Marketing Channels and Value Delivery Networks
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Questions and Answers

What type of conflict occurs among firms at the same channel level?

  • Lateral conflict
  • Diagonal conflict
  • Vertical conflict
  • Horizontal conflict (correct)

    • Which type of marketing system consists of members acting as a unified system?

  • Horizontal Marketing Systems
  • Conventional Distribution Channels
  • Vertical Marketing Systems (correct)
  • Independent Marketing Systems

    • In which type of Vertical Marketing System does a corporation own both production and distribution?

  • Franchise VMS
  • Administered VMS
  • Corporate VMS (correct)
  • Contractual VMS

    • What characterizes a Conventional Distribution Channel?

    <p>Independent channel members</p> Signup and view all the answers

    Which type of VMS involves individual firms joining through contracts?

    <p>Contractual VMS</p> Signup and view all the answers

    What is a common consequence of channel conflict?

    <p>Poor performance</p> Signup and view all the answers

    What best describes Administered VMS?

    <p>Dominance by a single firm through size and power</p> Signup and view all the answers

    Which of the following flows is NOT typically connected among channel members?

    <p>Energy Flow</p> Signup and view all the answers

    What is the primary function of intermediaries in a marketing channel?

    <p>To help match product demand with supply</p> Signup and view all the answers

    Which of the following best describes a 'Value Delivery Network'?

    <p>A partnership among suppliers, distributors, and customers</p> Signup and view all the answers

    Why can a strong distribution system be considered a competitive advantage?

    <p>It enhances customer access and satisfaction</p> Signup and view all the answers

    In terms of channel management, what happens as additional channel levels are added?

    <p>Producers face greater complexity and lose some control</p> Signup and view all the answers

    What is NOT a key function performed by channel members?

    <p>Pricing decisions</p> Signup and view all the answers

    What is a characteristic of direct marketing channels?

    <p>Producers maintain full control over distribution</p> Signup and view all the answers

    What is a potential consequence of high channel complexity?

    <p>Higher potential for miscommunication</p> Signup and view all the answers

    How can channel design decisions impact the marketing mix?

    <p>They directly influence marketing communications and pricing</p> Signup and view all the answers

    What is a defining feature of horizontal marketing systems?

    <p>Companies at the same level collaborate with channel members</p> Signup and view all the answers

    What are multichannel distribution systems also known as?

    <p>Hybrid marketing channels</p> Signup and view all the answers

    Which step comes first in the channel design decision process?

    <p>Analyzing consumer needs</p> Signup and view all the answers

    What must be assessed in Step 4 of channel design decisions?

    <p>Economic criteria, control issues, and adaptive criteria</p> Signup and view all the answers

    Which of the following is NOT a key challenge in designing international distribution channels?

    <p>Efficient market penetration strategies</p> Signup and view all the answers

    How should channel member performance be evaluated?

    <p>Against established standards</p> Signup and view all the answers

    Which aspect is emphasized in partner relationship management (PRM) within channel management?

    <p>Building and maintaining collaborative relationships</p> Signup and view all the answers

    What should be considered when identifying major alternatives in channel design?

    <p>The types and number of intermediaries</p> Signup and view all the answers

    What is the main purpose of channel management decisions?

    <p>To effectively manage and coordinate channel members</p> Signup and view all the answers

    What type of agreements fall under exclusive dealing?

    <p>Exclusive territorial agreements and tying agreements</p> Signup and view all the answers

    Which of the following is NOT a component of the logistics system goals?

    <p>Determining the exact service level required</p> Signup and view all the answers

    Why is greater emphasis being placed on logistics?

    <p>It provides a competitive advantage and cost savings</p> Signup and view all the answers

    Which distribution type involves the entire supply chain management system?

    <p>Reverse distribution</p> Signup and view all the answers

    What should firms consider when establishing logistics goals?

    <p>The balance of service benefits against costs</p> Signup and view all the answers

    What does partner relationship management (PRM) primarily aim for?

    <p>To establish long-term partnerships</p> Signup and view all the answers

    Which performance aspect is NOT typically checked for channel members?

    <p>Employee satisfaction</p> Signup and view all the answers

    What role do distributors play in the context of product marketing?

    <p>They provide local credit to end customers.</p> Signup and view all the answers

    Which statement best describes extensive distribution?

    <p>Products are typically low unit value and widely available.</p> Signup and view all the answers

    In which scenario are distributors more likely to assist in decision-making for consumers?

    <p>When they possess knowledge about reliability and availability of spare parts.</p> Signup and view all the answers

    What is a significant challenge with achieving extensive distribution?

    <p>The enormous costs associated with it.</p> Signup and view all the answers

    How can distributors promote products effectively?

    <p>By leveraging local language and cultural references.</p> Signup and view all the answers

    Which factor often influences the decision to sell commodities nationwide in developing countries?

    <p>Political motivations rather than purely commercial judgments.</p> Signup and view all the answers

    What can distributors anticipate in their role within the market?

    <p>Consumer needs.</p> Signup and view all the answers

    What issue have marketing boards discovered regarding pan territorial distribution?

    <p>It can impose a financial burden that's hard to balance.</p> Signup and view all the answers

    What is the primary characteristic of selective distribution?

    <p>Limited number of retailers appointed by suppliers.</p> Signup and view all the answers

    What advantage does a supplier gain from selective distribution?

    <p>Closer working relationships with chosen intermediaries.</p> Signup and view all the answers

    Why might exclusive distribution result in some market coverage being lost?

    <p>Only select dealers are permitted to sell the product.</p> Signup and view all the answers

    Which type of products is most commonly associated with exclusive distribution?

    <p>Expensive and complex agricultural equipment.</p> Signup and view all the answers

    What is a typical strategic goal for new businesses utilizing selective distribution?

    <p>Focusing limited resources on gaining distribution accounts.</p> Signup and view all the answers

    What can help a supplier contain their marketing costs while using selective distribution?

    <p>Limiting the number of intermediaries.</p> Signup and view all the answers

    What is a potential drawback of exclusive distribution for a producer?

    <p>Reduced market coverage in certain regions.</p> Signup and view all the answers

    How does exclusive distribution affect product image?

    <p>It enhances the image of quality and prestige.</p> Signup and view all the answers

    Study Notes

    Chapter 9: Place

    • The chapter covers supply chains and value delivery networks, the nature and importance of marketing channels, channel behavior and organization, channel design decisions, channel management decisions, and public policy and distribution decisions.
    • After reading the chapter, students will be able to define the decision process and list and define the major types of buying decision behavior.

    Case Study: Caterpillar

    • Caterpillar dominates heavy construction and mining equipment markets.
    • Independent dealers are key to Caterpillar's success.
    • A dealer network, linked through computers, supports its business model.
    • Caterpillar focuses on dealer profitability and personal relationships with dealers.

    Definitions

    • Value Delivery Network: A network of suppliers, distributors, and customers who partner with each other.
    • Marketing Channel: A set of interdependent organizations involved in getting a product or service to the consumer or business user.

    Nature & Importance of Marketing Channels

    • Channel choices influence other marketing mix decisions (pricing and communications).
    • A strong distribution system is a competitive advantage.
    • Channel decisions require long-term commitments to other firms.
    • Intermediaries reduce the number of contacts needed to reach the final customer and match supply with assortment demand.
    • They overcome differences in time, place, and possession between producers and consumers.

    Key Functions of Channel Members

    • Information: Providing information about products.
    • Promotion: Promoting products through advertising.
    • Contact: Contacting potential consumers for sales.
    • Matching: Matching products to consumers' needs.
    • Negotiation: Negotiating prices and sales arrangements.
    • Physical Distribution: Carrying out the physical transfer of products.
    • Financing: Providing funds for channel activities.
    • Risk Taking: Taking risks associated with channel operations.

    Number of Channel Levels

    • The number of intermediaries defines the channel's length.
    • Direct Channels: Channels that have no intermediaries between the producer and the customer.
    • Indirect Channels: Channels with one or more intermediary levels.
    • Additional channel levels mean reduced producer control and increased complexity.

    Channel Members Are Connected Through Flows

    • Products flow from producers to consumers.

    • Information flows in both directions.

    • Payments flow from consumers to producers.

    • Ownership flows from producers to consumers.

    • Channel Behavior and Organization

      • Channel Conflict: Disagreements among channel members on roles, activities, or rewards.
        • Horizontal Conflict: Conflict among firms at the same channel level.
        • Vertical Conflict: Conflict among firms at different channel levels.
      • Conventional Distribution Channels: Independent channel members without leadership or power.
      • Vertical Marketing Systems (VMS): Members work together as a unified system (corporate, contractual, and administered).
      • Corporate VMS: The same company owns all the levels of the channel.
      • Contractual VMS: Individual firms join through agreements.
      • Manufacturer-sponsored retailer franchise system: Manufacturers sponsor retailers to sell their products.
      • Manufacturer-sponsored wholesaler franchise system: Manufacturers sponsor wholesalers.
      • Service-firm-sponsored retailer franchise system: Service firms sponsor retailers to sell their services.
      • Administered VMS: Leadership exists through dominant channel members (manufacturer or retailer).
      • Horizontal Marketing Systems: Firms at the same level cooperate.
      • Multichannel Distribution Systems: Use multiple channels at the same time to sell products.
      • Changing Channel Organizations: Disintermediation (removing intermediaries).

      Channel Design Decisions

      • Step 1: Analyzing Consumer Needs (consider cost and feasibility).
      • Step 2: Setting Channel Objectives (targeted customer service level).
      • Step 3: Identifying Major Alternatives (intermediaries, distribution intensity).
      • Step 4: Evaluating Major Alternatives (economic, control, adaptive criteria).

      Designing International Channels

      • Global marketers adapt to existing foreign country structures.
      • Challenges include complexity, penetration difficulties, and scattered or inefficient systems.

      Channel Management Decisions

      • Selecting Channel Members: Identifying and choosing the appropriate channels based on their characteristics.
      • Managing and Motivating Channel Members: Motivating members and maintaining positive relationships.
      • Partner relationship management (PRM): Maintaining partnerships for long term goals.
      • Evaluating Channel Members: Performance monitoring and evaluating channel efficiency and effectiveness.
      • Channel members' performance is checked against standards.
      • Channel members' rewards are aligned with performance.

      Public Policy and Distribution Decisi

      • Exclusive Distribution: Certain outlets are permitted to carry specific products.ons

    • Exclusive Dealing: Exclusive territorial agreements, tying agreements.

    Marketing Logistics and Supply Chain Management

    • Marketing Logistics: Includes outbound, inbound, and reverse distribution.
    • Outbound Distribution: Moving goods from the producer to the consumer.
    • Inbound Distribution: Bringing goods from suppliers to the producer.
    • Reverse Distribution: Handling returns and recycling.
    • This approach affects the whole supply chain operations.
    • Logistics are becoming increasingly important for competitive advantages, cost savings, improved product variety, and distribution efficiency.
    • This can be enhanced via the use of technologies and information.

    Goals of the Logistics System

    • Balancing customer service with cost.
    • Setting specific customer service targets with cost efficiency.

    Major Logistics Functions

    • Warehousing
    • Inventory Management
    • Transportation
    • Logistics Information Management
    • Transportation carrier options include truck, rail, water, air, pipeline, and internet.

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    Related Documents

    Chapter 9 Place - Marketing - PDF

    Description

    This quiz covers Chapter 9, focusing on the intricacies of supply chains and the significance of marketing channels. Students will explore channel behavior, design, and management decisions, alongside a case study on Caterpillar and its dealer network. Prepare to deepen your understanding of how effective marketing channels contribute to business success.

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