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KEY TERMS:Distribution channel, Franchise organization, Distribution center

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Principles of Marketing ­ MGT301
VU
Lesson ­ 31
KEY TERMS
Distribution channel
A set of interdependent organizations involved in
the process of making a product or service available
for use or consumption by the consumer or
business user.
Channel level
A layer of intermediaries that performs some work
in bringing the product and its ownership closer to
the final buyer.
Direct marketing channel
A marketing channel that has no intermediary levels.
Indirect marketing channel
Containing one or more intermediary levels.
Channel conflict
Disagreement among marketing channel members
on goals and roles--who should do what and for
what rewards.
Conventional distribution channel
A channel consisting of one or more independent
producers, wholesalers, and retailers, each a separate
business seeking to maximize its own profits even at
the expense of profits for the system as a whole.
Vertical marketing system (VMS)
A distribution channel structure in which producers,
wholesales, and retailers act as a unified system. One
channel member owns the others, has contracts
with them, or has so much power that they all
cooperate
Corporate VMS
A  vertical  marketing  system  that  combines
successive stages of production and distribution
under single ownership--channel leadership is
established through common ownership.
Contractual VMS
A vertical marketing system in which independent
firms at different levels of production and
distribution join together through contracts to
obtain more economies or sales impact than they
could achieve alone.
Franchise organization
A contractual vertical marketing system in which a
channel member, called a franchiser, links several
stages in the production-distribution process.
Administered VMS
A vertical marketing system that coordinates
successive stages of production and distribution, not
through common ownership or contractual ties but
through the size and power of one of the parties.
Horizontal marketing system
A channel arrangement in which two or more
companies at one level join together to follow a new
marketing opportunity.
hybrid marketing channel
Multi-channel distribution system in which a single
firm sets up two or more marketing channels to
reach one or more customer segments.
Intensive distribution
Stocking the product in as many outlets as possible.
exclusive distribution
Giving a limited number of dealers the exclusive
right to distribute the company's products in their
territories.
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Principles of Marketing ­ MGT301
VU
Selective distribution
The use of more than one, but fewer than all, of the
intermediaries who are willing to carry the
company's products.
Physical distribution/marketing logistics The tasks involved in planning, implementing, and
controlling the physical flow of materials, final
goods, and related information from points of origin
to points of consumption to meet customer
requirements at a profit.
Distribution center
A large, highly automated warehouse designed to
receive goods from various plants and suppliers,
take orders, fill them efficiently, and deliver goods
to customers as quickly as possible.
Integrated logistics management
The logistics concept that emphasizes teamwork,
both inside the company and among all the
marketing channel organizations, to maximize the
performance of the entire distribution system.
Third-party logistics provider
An independent logistics provider that performs any
or all of the functions required to get their clients'
product to market.
Retailing
Retailing includes all the activities involved in selling
goods or services directly to final consumers for
their personal, no business use. Many institutions--
manufacturers,  wholesalers,  and  retailers--do
retailing. But most retailing is done by retailers:
businesses whose sales come primarily from retailing.
Wholesaling
Wholesaling includes all activities involved in selling
goods and services to those buying for resale or
business use. We call wholesalers those firms
engaged primarily in wholesaling activity.
158
Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Company’s Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five M’s of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE