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relates to intermediaries buying in bulk from different manufacturers
adjusting for discrepancy of assortment
occurs when an intermediary buys from manufacturers, then regroups products into different assortments based on what consumers are demanding from retailers
administered VMS
one type of vertical marketing system where there is no ownership of channel members but instead one member who is large enough to coordinate and manage the distribution activities of other channels members
a type of intermediary who acts as an extension to the manufacturer
bulk and weight
the density and heaviness of one unit of product
occurs when an intermediary takes a large bundling of a manufacturer’s product and breaks it down into single units to be distributed to retailers based on the retailer’s order
business-to-business (B2B)
a market comprised of companies who buy from and/or sell to other companies
business-to-consumer (B2C)
a market comprised of companies that manufacture and sell products or services directly to a final consumer or end user
channel conflict
disagreements between companies in the marketing channel due to a competitive versus a collaborative mindset
channel length
relates to the number of intermediaries in the marketing channel
channel member (intermediary)
a company that works in a network with other companies to help gets products from manufacturers to final consumers
contractual VMS
independent companies that have joined together by contract for a mutually beneficial purpose
corporate VMS
when one member of the distribution channel owns the other members
customer-perceived value
the overall perception that a consumer has about a company, brand, or product and is measured by what the consumer is willing to pay in return for the features and benefits in the market offering
direct channel
when companies sell and distribute their products directly to consumers
direct marketing channel
when a manufacturer does not use intermediaries but rather involves the manufacturer distributing its market offering directly to consumers
the process of removing an intermediary from a marketing channel
the process of making products and services available and accessible to consumers to purchase
a type of intermediary that takes ownership of the product and tends to align itself closely with a manufacturer
exclusive distribution
a strategy that involves allowing a limited number of intermediaries to distribute a company’s market offering
facilitating functions
activities such as financing and information sharing in the marketing channel
final consumer
the end user of a good or service
horizontal conflict
when there is disagreement among firms at the same level in the marketing channel
horizontal marketing system
a group of unrelated companies that offer products and services in a shared space
indirect channel
involves the utilization of one or more intermediaries to distribute a market offering to consumers
intensive distribution
a distribution strategy that entails distributing a company’s market offering through all possible intermediaries
inventory management
a function that involves identifying the type of inventory and how much a company has on hand at any given time
inventory turnover rate
a metric that measures how quickly inventory is turned over, or sold
logistical functions
the handling, packing, inventorying, transporting, warehousing, and ensuring the security of products as they make their way to the customer
the coordination of all supply chain activities, such as warehousing, inventory management, and transportation
marketing channel
system of people, organizations, and activities that work together to make goods and services available to consumers for use
multichannel distribution system
where a single company sets up multiple distribution channels to reach customers
omnichannel marketing system
multichannel approach whereby companies give consumers a variety of ways to purchase, receive, and return products
order accuracy rate
a metric that measures the percentage of orders that are processed, fulfilled, and shipped to consumers without any errors
percentage of on-time shipments
a metric used to evaluate how well a channel member meets its promise of delivering goods on time
relates to the likelihood that a product will spoil, decay, or expire if not used in a timely manner
post-sale service
all activities provided by a company that reinforce the value of the product or service for the buyer
pre-sale service
all activities provided by a company that help a buyer make a purchase decision
a company that supplies the raw materials that manufacturers need to create consumer products
producer to retailer to consumer channel
when manufacturers or producers sell to retailers without the use of wholesalers or distributors
product life cycle
the various stages that a product goes through from its introduction phase, to its growth and maturity phase, and in some cases to its decline phase
the process of buying materials needed to manufacture products
a type of intermediary where retailers take ownership of the product and their sole focus is on reaching the end user or customer directly
selective distribution
a strategy that includes choosing more than one, but fewer than all possible intermediaries to distribute a company’s market offering
products that have no difference in how they are manufactured
supply chain
a network between a company and its suppliers to produce and distribute a specific product to the final buyer
supply chain management
all members and activities from the procurement and transformation of raw materials into finished goods through their distribution to targeted consumers
a company’s effort to reduce its impact on the environment as products move from source procurement through production through distribution to final consumers
sustainable sourcing
the process of considering suppliers’ social, ethical, and environmental performance
target market coverage
resources and capabilities needed to reach consumers in a company’s target market
third-party logistics (3PL) provider
a company that is contracted by a channel member to handle one or more of the functional areas of logistics; often warehouses, distribution centers, or fulfillment centers that have expertise in managing certain logistical activities
time to ship
also known as order cycle time, the length of time from when a customer places an order to when it reaches them
total number of orders
the sum of all orders that a company received in a given time period
total units in storage
a metric used to evaluate warehouse efficiency that changes as items are sold and leave the warehouse and new inventory moves in
transactional functions
buying, selling, and risk-bearing that goes along with the movement of products along the marketing channel
unit value
the price that a company charges for one unit or item
vertical conflict
a conflict that exists between different levels of a vertical channel
vertical marketing system
companies in the marketing channel that work together in a coordinated, collaborative, and customer-centric way
the stocking, maintaining, and controlling of products while they await the next step in their journey to the final consumer
similar to distributors in that they take ownership of products; buys products in large quantities for the purpose of distributing an assortment of products to retailers
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