assortments (B)</p> Signup and view all the answers

Which function is NOT typically performed by members of the marketing channel?

<p>Consumer product development (B)</p> Signup and view all the answers

What is the primary role of marketing intermediaries in the economic system?

<p>To transform producers' assortments into those desired by consumers (D)</p> Signup and view all the answers

What are the potential consequences of introducing a new marketing channel that outperforms existing ones?

<p>Emerging channels may reduce existing channels' viability (C)</p> Signup and view all the answers

Which of the following best describes a benefit of using a distributor in marketing?

<p>It reduces the number of contacts required to reach customers (B)</p> Signup and view all the answers

What types of gaps do channel members bridge in the marketing process?

<p>Time, place, and possession gaps (C)</p> Signup and view all the answers

Which of the following functions involves acquiring and using funds for channel operations?

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

What is a primary reason for a company to engage in joint ownership with a foreign investor?

<p>To comply with legal restrictions imposed by foreign governments. (A)</p> Signup and view all the answers

Which of the following is a key characteristic of direct investment?

<p>Development of foreign-based assembly or manufacturing facilities. (C)</p> Signup and view all the answers

What is one disadvantage of direct investment mentioned in the content?

<p>High risks such as currency fluctuations and government changes. (A)</p> Signup and view all the answers

What does marketing channel management primarily involve?

<p>Selecting, managing, and motivating channel members. (A)</p> Signup and view all the answers

Why might a firm lack the resources to undertake a venture alone?

<p>They may lack financial, physical, or managerial resources. (C)</p> Signup and view all the answers

Which market is noted for being very open to direct investment?

<p>Mexico, especially in the automotive sector. (B)</p> Signup and view all the answers

What may happen when partners in a joint ownership venture disagree?

<p>They may face challenges in investment or marketing policies. (B)</p> Signup and view all the answers

What factor can influence the ability of producers to sign up channel members?

<p>The attractiveness of the marketing channels and producers. (A)</p> Signup and view all the answers

What risk does a manufacturer face if they treat their dealers poorly?

<p>Losing dealer support and facing potential legal issues (B)</p> Signup and view all the answers

What is a primary function of marketing logistics?

<p>Planning and controlling the physical flow of goods (D)</p> Signup and view all the answers

How do exclusive and selective distribution arrangements differ from general channel arrangements?

<p>They are subject to considerable regulation (B)</p> Signup and view all the answers

Why is logistics effectiveness important for a company?

<p>It significantly influences customer satisfaction and profitability (D)</p> Signup and view all the answers

What does supply chain management focus on?

<p>Managing value-added flows among suppliers and consumers (B)</p> Signup and view all the answers

What impact does a strong dealer group have on a manufacturer's power position?

<p>Weakens the manufacturer's negotiable power (A)</p> Signup and view all the answers

What is one of the main goals of marketing logistics?

<p>To ensure products are available at the right time and place (B)</p> Signup and view all the answers

Which statement about the role of manufacturers in dealer relationships is true?

<p>Manufacturers need to be sensitive to dealer needs to maintain support. (A)</p> Signup and view all the answers

What is the first step retailers must take in developing their marketing strategy?

<p>Segment and define their target markets (C)</p> Signup and view all the answers

Which of the following is an example of a product variable that retailers must decide on?

<p>Product assortment (C)</p> Signup and view all the answers

How can retailers differentiate themselves in a competitive market?

<p>By offering unique merchandise that competitors do not carry (D)</p> Signup and view all the answers

What factor strongly correlates with customer satisfaction for retailers?

<p>Strong local market presence (D)</p> Signup and view all the answers

Which of the following should retailers consider about their target shoppers?

<p>Preferences for variety, depth, convenience, or low prices (B)</p> Signup and view all the answers

Which approach can be crucial for effectively reaching consumers in retail marketing?

<p>Employing various promotion tools such as advertising and public relations (B)</p> Signup and view all the answers

What is a common mistake made by many retailers in their marketing strategy?

<p>Trying to cater to everyone and satisfying no market well (A)</p> Signup and view all the answers

Which aspect of retail does the store atmosphere impact significantly?

<p>The unique store experience for the target market (B)</p> Signup and view all the answers

Flashcards

Marketing Channel

A series of interconnected businesses that work together to bring a product or service from its origin to the end consumer.

Value Delivery Network

A network of firms that perform activities required to create and deliver a product or service to ultimate consumers.

Marketing Logistics (Physical Distribution)

The process of planning, implementing, and controlling the physical flow of goods, services, and related information from point of origin to point of consumption.

Direct Marketing Channel

A company selling goods directly to consumers, without intermediaries.

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Wholesalers

Companies that sell products to retailers, who then sell them to consumers.

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Retailers

Companies that sell products directly to consumers, either online or in physical stores.

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Omni-channel Retailing

A strategy that combines online and offline channels to create a seamless customer experience.

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Designing International Marketing Channels

The process of distributing products and services to customers in different countries, using a variety of marketing channels.

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Traditional Channel Approach

The practice of using intermediaries like wholesalers or retailers to reach consumers, allowing manufacturers to focus on production and gain efficiency.

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Physical Distribution

The process of moving goods from the manufacturer to the consumer, including transportation and storage.

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Financing

The process of obtaining funds to cover the costs of channel operations, such as inventory, transportation, and marketing.

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Risk-Taking

The risk of potential losses associated with channel operations, such as product damage, inventory obsolescence, or customer default.

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Information

The gathering and dissemination of information about market trends, consumer preferences, and competitor activities.

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Promotion

The creation and dissemination of persuasive messages to promote products and services.

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Bridging Gaps

The process of making products available to customers at the right time and place.

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Channel Advantages

The ability of channel members to offer greater efficiency and reach compared to manufacturers acting independently.

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Marketing Channel Flows

The different institutions involved in a marketing channel, like producers, wholesalers, and retailers, are interconnected by several flows such as physical products, ownership, payment, information, and promotions.

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Vertical Marketing System (VMS)

A channel where all members, like producers, wholesalers, and retailers, work together as a unified system. This can be achieved through ownership, contracts, or powerful influence.

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Channel Captain

The company with the most power and influence in a marketing channel. It's responsible for directing the flow of products and managing conflict among channel members.

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Conventional Marketing Channel

A traditional marketing channel where individual companies like producers, wholesalers, and retailers operate independently, with each seeking to maximize their own profits. This often leads to conflicts and weaker performance.

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Channel Integration

The level of integration among channel members. High integration signifies a VMS, where companies work closely as a unified system.

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Channel Organization

The degree to which a channel system is structured and formalized. Informal channels are loosely organized, while formal systems have strong organizational structures.

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Channel Conflict

Conflicts between the members of a marketing channel. They can arise due to competing objectives, conflicting roles, or different perceptions of the market.

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Channel Performance

The capacity of a marketing channel to effectively manage its operations and achieve its goals. It depends on factors like channel integration, conflict management, and leadership

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Joint Ownership Venture

A company combines its resources with a foreign investor to create a new local business, sharing ownership and control.

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Direct Investment

A company establishes direct manufacturing or assembly facilities in a foreign market, having complete control over operations.

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Risks of Direct Investment

The company faces potential financial risks like currency fluctuations, market downturns, and government regulations.

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Marketing Channel Management

The process of choosing, managing, and motivating individual channel members, including evaluating their performance.

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Channel Member Selection

The company's attractiveness and the marketing channels' pull factors influence the number of channel members willing to collaborate.

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Reasons for Joint Ownership

Setting up a new business venture with a local partner is often necessary due to local regulations or market restrictions.

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Exit Costs of Direct Investment

Direct investment carries the risk of potentially high exit costs, making retreat from the market more challenging.

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Direct Investment in Mexico

Mexico has been welcoming foreign direct investment, particularly in the automotive industry, with cars manufactured there being exported globally.

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Market Segmentation

The process of dividing a market into groups of customers with similar needs and preferences, with the aim of targeting specific segments for effective marketing.

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Target Marketing

The process of choosing specific customer groups to target with marketing efforts, based on their needs and the potential profitability of serving them.

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Retail Differentiation

The unique features and benefits that a retailer emphasizes to stand out from competitors in the minds of customers.

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Retail Positioning

The process of creating a clear and consistent image of a retailer in the minds of target customers, highlighting its unique selling points.

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Retail Marketing Mix

The combination of marketing activities that a retailer uses to reach its target market and achieve its marketing objectives.

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Product Assortment

A selection of products offered by a retailer, designed to meet the needs and preferences of its target market.

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Services Mix

Additional services offered by a retailer to enhance the customer experience and differentiate the shopping experience.

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Store Atmosphere

The overall ambiance and atmosphere of a retail store, influencing the shoppers' perceptions and experience, like lighting, layout, music, and decor.

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Channel Member Performance Monitoring

The process of regularly evaluating the performance of channel members against predetermined standards like sales, inventory levels, customer service, and handling of damaged goods.

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Sensitivity to Dealer Needs

The practice of a manufacturer being mindful of the needs and desires of their dealers, understanding that treating them poorly can lead to lost support, legal issues, and even potential switching to competitors.

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Legal Implications of Distribution Agreements

Legal considerations related to channel agreements, particularly exclusive or selective distribution arrangements, which are subject to regulations to ensure fair competition.

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Block Exemption Exceptions

A legal exemption granted to certain industries, such as vertical distribution agreements or R&D collaborations, allowing them to restrict competition in specific areas to potentially benefit consumers.

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Marketing Logistics

The process of planning, implementing, and controlling the flow of goods, services, and related information from origin to consumption to meet customer needs profitably.

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Supply Chain Management

The process of managing the flow of materials, goods, and information across the entire supply chain, including suppliers, the company, resellers, and end consumers.

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Logistics Impact on Business

The impact of logistics efficiency on customer satisfaction and company costs, ultimately influencing profitability and competitiveness.

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Misconception of Marketing Logistics

The misconception that marketing logistics primarily involves storage and transportation, overlooking the broader scope and complexities of modern logistics.

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Study Notes

Marketing Channels

  • Marketing channel: A set of interdependent organizations that help make a product or service available to consumers.
  • Value delivery network: A network made up of companies, suppliers, distributors, and customers who work together to improve the performance of the entire system and deliver customer value.
  • Firms rarely work alone in creating value.
  • Individual firm success depends on how well the entire marketing channel competes with competitors' channels.
  • Marketing channels have become a truly strategic activity.
  • Omni-channel: Combining physical and online stores.
  • Physical distribution, logistics, and supply-chain management are all a part of a marketing channel.
  • Retailing: A section of the marketing mix tool of marketing channels where firms work with other firms to achieve success. Includes wholesalers and retailers/intermediaries.

Mini Contents

  • Company case studies: UNIQLO, Zara, Omni Channel retailing, multi-franchised premium products, Mystery shopping, and wholesaling.
  • Nature and importance of marketing channels.
  • Channel behavior and organization.
  • Contemporary approach to organizing effective channels (e.g., physical vs. online stores).

Chapter Preview

  • Marketing channels are a crucial tool for firms to connect to customers.
  • Firms are rarely alone in a channel. Effective performance depends on the entire channel.
  • Importance of managing channel design and crucial decisions.
  • Physical and online distribution are becoming more integrated in channels.

Learning Objectives

  • Explain the use of marketing channels and the functions they perform.
  • Discuss how channel members interact.
  • Identify major decisions available to companies in setting up marketing channels.
  • Explain the role of retailers in marketing channels and the types of retailers.

Nature and Importance of Marketing Channels

  • Companies rarely sell directly to final consumers; instead, intermediaries help bring products to market.
  • Interdependent organizations make a product or service better able to be used or consumed.
  • Channel decisions matter greatly for all other aspects of marketing a product or service.

Supply Chains and the Value Delivery Network

  • Value delivery network includes suppliers, distributors, and customers who partner with the company.
  • Upstream firms are those supplying raw materials, parts, information, and experitise.
  • Downstream firms act as a vital connection between a firm and its customers (wholesalers and retailers).

How Channel Members Add Value

  • Intermediaries make goods much more accessible to the consumer.
  • Intermediaries offer experience, specialization, and scale of operation, providing a greater efficiency.
  • They bridge time, place, and possession gaps between the seller and consumer.

Number of Channel Levels

  • Direct marketing channel: No intermediary levels, the company will sell directly to the consumer.
  • Indirect marketing channel: One or more intermediaries between the seller and the consumer.

Channel Behaviour and Organization

  • Channels are systems with interacting companies and people.
  • Some relationships are formal, while others are informal.

Vertical Marketing Systems (VMS)

  • Producers, wholesalers, and retailers act as a unified system to promote the channel. This can either be through ownership, contracts, or through having a very strong position amongst the other members.

Horizontal Marketing Systems

  • Two or more companies at one level join together for a new marketing opportunity.

Channel Conflict

  • Disagreement between channel members resulting from differing goals or responsibilities.

Changing Channel Organization

  • Technological advances and growth in online marketing are impacting channels.
  • One major trend: disintermediation (removing intermediaries).

Channel Design Decisions

  • Manufacturers balance the ideal and the practical when designing marketing channels.

Physical or Online Stores?

  • E-commerce offers advantages such as lower prices, 24/7 availability, and convenience.
  • Physical stores provide a more engaging and experiential shopping environment.
  • Both channels have their pros and cons.

Omni-channels

  • Integrated approach that combines various marketing channels for a seamless experience and increased customer satisfaction regardless of where the customer is in the sales cycle.

Designing International Marketing Channels

  • Different countries possess vastly different physical distribution systems and need adaptation in marketing strategies.
  • Considerations for international markets include the entry strategies of exporting, joint ventures, and direct investment.

Marketing Channel Management Decisions

  • The process of selecting, managing, and motivating individual channel members and evaluating their performance.
  • Includes considering various factors such as sales quotas, performance standards, and customer service.

Marketing Logistics and Supply Chain Management

  • Planning, implementing and controlling the physical flow of goods, services, and related information from point of origin to point of consumption.
  • Managing upstream and downstream flows from suppliers, retailer and end customers.

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