Ch 15 MKTG

information sharing

_____ has reduced costs and increased speed, flexibility and cooperation

intermediaries

_____ provide valuable assistance because of their access to and control over important resources used in the proper functioning of marketing channels

10

_____% of companies total expenses are freight charges

industrial distributors

______ are used when product has broad market appeal, is easily stocked and serviced, is sold in small quantities, and is needed on demand to avoid high losses

technology

______ has improved supply chain management capabilities on a global basis

efficient materials handling

_______ can reduce costs, the number of times a good is handled, improve customer service and increase customer satisfaction

large size

_______ in horizontal channel integration may decrease flexibility, increase coordination problems and require additional research and planning

reducing cycle time while reducing costs

a winning combo in supply chains and ultimately leads to greater customer satisfaction?

channel power

ability of one channel member to influence another member's goal achievement; channel captain must possess this

channel management

all activities related to selling,service and the development of long term customer relationships

just in time (JIT)

an inventory management approach in which supplies arrive just when needed for production or resale; maintain low inventory, no safety stock; requires high coordination; ex: Chrysler, Harley Davidson, Dell Compouter

marketing information activity performed by intermediaries

analyze sales data and other information in databases and information systems. Perform or commission marketing research

administered VMS

channel members are independent but a high level of interorganizational management is achieved through informal coordination; may adopt uniform accounting or ordering procedures; ex: Intel, Kellogg, Magnavox have influence over distributors and manufacturers

containerization

consolidation of many items into single large container that is sealed at its point of origin and opened at its destination

outsourcing

contracting of physical distribution tasks to third parties

warehousing

design and operation of facilities for storing and moving goods

inventory management

developing and maintaining adequate assortments of products to meet customer's needs

Producer to Consumer

direct movement of products from producer to consumers; ex:Omaha Steaks

environmental forces

economic conditions, new technologies, government regulations have effects on what channel to use

ebay

example of marketing intermediary between Internet sellers and buyers

walmart, toyota, jcpenny

experts at logistics

customer relationship management

exploit the information from supply chain partners information systems to help all channel members make marketing strategy decisions that develop and sustain desirable customer relationships

safety stock

extra inventory a firm keeps

channel partnerships

facilitate effective supply chain management when partners agree on objectives, policies and procedures for physical distribution efforts associated with the supplier's products; eliminate redundancies and reassign tasks for maximum systemwide efficiency

marketing mix

marketing channel decisions are a powerful influence on the rest of the ___________

long term commitments

marketing channel decisions are generally ________, that are difficult to change or undo

exchange efficiencies

marketing channels facilitiate _______

activities performed by marketing intermediaries

marketing information, marketing management, facilitating exchanges, promotion, price, physical distribution

marketing intermediaries

middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products; play key roles in customer relationship management

unit loading

one or more boxes are placed on a pallet or skid; these units can be loaded by forklifts, etc

operations management

organizational and systemwide coordination of operations and partnerships to meet customers product needs

freight forwarders

organizations that consolidate shipments from several firms into efficient lot sizes

materials handling

physical handling of tangible goods, supplies and resources; involves transportation from points of production to points of consumption

refusal to deal

producers have right to choose channel members they will do business with; but may not refuse to deal with wholesalers or dealers because these wholesalers or dealers resist policies that are anticompetitive

strategic channel alliance

products of one organization are distributed through the marketing channels of another; products of two firms are often similar; bottled water might be distributed through marketing channel for soft drink

radio frequency id

radio waves are used to track materials using scanners; used by Daisy dairy brand

usage rate

rate at which a product's inventory is used or sold during a specific time period

piggyback

shipping uses both truck trailers and railway flat cars

order entry, order handling, order delivery

three main tasks of order processing

cycle time

time needed to complete a process

marketing channel utilities

time utility, place utility, possession utility, form utility

behavior patterns of buyers

to achieve desired intensity of market coverage, distribution must correspond to ______

45%

transportation is what percentage of total distribution costs

exclusive distribution

using a single outlet in a fairly large geographic area to distribute a product; for specialty products purchased infrequently, consumed over a long period of time, or requiring service and information; only authorized dealers are used; ex: BMW dealers

intensive distribution

using all available outlets to distribute a product; for most convenience products, multiple channels may be used; ex: Gum, Coke

dual distribution

using two or more marketing channels to distribute same products to same target market; runs the risk of being viewed as anticompetitive;

stabilize prices and avaliability of seasonal items

warehousing helps _____

22%

warehousing is what percentage of total distribution costs

trucks

what provide the most flexible schedules and routes of all transportation modes?

channels for consumer products

Producer to Consumers; Producer to Retailers to Consumers; Producer to Wholesalers to Retailers to Consumers; Producer to Agents or brokers to Wholesalers to Retailers to Consumers

channels for business products

Producer to Organizational Buyers; Producer to Industrial Distributors to Organizational Buyers; Producer to Agents to Organizational Buyers; Producer to Agents to Industrial Distributors to Organizational Buyers

long channel

a ________ may be the most efficient distribution channel for some consumer goods

vertical marketing systems (VMSs)

a marketing channel managed by a single channel member to achieve efficient, low cost distribution aimed at satisfying target market customers; takes on corporate, administered or contractual forms

unified supply chain, common objectives

a marketing channel should be viewed as a _________; members should work toward ______

3%

administration is what percentage of total distribution costs

tying agreement

agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well

logistics management

all activities designed to move the product through the marketing channel to the end user, including warehousing and inventory management

supply chain

all the activities associated with the flow and transformation of products from raw materials through to the end customer

physical distribution

also known as logistics, refers to the activities used to move products from producers to consumers and other end users

functions

although wholesalers can be eliminated, their _____ cannot; other channel members must still perform functions and customers still have to pay for them to be done

bonded storage

an arrangement in which imported or taxable products are not released until the products' owners pay US customs, duties, taxes or other fees; enable firms to defer tax payments until they are delivered to customers

order lead time

average time lapse between placing the order and receiving it

product's market presence and buyer's accessibility to the product

channel decisions determine ________

wholesalers

channel leadership roles of _____ were more powerful decades ago

clearly defined

channel member tasks must be ______

waterways

cheapest method of shipping heavy low value goods

facilitating exchanges activity performed by intermediaries

choose product assortments that match the needs of customers. cooperate with channel members to develop partnerships

corporate VMS

combines all stages of marketing channel, from producers to consumers, under a single owner

horizontal channel integration

combining organizations at the same level of operation under one management; ex: owner of dry cleaning firm may buy other dry cleaning establishments

vertical channel integration

combining two or more stages of the marketing channel under one management; effective against competition because of increased bargaining power and shared information and responsibilities

characteristics of intermediaries

companies may choose other intermediaries to better promote their product

private warehouse

company operated facilities for storing and shipping products

strategic issues in marketing channels

competitive priorities; channel integration; channel leadership, coordination and conflict

electronic data interchange (EDI)

computerized means of integrating order processing with production, inventory, accounting and transportation

accept tying arrangements

courts only _________ when supplier is the only one able to provide products of a certain quality and the intermediary can also carry competing products

inefficient and parasitic

critics accuse wholesalers of being ______

factors affecting the selection of a marketing channel

customer characteristics, product attributes, type of organization, competition, marketing environmental forces, characteristics of intermediaries

6%

customer service is what percentage of distribution costs

possession utility

customers have access to the product to use now or store for future use; ex: lease or rental

distribution

decisions and activities that make products available to customers when and where they want to purchase them

raises costs in another area

decreasing costs in one area often ___

P&G and Walmart

effect partnership between 2 companies

organizational success

effective marketing channels required for ______

marketing orientation

effective supply chain management is linked to a _______

market orientation

effective supply chain managment is closely linked to ______

product flow

efficient order processing facilitates ___

channel cooperation

enables retailers, wholesalers, suppliers and logistics providers to speed up inventory replenishment, improve customer service, and cut costs of bringing products to the consumer

price activity performed by intermediaries

establish pricing policies and terms of sale

marketing management activity performed by intermediaries

establish strategic and tactical plans for developing customer relationships and organizational productivity

customer characteristics

ex: businesses buy in larger quantities and more complex products while consumers buy limited quantities and are more direct

type of organization

ex: larger firms may be able to negotiate better with other channel members; small firms may need more distribution centers to reduce delivery time

product attributes

ex: more complex and expensive products such as cars and perishable products like dairy employ short channels; less expensive more standardized products like soft drinks and canned goods can employ longer channels

air transportation

fastest but most expensive form of shipping; used for perishables, high value, low bulk, and emergency shipments

wholesalers and retailers

firms downstream in supply chain

competition

firms may be forced to adopt a strategy to stay competitive

suppliers

firms upstream in supply chain

form utility

formed by assembling, preparing or otherwise refining the product to suit customer needs; ex: assembling cut flowers

megacarriers

freight transportation firms that provide several models of shipments

field public warehouses

furnish security for products that are used as collateral for loans

Producer to Agents or brokers to Wholesalers to Retailers to Consumers

goods pass from producer to agents to wholesalers to retailers and then to consumers; used for mass distribution products such as processed foods

marketing channel

group of individuals and organizations that direct the flow of products from producers to customers within the supply chain

time utility

having products available when the customer wants them; ex: movies on demand

economies of scale

horizontal channel integration creates ______

improving distribution

horizontal channel integration is not the best method for _________

direct channels

in contrast to consumer goods more than half of all business products are sold through _________

industrial distributor

independent business organization that takes title to industrial products and carries inventories; usually sell standardized items

manufacturer's agent

independent business person who sells complementary products of several producers in assigned territories and is compensated through commissions; acts as salesperson on behalf of producers; has little negotiating power

cost to manufacturer; financial burden

industrial distributors can perform at low ______ and reduce producer's

standardized items

industrial distributors usually sell

technology

information ______ has created almost seamless distribution processes

characteristics of product and target market

intensity of coverage depends on _______

24%

inventory carrying is what percentage of total distribution costs

reorder point

inventory level that signals the need to place a new order

operations management, supply management, logistics management, channel management

key tasks in supply chain management

distribution centers

large facilities used for receiving, warehousing, and redistributing products to stores or customers; designed for rapid flow of products; usually one story;

Producer to Wholesalers to Retailers to Consumers

longstanding distribution channel; goods from producer to wholesaler then to retailer and finally to customers; practical for producers that sell to hundreds of thousands of customers through thousands of retailers; ex: Wrigley's chewing gum

place utility

making products available in locations where customers wish to purchase them; ex: bowling ally with sock vending machine

physical distribution activity performed by intermediaries

manage transportation, warehousing, materials handling, inventory control and communication

managing supply chains

management of upstream and downstream activities is involved with

restricted sales territories

manufacturers may try to prohibit intermediaries from selling its products outside of designated sale areas; considered a restraint of trade among intermediaries handling the same brands; promotes competition among dealers handling different brands

pipelines

most automated transportation mode

contractual VMS

most popular type of vertical marketing system; channel members are linked by legal agreements spelling out each member's rights and obligations; ex: franchises such as McDonalds and KFC are this

transportation

movement of products from where they are made to intermediaries and end users; the most expensive physical distribution function

Producer to Retailer to Consumer

moves goods from producer to retailer to consumer; frequent choice of large retailers because allows them to buy in quantity from manufacturers; ex: J Crew, LL Bean, textbooks

intensity of coverage

number and kinds of outlets in which the product will be sold; depends on characteristics of product and target market

logistics management

planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customer's needs and wants

order processing

receipt and transmission of sales order information

supply management

refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition

goals of physical distribution

right goods, right place, right price, right time, right quantity, right support system, cycle time

supply chain management

set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities to the right locations and at the right time

promotion activity performed by intermediaries

set promotional objectives. coordinate advertising, personal selling, sales promotion, publicity, and packaging

stockouts

shortages of products that can result in loss of customers, lower sales, brand switching

exclusive dealing

situation in which a manufacturer forbids an intermediary to carry products of competing manufacturers; three tests: if blocks competitors from 15% of market, if sales volume is large and if producer is larger than retailer than it is anticompetitive

supply management

sourcing of necessary resources, products, and services from suppliers to support all supply chain members

public warehouse

storage space and related physical distribution facilities that can be leased by companies

competitive advantage

supply chains can provide a _______ ;ex: Dell, Amazon, Toyota, WalMart

service

technology has improved _______; increasing the number of innovative goods and the involvement of firms in management supply chain

channel captain

the dominant leader of a marketing channel or a supply channel; may be a producer, wholesaler, or retailer; establish channel policies and coordinate development of marketing mix; ex: Walmart

providing customer satisfaction

the driving force behind marketing channel decisions

major role of marketing channels

to make products available at the right time at the right place in the right quantities

operations management

total set of managerial activities used by an organization to transform resource inputs into products

birdyback

truck trailers and air carriers

fishyback

truck trailers and water carriers

intermodal transportation

two or more transportation modes used in combination

private and public

two types of warehousing

acquire title or take possession of the products

unlike the industrial distributor, the manufacturer's agent does not ______

dual distribution

use of two or more marketing channels to distribute the same products to the same target market; ex: Kelloggs sells directly to retail chains who sell to the customer, as well as to wholesalers who then sell to retail chains and then the customer; firms who sell directly from their own website and from retailers

selective distribution

uses only some available outlets in an area to distribute a product; for shopping products, desirable when a special effort such as customer service is important to customers; ex: tvs, stereos, computers

large geographic area; highly seasonal demand

using a manufacturers' agent and an industrial distributor would be appropriate when producer wishes to cover a ________

channel conflict occurs

when: self interest creates misunderstanding about role expectations of channel members; communication is poor between channel members; increased use of multiple channels has increased the chance for miscommunication and conflict

intermediaries

who are the specialists in facilitating exchanges?