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BA 370 final (16/17)
| Term | Definition |
|---|---|
| Channel decisions: Push vs. Pull | 1. push (channel)- rely on channel members to push product down channel 2. pull (consumers)- rely on buyers to pull product down through channel |
| Channel decisions: Location and amount of outlets Type and number of Institutions | intensive, limited, exclusive |
| Channel decisions: Sequence of outlets thru which will sell Logistic and operations | 1. Start at high end and trickle down 2. physically moving goods; inventory and tracking |
| Channel decisions: Time frame | from 1st input to final consumer how long will the channel operate? |
| Channel decisions: Management of channels | who is controlling logistics (w/ firm, w/ channel, gov.; how often is it renegotiated |
| Channel design | agents/wholesalers/distributors/jobbers/transportation/inventorying/ fulfillment center/retailer manufacturer -> consumer or manufacturer -> intermediary -> intermediary -> consumer |
| Distribution center | mange inbound transportation, receive and check with UPC and RFID, storing and crossdocking, get merchandise floor-ready, prepare to ship, ship to stores |
| How do long channels add value? | 1. quantity - reach more buyers 2. location utility- can reach buyers otherwise not able to find 3. time utility 4. possession utility- optimal assortment 5 purchase conditions |
| How can conflict arise with long channels? | 1. constraints (established norms, other players blocked) 2. difficult to change quickly 3. lose control over marketing function 4. least glamorous aspect of marketing 5. channel member downstream carry competing brands 6. successive marginalization |
| New forms of retailing | 1. Warehouse/membership clubs 2. off-price merchandisers liquidators 3. outlets 4. category killers 5. vending machines 6. direct marketing (internet sales, auctions) |
| Trends in retailing | 1. shifting channel captains 2. changes in food retailing -BCG Model and shares; online groceries |
| Vertical channel conflict | When marketing channel members that buy and sell to one another are not in agreement about their goals, roles, or rewards |
| Horizontal channel conflict | Can occur when there is disagreement or discord among members at the same level in a marketing channel |
| Corporate vertical marketing system | The parent company has complete power and can dictate the priorities and objectives of the marketing channel because it owns multiple segments of the channel, such as manufacturing plants, warehouse facilities, and retail outlets |
| Independent marketing channel or Conventional marketing channel | Several different members (a manufacturer, a wholesaler, and a retailer) attempt to satisfy their own objectives and maximize their profits, often at the expense of the other members |
| Reward power | Monetary incentives |
| Coercive power | Threatening to punish or punishing for not undertaking certain tasks |
| Referent power | When a supplier wants to be associated with an important supplier to attract other retailers’ business |
| Expertise power | Relies on vast experience and knowledge |
| Information power | Knowing the consumer goods market |
| Legitimate power | Power relating to contracts |
| Channel Structure | The level of difficulty a manufacturer experiences in getting retailers to purchase its products is determined by the degree to which the channel is vertically integrated: |
| vertically integrated | The degree to which the manufacturer has a strong brand or is otherwise desirable in the market; and the relative power of the manufacturer and retailer |
| Customer Expectations | Manufacturers need to know where their target market customers expect to find their products and those of their competitors |
| Channel Member Characteristics | Several factors pertaining to the channel members themselves help determine the channel structure Generally, the larger and more sophisticated the channel member, the less likely that it will use supply chain intermediaries |
| Distribution intensity | The number of channel members to use at each level of marketing channel |
| Intensive distribution | Designed to place products in as many outlets as possible; the more exposure, the more sales |
| Exclusive distribution | Granting exclusive geographic territories to one or very few retail customers so that no other retailers in the territory can sell a particular brand |
| Selective distribution | Relies on a few selected retail customers in a territory to sell products |
Created by:
jadielyncl