Marketing Chapter 15

  1. Marketing Channel
    • consists of individuals and firms involved in the process of making a product or service available for use
    • or consumption by consumers or industrial users
  2. middle man
    any intermediary between manufacturer and end-user markets
  3. agent or broker
    any intermediary with legal authority to act on behalf of the manufacturer
  4. Manufacturing Agents
    • work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory-
    • used for selling
  5. selling agents
    • represent a single producer and are responsible for the entire marketing function of that producer (design
    • promotional plans, set prices, determine distribution policies)
  6. brokers
    • independent firms or individuals whose principle function is to bring buyers and sellers
    • together to make sales; usually have no continuous relationship with the buyer
    • or seller but negotiate contracts between the two parties
  7. wholesaler
    • an intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer
    • markets
  8. merchant wholesalers
    independently owned firms that take title to the merchandise they handle
  9. general merchandise (full line) wholesalers
    carry a broad assortment of merchandise and perform all channel functions (hardware, drug, clothing)
  10. specialty merchandise (limited-line) wholesalers
    • offer a relatively narrow range of products but have an extensive assortment within
    • the product lines carried (health foods, seafood, automotive parts) four types: rack jobbers, cash and carry, drop shippers/desk jobbers, truck jobbers
  11. rack jobbers
    furnish racks or shelves in stores and bill retailers only for merchandise sold
  12. cash and carry
    sell only to buyers who call to them, pay cash for merchandise and furnish their own transportation for merchandise (groceries, office supplies)
  13. Drop shippers/desk jobbers
    • own the merchandise they sell but do not physically handle, stock, or deliver it; have merchandise
    • shipped directly from a producer to a buyer (coal, lumber, chemicals) sold in
    • large quantities
  14. truck jobbers
    • small wholesalers that have small warehouse from which
    • they stock their trucks for distribution to retailers (bakery items, dairy,
    • meat)
  15. retailer
    an intermediary who sells to consumers
  16. distributor
    • an imprecise term, usually used to describe intermediaries who perform a variety of distribution
    • functions, including selling, maintaining inventories, extending credit and so
    • on
  17. dealer
    means the same as distributor, retailer, wholesaler
  18. risk taking
    assuming business risks in the ownership of inventory that can become obsolete or deteriorate
  19. translational function
    buying, selling, risk taking
  20. logistical function
    assorting, storing, transporting
  21. facilitating function
    financing (extending credit to customers), grading (inspecting, testing, judging), marketing information and research (providing info to customers and suppliers including competitive conditions/trends
  22. benefits from intermediaries (4)
    time (get it when u want it), place (having it where people want it), form (enhancing a product or service), possession
  23. direct channel
    a producer and ultimate consumers deal directly with each other
  24. indirect channel
    producer retailer consumer, producer wholesaler retailer consumer, producer agent wholesaler retailer consumer
  25. indirect channel- industrial distributor
    • performs a variety of marketing channel functions, including selling, stocking, delivering a full
    • product assortment and financing
  26. electronic channels
    • employs the internet to make goods ands services available for consumption or use by consumers or
    • business buyers
  27. direct marketing channel
    • allow consumers to buy products by interacting with various advertising media without face to face
    • meeting with a salesperson (mail-order selling, catalog sales, televised home
    • shopping)
  28. multi-channel marketing
    • blending of different communication and delivery channels that are mutually reinforcing in
    • attracting, retaining and building relationships with consumers who shop and
    • buy in traditional intermediaries and online
  29. dual distribution
    an arrangement whereby afirm reaches different buyers by employing two or more different types ofchannels for the same basic product (Hallmark with Hallmark cards and Ambassador brand of cards)
  30. strategic channel alliances
    one firm’s marketing channel is used to sell another firm’s products
  31. corporate systems
    • combination of successive stages of production and distribution under a single ownership is corporate
    • vertical marketing system
  32. forward integration (corporate systems)
    a producer might own the intermediary at the next level down in the channel
  33. backward integration
    retailer might own a manufacturing operation
  34. contractual vertical marketing system
    • independent production and distribution firms integrate their efforts on a contractual
    • basis to obtain greater functional economies and marketing impact than they
    • could achieve alone- most popular
  35. wholesaler sponsored voluntary chains
    • involve a wholesaler that develops a contractual relationship with small, independent retailers to
    • standardize and coordinate buying practices, merchandising programs, and
    • inventory management efforts
  36. Retailer-sponsored
    exist when small,independent retailers form an organization that operates a wholesale facilitycooperatively
  37. Four types of franchising
    • Manufacturer-sponsored retail franchise systems: prominent in the
    • automobile industry (Ford licenses dealers to sell its cars); Manufacturer-sponsored
    • whole systems: exist in the soft-drink industry, where Pepsi-Cola licenses wholesalers (bottlers) that purchase concentrate from Pepsi-Cola and then carbonate, bottle, promote, and distribute
    • its products to supermarkets and restaurants; Service-Sponsored Retail Franchise Systems: provided by
    • firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others (McDonalds); service Sponsored Franchise Systems: exist when franchisors license individuals or firms to dispense a service under a trade name and specific guidelines
  38. administered vertical marketing systems
    • achieve coordination at successive stages of production and distribution by the size
    • and influence of one channel member rather than through ownership
  39. channel partnerships
    • consists of agreements and procedures among channel members for ordering and physically distributing a
    • producer’s products through the channel to the ultimate consumer. Collaboration
  40. target market coverage
    • achieving the best coverage of the target market requires attention to the density, the number of stores in
    • a geographical area - three types: intensive, exclusive, selective distrubtion
  41. Intensive Distribution
    • firms tries to place its products and services in as many outlets as possible. Usually chosen for
    • convenience products or services such as candy, fast food, newspapers
  42. exclusive distribution
    • extreme opposite of intensive distribution because only one retail outlet in a specified
    • geographical area carries the firm’s products; usually for specialty products
    • or services (fragrances, apparel, accessories, yachts)
  43. Selective Distribution
    • lies between these two extremes and means that a firm selects a few retail outlets in a specific
    • geographical area to carry its products; most common
  44. satisfying buyer requirements
    • gaining access to channels and intermediaries that satisfy at least some of the interests buyers might
    • want fulfilled when they purchase a firm’s products or services; fall into four
    • broad categories: information, convenience, variety, pre or post sale services
  45. information
    when buyers have limited knowledge or desire specific data about a product or service
  46. convenience
    • proximity or driving time, minimum of time and hassle, website (easy to locate, navigate,
    • fast)
  47. variety
    reflects buyers’ interest in having numerous competing and complementary items from which to choose
  48. pre or postsale services
    • provided by intermediaries are an important buying requirement for products such as large household
    • appliances that require delivery, installation and credit (Whirlpool)
  49. profitability
    • determined by the margins earned (revenue – cost) for each channel member and for the channel as a whole. Includes distribution, advertising, selling expenses associated with different
    • types of marketing channels
  50. channel conflict
    • arises when one channel member believes another channel member is engaged in behavior that prevents it
    • from achieving its goals- vertical and horizontal conflict
  51. vertical conflict
    • occurs between different levels in a marketing channel- between a manufacturer and a wholesaler or
    • retailer or between a wholesaler and a retailer; three types: (1)disintermediation, (2) disagreement
    • over how profit margins are distributed among channel members produced conflicts, (3) manufacturers
    • believe wholesalers or retailers are not giving their products adequate attention
  52. disintermediation
    type of vertical conflict- conflict arises when a channel member bypasses another member and sells or buys products direct
  53. horizontal conflict
    • occurs between intermediaries at the same level in a marketing channel, such as between two or
    • more retailers (Target and Kmart) or two or more wholesalers hat handle the same manufacturer’s brands
  54. two types of horizontal conflict
    • (1)Arises when a manufacturer increases its distribution coverage in a geographical area
    • (2) Dual distribution causes conflict when different types of retailers carry the same
    • brands
  55. channel captain
    • a channel member that coordinates, directs, and supports other channel members; can be producers,
    • wholesalers, or retailers
Card Set
Marketing Chapter 15
chapter 15 marketing vocabulary words