PCM Distribution & Channel Management Flashcards

A wholesaler's primary role in a distribution channel is to:

Answer: Purchase goods in bulk from manufacturers and resell them to retailers

Wholesalers act as an intermediary layer that breaks bulk shipments into smaller lots, making it economical for retailers to stock diverse products.

Channel conflict occurs when:

Answer: Two or more channel members disagree over roles, territories, or margins

Channel conflict can be horizontal (between same-level members) or vertical (between different levels), and often arises over pricing, territory, or direct-to-consumer moves by manufacturers.

A Vertical Marketing System (VMS) is characterized by:

Answer: Channel members at different levels working as a coordinated, unified system

In a VMS, producers, wholesalers, and retailers act as a unified whole to reduce conflict and improve distribution efficiency.

Omnichannel distribution focuses on:

Answer: Delivering a seamless, integrated customer experience across all channels—online, mobile, and physical

Omnichannel strategy ensures that whether a customer shops in-store, via app, or online, the experience and inventory information are consistent and connected.

In a franchise distribution system, the franchisor:

Answer: Grants franchisees the right to operate under its brand and business system

The franchisor provides brand rights, training, and operational systems while franchisees invest capital and operate individual units.

What is the primary advantage of using a pull distribution strategy?

Answer: Consumer demand created by direct promotion pulls the product through the channel

A pull strategy invests in consumer-facing advertising so that customers request the product from retailers, who then order it from manufacturers.