Chapter 10

Question 1

Define a marketing channel

Answer 1

The set of individuals or firms involved in the process of making a product available.

These make possible the flow of goods from a producer, through intermediaries, to a buyer

Question 2

Describe a middleman intermediary

Answer 2

thats just another name for intermediary

Question 3

Describe an agent or broker intermediary

Answer 3

any intermediary with legal authority to act on behalf of another channel member

Question 4

Describe a wholesaler intemediary

Answer 4

Any intermediary who sells to other intermediaries, usually to retailer - this term usually applies to intermediaries who deal in consumer goods

Question 5

Describe a retailer intermediary

Answer 5

An intermediary who sells to consumers

Question 6

Describe a distributor intermediary

Answer 6

general term used to describe intermediaries who perform a variety of functions, including selling, maintaining inventories, extending credit, and others - usually for those in business markets

Question 7

Describe a dealer intermediary

Answer 7

a general term that can mean the same as distributor, a retailer, or a wholesaler

Question 8

How do intermediaries create value

Answer 8

• they minimize the number of industry transactions which reduced producer costs

Question 9

What 3 functions do intermediaries perform

Answer 9

1. transactional function: they do this when they buy and sell goods or services and do risk taking
2. logistical function - the logistics of a transaction involve the details of preparing and getting a product to buyers. Gathering, sorting, and dispersing products are some of the logistical functions of the intermediary (selection, storing, sorting, transporting)
3. facilitating function - make a transaction easier for buyers (ex. giving financing options, marketing information and research)

–> ALL 3 functions must be performed in a marketing channel

Question 10

How do marketing channels help create value for consumers through what 5 utilities

Answer 10

1. time utility - having a product or service when you want it
2. place utility - having a product or service available where consumers want it
3. form utility - enhancing a product or service to make it more appealing to buyers

4.information utility - providing consumers with the information they need to make an informed choice

5. possession utility - efforts by intermediaries to help buyers take possession of a product or services like providing various ways for payment to be made for a product

Question 11

How does the marketing channel increase in length

Answer 11

this is when the number of intermediaries between a producer and buyer increases

Question 12

What is a direct channel

Answer 12

producer and consumer deal directly with each other

Question 13

What are indirect channels

Answer 13

ones where intermediaries are inserted between the producer and consumers and perform numerous channel functions

Question 14

Compare business marketing channels

Answer 14

these are typically shorter and rely on one intermediary or none at all because business users are fewer in number, tend to be more concentrated geographically, and buy in larger quantities –> so they can be served directly or by a limited number of intermediaries

Question 15

what are electronic or digital marketing channels

Answer 15

Channels that use the Internet to make goods and services available to consumers or business buyers.

Question 16

electronic intermediaries can perform what two function, and can’t perform what function

Answer 16

• can perform transactional and facilitating functions effectively and at a relatively lower cost than traditional intermediaries
• they cannot perform logistical functions - this function remains with traditional intermediaries

Question 17

Define a dual distribution system

Answer 17

Arrangement whereby a firm reaches buyers by using two or more different types of channels for the same basic product.

Question 18

define strategic channel alliances

Answer 18

whereby one firms marketing channel is used to sell another firms products

Question 19

define multi-channel marketing

Answer 19

Blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with customers.

• there is the traditional marketplace and then the marketspace which is internet/web enabled - now days companies maintain a presence in both market environments

Question 20

describe multi channel marketing

Answer 20

companies will employ multiple marketing channels for their products and services, different communication and delivery channels are used.
- this seeks to integrate a firms communication and delivery channels, not differentiate them - in doing so consumers can browse and buy any time anywhere any way expecting that the experience will be similar regardless of channel

Question 21

define a cross channel shopper

Answer 21

An online consumer who researches products online and then purchases them at a retail store. –> this person is using multi channel marketing

shoppers due this because of 3 reasons
1. the desire to compare products among different retailers
2. the need for more information than is available in stores
3. the ease of comparing options without having to trek to multiple retail locations

Question 22

Websites can play multiple roles in multi channel marketing because they can serve as either a communication or deliver channel, or both. What are the 2 general types of websites

Answer 22

1. transactional websites
2. promotional websites - no actual selling takes place on them but they showcase products and services and provide information

Question 23

Define vertical marketing systems

Answer 23

Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact. They encourage collaboration, shared responsibility and partnership between the manufacturers and retailers in a system (vertical marketing systems don’t go down in a linear fashion, basically they go down into multiple intermediaries)

Question 24

What are the major types of vertical marketing systems

Answer 24

corporate, contractual, and administered

Question 25

Describe corporate vertical marketing systems

Answer 25

a firm at one level of a channel owns the firm at the next level or owns the entire channel - a practice called forward integration like Goodyear that distributes its tires also through its own retail stores. A retailer can also own a manufacturing operation known as backwards integration

Question 26

Describe contractual vertical marketing systems

Answer 26

independent production and distribution firms combine their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone. This is the most popular system - there are 3 variations of the contractual system: 1. wholesaler-sponsored voluntary chains - involves a wholesaler that develops a contractual relationship with small independent retailers to standardize and coordinate buying practices etc. 2. Retailer sponsored co-operatives - when small, independent retailers form an organization that operates a wholesale facility co-operatively 3. franchising - a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchise to operate a certain type of business under an established name and according to specific rules set by the franchisor --> manufactured sponsored retail franchise system (like cars) --> manufactured sponsored wholesale franchise system --> retail franchise systems (restaurants and stores) --> service franchise systems (this is services like H&R tax)

Question 27

Describe administered vertical systems

Answer 27

achieve coordination at successive stages of production and distribution by the size and influence of one channel member. Ex. Walmart is a big company and can obtain co-operation from manufacturers in terms of product specifications, price levels, and promotional support

Question 28

The final choice of a marketing channel by a producer depends on a number of

Answer 28

- market factors (geographic concentration of the market, number of potential customers, type of market, order size) - product (technical factors, perishability, unit value, product life cycle) - company factors (financial resources and ability of management, desire for channel control)

Question 29

When looking at channel design considerations and wanting to get target market coverage what are the 3 degrees of distribution intensity that exist

Answer 29

1. intensive distribution - A firm tries to place its products or services in as many outlets as possible. 2. exclusive distribution - Only one retail outlet in a specific geographical area carries the firm’s products. 3. selective distribution - A firm selects a few retail outlets in a specific geographical area to carry its products

Question 30

When looking at channel design considerations what three thigs do you consider

Answer 30

1. target market coverage 2.satisfying buyer requirements 3. profitability

Question 31

When looking at the channel design consideration satisfying buyer requirements what 4 categories are there

Answer 31

1. convenience 2. variety . pre or post sale services

Question 32

define channel conflict

Answer 32

Arises when one channel member believes another channel member is engaged in behaviour that prevents it from achieving its goals. - there can be vertical conflict (occurs between different levels in a marketing channel) or another type of vertical conflict called disintermediation (Vertical channel conflict that arises when a channel member bypasses another member and sells directly to consumers) - or there can be horizontal conflict occurring between intermediaries at the same level in the marketing channel like between two or more retailers

Question 33

To ensure cooperation in the channel market we can have channel captains which are

Answer 33

- a dominant channel member that coordinates, directs, and supports other channel members, a firm becomes a channel captain because it has the ability to influence the behavior of other members either through 1. economic influence 2. expertise influence 3. identification with a particular channel member creates influence 4. from the legit right of one channel member to direct the behavior of other members (which can occur under contractual vertical marketing systems)

Question 34

Define logistics

Answer 34

Activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. --> deals with the flow of the product, the decisions have to be cost effective but still deliver expected customer service

Question 35

Define a supply chain

Answer 35

Sequence of firms that perform activities required to create and deliver a product to consumers or industrial users. it differs from marketing channels in terms of the firms involved --> a supply chain is longer

Question 36

define supply chain management

Answer 36

Integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers.

Question 37

Define reverse logistics

Answer 37

A process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal. (supply chain can work in reverse)

Question 37

What are the 4 key logistic functions in a supply chain

Answer 37

1. transportation 2. order processing 3. inventory management 4. warehousing

Question 38

Order processing is made more sophisticated through the use of

Answer 38

electronic data interchange (EDI) - A computer-to-computer exchange of business documents from a retailer to a supplier and back.

Question 39

warehousing distribution centers can be divided into what three types

Answer 39

traditional, cross-docking, and combination