MKTG Final CH12

Breaking Bulk

Dividing larger quantities of goods into smaller lots in order to meet the needs of the buyers.

Channel Intermediaries

Firms or individuals such as wholesalers, agents, retailers who help move a product from the producer to the consumer or business user

Channel Leader

A firm at one level of distribution that takes a leadership role, establishing operating norms and processes based on its power relative to other channel members.

Channel Levels

Number of distinct categories of intermediaries that populate a channel of distribution.

Channel of Distribution

The series of firms or individuals that facilitates the movement of a product from the producer to the final customer.

Conventional Marketing System

A multiple-level distribution channel in which channel members work independently of one another.

Creating Assortments

Providing a variety of products in one location to meet the needs of the buyers.


The elimination of some layers of the channel of distribution in order to cut costs and improve the efficiency of the channel.

Enterprise Resource Planning (ERP Systems)

A software system that integrates info from across the entire company (finance, order fulfillment, manufacturing and transportation) and then facilitates sharing of the data throughout the firm.

Exclusive Distribution

Selling a product only through a single outlet in a particular region.

Facilitating Functions

Functions of channel intermediaries that make the purchase easier for the customers and manufacturers.

Horizontal Marketing System

An arrangement within a channel of distribution in which two or more firms at the same channel level work together for a common purpose.

Hybrid Marketing System

Uses a number of different channels and communication methods to serve as target market.


A practice in which a company contracts with a specialist firm to handle all or part of its supply chain operations.

Intensive Distribution

Selling a product through all suitable wholesalers or retailers that are willing to stock and sell the product.

Inventory Control

Activities to ensure that goods are always available to meet customers' demands.

Just in time (JIT)

Inventory management and purchasing processes that manufactures and resellers use to reduce inventory to very low levels and ensure that deliveries from suppliers arrive only when needed.


The process of designing, managing, and improving the movement of products through the supply chain.

Merchandise agents or brokers

Channel intermediaries that provide services in exchange for commissions but never take title to the product.

Merchant Wholesalers

Intermediaries that buy goods from the manufacturers and sell to retailers and other B2B customers.

On-line distribution piracy

The theft and unauthorized repurposing of intellectual property via the internet.

Order Processing

The series of activities that occurs between the time an order comes into the organization and the time a product goes out the door.

Radio Frequency Identification (RFID)

Product tags with tiny chips containing information about the item's content, origin, and destination.

Selective Distribution

Distribution using fewer outlets than intensive distribution but more than exclusive distribution.

Slotting Allowance

A fee pain in exchange for agreeing to place a manufacturer's products on a retailer's valuable shelf space.

Supply Chain

All the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer.

Supply Chain Management

The management of flows among firms in the supply chain to maximize total profitability.

Take Title

To accept legal ownership of a product and assume the accompanying rights and responsibilities of ownership.


The mode by which products move among channel members.

Value Chain

A series of activities involved in designing, producing, marketing, delivering, and supporting any product. Each link in the chain has the potential to either add or remove value from the product the customer eventually buys.Value chain is a larger concept than supply chain.

Vertical Marketing System (VMS)

A channel of distribution in which there in formal cooperation among members at the manufacturing, wholesaling, and retailing levels.


Storing goods in anticipation of sale or transfer to another member of the channel of distribution.

Wholesaling Intermediaries

Firms that handle the flow of products from the manufacturer to the retailer or business user.