BMGT350 Notes for Exam 3 11 28 2012 CHAPTER 13 MARKETING CHANNELS Marketing channel channel of distribution a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer Channel members all parties in the marketing channel who negotiate with one another buy and sell products and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer intermediaries resellers and middlemen Discrepancy of quantity the difference between the amount of product produced and the amount an end user wants to buy sell product is quantities that consumer wants to buy Discrepancy of assortment the lack of all items a customer needs to receive full satisfaction from a product or products Temporal discrepancy a situation that occurs when a product is produced but a customer is not ready to buy it seasonal merchandise Spatial discrepancy the difference between the location of a producer and the location of widely scattered markets make products available in locations convenient to customers Retailer a channel intermediary that sells mainly to consumers Merchant wholesaler an institution that buys goods from manufacturers and resells them to businesses government agencies and other wholesalers or retailers and that receives and takes title to goods store them in its own warehouses and later ships them Agents and brokers wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers wholesalers or manufacturers Product characteristics Buyer considerations Market characteristics channel member companies Transactional Functions Retailers Contacting and promoting Negotiating Logistics the efficient and cost effective forward and reverse flow and storage of goods services and related information into through and out of Logistical Functions Merchant wholesaler Risk taking Physically distributing Storing Sorting Facilitating Functions Agents and Brokers Researching Financing consumers Direct Channel a distribution channel in which producers sell directly to Dual distribution multiple distribution the use of two or more channels to distribute the same product to target markets Internet non traditional and in store Strategic channel alliance a cooperative agreement between business firms to use the other s already established distribution channel Intensive distribution a form of distribution aimed at having a product available in every outlet where target customers might want to buy it Selective distribution a form of distribution achieved by screening dealers to eliminate all but a few in any single area Exclusive distribution a form of distribution that established one or a few dealers within a given area Rolls Royce Arm s length relationship relationship between companies that is loose characterized by low relational investment and trust and usually taking the form of a series of discrete transactions with no or low expectation of future interaction or service Cooperative relationship relationship between companies that takes the form of informal partnership with moderate levels of trust and information sharing as needed to further each company s goals franchise licensing joint venture strategic alliance Integrated relationship a relationship between companies that is tightly connected with linked processes across and between firm boundaries and high levels of trust and inter firm commitment vertical integration The social dimensions of channels Power Control Leadership Conflict Partnering Channel power the capacity if a particular marketing channel member to control or influence behavior of other channel members Channel control a situation that occurs when one marketing channel member intentionally affects another member s behavior Channel leader channel captain a member of a marketing channel that exercised authority and power over the activities of other channel members Channel conflict a clash of goals and methods between distribution channel members Horizontal conflict a channel conflict that occurs among channel members on the same level Vertical conflict a channel conflict that occurs between different levels in a marketing channel most typically between the manufacturer and wholesaler or between the manufacturer and retailer Channel partnering channel cooperation the joint effort of all channel members retailers wholesalers manufacturers and suppliers to create a channel that serves customers and creates a competitive advantage Service distribution focuses on Minimizing wait times Managing service capacity Improving service delivery CHAPTER 14 SUPPLY CHAIN MANAGEMENT Supply chain the connected chain of all of the business entities both internal and external to the company that perform or support the logistics function Supply chain management a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process from the source to the point of consumption resulting in enhanced customer and economic value Supply chain integration when multiple firms in a supply chain coordinate their activities and processes so that they are seamlessly linked to one another in an effort to satisfy the customer Relationship integration Measurement integration Technology and planning integration Material and service supplier integration Customer integration Internal operations integration Business processes bundles of interconnected activities that stretch across firms in the supply chain Customer relationship management Customer service management Demand management Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management Customer relationship management CRM process allows companies to prioritize their marketing focus on different customer groups according to each group s long term value to the company or supply chain Customer service management process presents a multi company unified response system to the customer whenever complaints concerns question or comments are voiced Demand management process seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and creating demand related plans of action prior to actual customer purchasing behavior Order fulfillment process a highly
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