Number of flashcards in this category: 40.
1.	discrepency of assortment		producers normally specialize into one product (e.g. golf balls), whereas a customer wants a variety of golf items. Distributors need to adjust for this.
2.	channel		A path that takes the product from producer to end user. Goal: efficiency
3.	Li & Fung		- "sourcing" - you supply idea, they "get it done" - "own nothing" model: they just join together parts of the chain, but don't actually do anything. (management-like) - their value: knowledge and access to collaborators - delivering "store ready" if possible
4.	channel conflict: horizontal		Multiple outlets on the same level (like selling through grocery, versus warehouse/clubhouse.) Problem with maintaining business & margins.
5.	PD concept		physical distribution system says that whole channel system should be coordinated
6.	administered VMS		"detroit model" Tightly clustered and controlled suppliers. (You have strong influence and virtually tell them what to do in order to get you as a customer, but you don't actually own them.) - Basically run, but not own.
7.	discrepency of quantity		different between quantity that producer comfortably produces, and quantity that final users want (tires)
8.	multichannel distribution		use of several competing channels to reach end users (sell to retain chains, and also smaller individual stores)
9.	physical distribution/logistics		the transporting, storing, and handling of goods
10.	"the soft"		The value between cost of factory product and final retailing price. (Essentially, all the potential profit that can be gained.) Intermediaries (Li & Fung) try to snap up as much of this as possible.
11.	corporate channel system		corporate ownership down the entire line (complete ownership)
12.	role of distribution intermediary		Instead of three companies each having three customer contacts, each company has ONE intermediary who knows the three customers. One both ends, have to deal with fewer links and the intermediary handles them all. Pares down from 81 mil to 100,000 links.
13.	reverse channels		ways to receive back products consumers don't want (recalls)
14.	selective coverage		- through multiple but not all reasonable outlets - less retail loyalty; but allows company to limit price competition - most popular, ability to avoid working with those wholesalers who make small orders, demand too much service, poor credit, don't do satisfactory job
15.	desirable: ideal market exposure		makes product just available widely enough for target customers, but no more
16.	exclusive coverage		- through a single middleman/retailer - high influence on final sale price/style - high margins - limited reach - selection of only one middleman in each geographic area, usually involves an agreement
17.	contractual channel system		Agree to work together under contract.
18.	horizontal arrangement legality		Horizontal arrangements among competing retailers to limit sales by customer territory is illegal.
19.	traditional channel system		channel members don't work together; competition and variety of goals
20.	JIT		"just in time"
21.	piggyback service		Loading truck trailers onto railcars.
22.	direct marketing		sell directly to individual customers - online - catalogs - web site orders - b2b
23.	breaking bulk		Sell large amount to a distributor (not end user, b/c end user doesn't need that much), so the distributor can break into smaller chunks and sell it where it needs to go.
24.	channel conflict: vertical		producer: wants to sell most of own goods wholesaler: wants to sell most of goods retailer: wants to sell at the highest margin ^ Varying goals.
25.	corporate vertical mktg system		Combines stages of production under one management. E.g. own the fabric, design, manufacturer and retail outlets for a clothing comp. - Advantage: control every stage, can often maintain margins - Disadvantage: inefficient if need to produce high scales, expensive to expand, may still not unify goals across channels, reduces flexibility (you now have hard assets)
26.	freight forwarders		combine small shipments into more economical shipping quantities.
27.	administered channel system		informally agree to work together. Can appoint a manager to oversee.
28.	total cost approach		identifying ALL costs of every alternative; ex: vegetable company; more costly airshipping but less spoilage
29.	private/public warehouses		private: leased by companies, expensive, for regular use public: temporary, no regular need for space, (ex: seasonal businesses)
30.	containerization		grouping individual items into an economical shipping quantity and packaging
31.	distribution trends		Growth in direct mktg. **Downstream power shift** retailers now have a ton of power.
32.	regrouping (4)		1. accumulating - collecting products from many small producers (gathering coffee, bringing together Dutch art) 2. bulk breaking 3. sorting - separate products into grades, each of which goes for a different market. 4. assorting - gathering together a variety of products that one segment might want (trucks and trailors and fertilizer and seed)
33.	intensive coverage		- distribution through as many reasonable outlets as possible - low selling effort - easy to stock
34.	intermediaries (4)		1. agents/brokers: negotiate sales between two companies (never actually takes the goods) 2. wholesaler: takes good and resells 3. retailers: sell to end users 4. facilitators: FedEx, UPS, never own the goods but plays a role in transporting them
35.	indirect marketing		goes through a set of intermediaries (dealers, distributors, agents)
36.	waterways, pipelines		cheapest, important for nonperishable heavy materials; limited by frozen (weather)
37.	customer service level		Distributors need to get products where they're needed when they're needed. Lost sales add up fast! Tradeoff between faster/more expensive delivery and more interested customers, or TOO expensive.
38.	disintermediation		Cut out intermediaries (but still need their function) - e-commerce (cuts out some of the wholesaler/retailer part: self sale on own website) - channel commerce radiohead offers direct download. Many stores are being disintermediated.
39.	% of cost that is distribution		30-50% of costs are distribution. Least flexible to change. Could take years to modify. (e.g. contracts betw. dealers and manufacturers)
40.	Place Example Companies		IKEA - cut out intermediaries. Walmart - power of retailer.