CLEP Principles of Marketing Study Notes

An example is walmart which has a strong influence

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An example is Walmart, which has a strong influence over the manufacturers in its marketing channels . Horizontal Integration -process of combining distribution channel members which are at the same level under one management. Involves acquiring firms on the same level of the distribution channel, as opposed to vertical integration, where different levels are combined under one management. An example of horizontal integration is a grocery store owner buying several other grocery stores. Dual Distribution (aka: Multiple Channel) - a producer distributes the same product through two or more different channels, or sells similar products through different channels under different brand names to reach the same target market. Can be used as a way to increase market coverage or reach new market segments. An example could be where a firm uses retailers where they are available, and then uses a direct channel by creating its own retail outlets where other retailers are not available. Consumerism - movement which seeks to protect and inform consumers about products, and has resulted in safer products, and honest packaging and advertising. Channel Control ( aka: Channel Power) - ability to influence another distribution channel member's actions. May come through the market power the firm wields, or it could be established by the channel's decision making structure. For example, in a Corporate channel, the company which owns all the levels of the channel has the channel power. Channel Conflict – disagreements arise between members over channel practices & policies. A push policy of product promotion involves the producer promoting the product only to the next institution down the marketing channel Each member of the distribution channel promotes the product to the next member down the channel. For example, the producer promotes the product to the wholesaler, the wholesaler promotes to the retailer, and the retailer to the customer. A Pull policy of product promotion is where the producer promotes directly to consumers with the intention of developing a strong consumer demand for the products. Intended to "pull" the goods down through the channel by creating demand at the consumer level. The consumers want to get the products at retail stores, so retail stores go to the wholesalers, who in turn go to the producers to buy the product. This is in contrast to the producer "pushing" the product down the channel. Total-cost approach to physical distribution - looking at the distribution system as a whole--taking into account the costs of transportation, materials handling, order processing, and inventory management. Places the emphasis on minimizing the total cost of the entire distribution system, as opposed to trying to lower the costs of the individual functions. This is more effective because decreasing costs in one area of distribution often raises them in another.
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