CH 12

Question 1

Marketing channel

Answer 1

-flow of goods and services from producers to consumers -individual firms make product/service available to consumers

Question 2

(Channel members)

Answer 2

resellers wholesalers industrial distributors

Question 3

resellers (Channel members)

Answer 3

-purchase product to resell it -sell product directly to consumers

Question 4

wholesalers (Channel members)

Answer 4

purchase from supplier and sell to resellers and other wholesellers

Question 5

industrial distributor (Channel members)

Answer 5

business to business selling products

Question 6

Why should you use channels

Answer 6

-mainly for convenience -ie. bookstore sells books at higher cost but its more convenient

Question 7

cons of channels

Answer 7

may have higher price -potential loss of profit -no control

Question 8

Transactional function (functions of intermediaries)

Answer 8

buying: purchase product for resale as agent selling:contacting consumers, promoting, seeking offers

Question 9

logistical function (functions of intermediaries)

Answer 9

• assorting:creating product assortment from multiple sources to serve customers
• storing-assembling and protecting product at location -sorting- purchasing large amounts and breaking into smaller amounts for consumer
• transporting- moving product to consumer

Question 10

Facilitating function (functions of intermediaries)

Answer 10

-financing-extending credit to consumers

grading-testing product to give it a grade

market info + research- providing info to consumers and suppliers : study competitive trends and conditions

Question 11

Direct channel

Answer 11

from provider to consumer

-schwan food

Question 12

retailers (indirect channel)

Answer 12

buy from producer to sell to consumer

IE- whirlpool/gm

Question 13

wholesalers (indirect channel)

Answer 13

from producers to retailer to consumer

IE-time mag/mars candy

Question 14

Agents (indirect channel)

Answer 14

from producer->wholesaler->retailer->consumer

Question 15

Dual distribution system

Answer 15

firm reaches buyer from 2 different channels for same product

IE- apple: sells in stores and from best buy

Question 16

strategic channel allowance

Answer 16

one firms marketing channel is used to sell another product

-IE- starbucks coffee uses another firm to get to US

Question 17

Vertical marketing system

Answer 17

central marketing channels to achieve channel harmonics and maximize marketing intrest

-cooperation among all members of channel

Question 18

Corporate system (3 types of Vertical Marketing System)

Answer 18

• integrates channel members through ownership
• retailer owns manufacturing operation
• moves backward from consumer
• producer owns next level

pros- greater control, less distribution cost

cons- higher invest ment and fixed cost

Question 19

Contractual system (VMS)

Answer 19

• individual firms join together through contracts
• retailer owns manufacturing operation
• IE- holiday inn owns many branches for different types of consumers

Question 20

Administered system VMS

Answer 20

• coordination by the influence of one channel instead of ownership
• p&g/walmart: strong trade cooperation and support

Question 21

backward integration

Answer 21

• retailer owns manufacturer
• moves backwards from consumer

Question 22

Forward integration

Answer 22

• provider owns next levels
• moves forward to consumer

Question 23

Channel conflict

Answer 23

• one channels member has problem with another channel member
• prevents from achieving goals

Question 24

Vertical Conflict

Answer 24

Conflict on different levels

IE- toy manufacturer sees product arriving late

-between manufacturer and wholesaler for late shippign

Question 25

Horizontal Conflict

Answer 25

-two or more channel members at same level have issue

IE- 2 wholesalers work for same company in different regions

-one moves to others region=issue