Chapter 12

Value Delivery Network: Is composed of the Company, suppliers, distributor and the customers,
who partner with each other to improve the performance of the entire system in delivering
customer value.

Marketing Channel: Organizations that help make a product available for use by the consumer.
They can add value by providing more efficiency and specialization in making goods.

Key functions channel members do:

1. Information Gathering
2. Promotion
3. Contacting Buyers
4. Matching Products
5. Negotiating agreements
6. Physical distribution, financing
7. Taking risks of carrying out the work

Channel Level: Is a layer (capa) of intermediaries that performs some work in bringing the product
and its ownership closer to the final buyer.

Channel 1: Is the direct marketing channel, a marketing channel that has no intermediary levels.

Indirect Marketing Channels: Are channels containing one or more intermediary channels, echan
channel members depends on others and they behave differently wich can lead with channel
conflict.

Channel Conflict: Disagreement among marketing channel members

- Horizontal conflict: Among firms at the same channel level.

- Vertical Conflict: Between different levels of the same channel.

Conventional distribution Channel: Is a channel consisting of one or more independent

producers, wholesalers (mayoristas) and retailers, each is a separate business to maximize its own
profits.

Vertical Marketing System (VMS): Is a distribution channel in which producers, wholesalers

and retailers act as a unified system. One channel member owns the others, has contracts with
them that they all cooperate, three types.

1. Corporate VMS: Is a vertical marketing system that combines successive stages of

production and distribution under single ownership. Channel leadership is accomplished
through common ownership.
 2. Contractual VMS: System in wich independent firms at different levels of production and
distribution join together through contracts. Most common example is

o Franchise Organization: Contractual marketing system in which a channel

member links several stages in the production-distribution process. Three types:

 Manufacturer-sponsored retailer franchise systems

 Manufacturer - sponsored wholesaler franchise systems
 Firm-sponsored retailer franchise systems.

3. Administered VMS: Vertical marketing system that coordinates successive stages of

production and distribution through the size and power of one of the parties.

Horizontal Marketing System: Another development regarding channel, is a channel

arrangement in which 2 or more companies of one level join together to follow a new marketing
opportunity. Can be with competitors and with non-competitors.

Multichannel Distribution System: Is a distribution system in which a single firms sets up 2 or

more marketing channels to reach one or more customer segments, is beneficial in complex
markets, but also bring additional risks.

Desintermediation: Current changes in the channel organization include disintermediation, is

the cutting out of marketing channel intermediaries, the displacement of traditional resellers by
radical new types of intermediaries.
Chapter 13

Retailing: Includesall the activities involved in selling goods or services directly to final consumer
for their personal, non-business use. Connects brands to consumers in the final steps.

Retailers: Are business whose sales come primarily from retailing

- Self-Service retailers: Serve customers who are willing (dispuestos) to perform part of the
service.

- Limited service retailers: Provide some assistance in the service process.

- Full-service retailers: assist customers in every step of the buying process.

Shopper Marketing: Means using in-store promotions and advertising to extend brand equity to
the last mile, and encourage favorable hi-store purchase decisions.

Classified by the length and breadth (anchura) of their product line:

1. Speciality Store: A retail with a small line of products but with a lot of variability inside
that line.
2. Department Store: Retail organization that carries a wide (amplia) variety of product lines,
each line is separated and managed by specialist buyers.
3. Supermarkets: Are large, low-costs, low-margin, high-volume and self-service store that
carry wide products fruits and products for home.
4. Convenience Stores: Mall stores, located near residential areas, limited line of high
turnover convenience products.
5. Superstore: A store much larger than a regular supermarket that offers a large assortment
(variedad profunda) of a particular line with experts employeds.
6.