Term
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Definition
| The broad principles by which the firm expects to achieve its distribution objectives for its target market(s). Thus, marketing channel strategy is concerned with the place aspect of marketing strategy. |
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Term
| Six basic distribution decisions |
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Definition
1. What role should distribution play in the firm’s overall objectives and strategies?
2. What role should distribution play in the marketing mix?
3. How should the firm’s marketing channels be designed to achieve its distribution objective?
4. What kinds of channel members should be selected to meet the firm’s distribution objectives?
5. How can the external contactual organization (marketing channel) be managed to implement the firm’s channel design effectively and efficiently on a continuing basis?
6. How can channel member performance be evaluated? |
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Term
| 2. Marketing Channel Strategy and the Marketing Mix |
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Definition
Ts = f(P1, P2, P3, P4)
Where
Ts = degree of target market satisfaction
P1 = product strategy
P2 = pricing strategy
P3 = promotion strategy
P4 = place (distribution) strategy |
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Term
| Conditions under which a general case for stressing distribution strategy can be made |
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Definition
1. Distribution is the most relevant variable for satisfying target market demands
2. Parity exists among competitors in the other three variables of the marketing mix
3. A high degree of vulnerability exists because of competitors’ neglect of distribution
4. Distribution can enhance the firm by creating synergy from marketing channels |
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Term
| 3. Channel Strategy and Designing Marketing Channels |
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Definition
| Channel strategy should guide channel design to help the firm attain a differential advantage. |
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Term
| Differential Advantage (also called sustainable competitive advantage) |
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Definition
| Refers to a firm’s attainment of an advantageous position in the market relative to competitors – a place for itself that enables it to use its particular strengths to satisfy customer demands better than its competitors on a long-term (sustainable) basis. |
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Term
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Definition
| What the firm does with its channel planning and decision making to attain the channel position. The key ingredient ... is to view the relationship with channel members as a partnership or strategic alliance that offers recognizable benefits to the manufacturer and channel members on a long-term basis. A well-positioned channel also means that the channel manager will have the confidence and support of the channel members in his or her attempt to gain a differential advantage. The channel positioning strategy must be of high perceived value to the channel members. |
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Term
| 4. Channel Strategy and the Selection of Channel Members |
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Definition
| The approach taken to channel member selection and the particular types of intermediaries chosen to become channel members should reflect the channel strategies the firm has developed to achieve its distribution objectives. Moreover, the selection of channel members should be consistent with the firm’s broader marketing objectives and strategies and may also need to reflect the objectives and strategies of the organization as a whole. This follows because channel members, though independent businesses, are from the customer’s perspective an extension of the manufacturer’s own organization. |
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Term
| 5. Channel Strategy and Managing the Marketing Channel |
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Definition
| Channel management from the manufacturer’s perspective involves all of the plans and actions taken by the manufacturer aimed at securing the cooperation of the channel members in achieving the manufacturer'’ distribution objectives. |
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Term
| Three fundamental strategic questions: |
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Definition
1. How close a relationship should be developed with the channel members?
2. How should the channel members be motivated to cooperate in achieving the manufacturer’s distribution objectives?
3. How should the marketing mix be used to enhance channel member cooperation? |
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Term
| Channel member performance |
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Definition
| The process through which the channel manager should be able to obtain concrete evidence of how well the channel has been designed and managed. Have provisions been made in the design and management of the channel to assure that channel member performance will be evaluated effectively? |
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