Chapter 15 Review

Possession Utility*

Intermediaries add it by doing whatever is necessary to transfer ownership from one party to another, including providing credit. Activities associated with it include delivery, installation, guarantees, and follow-up service.

Service Utility*

Intermediaries add it by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time. Sze Leung bought a Mac from Apple for his home office. The Apple store Leung used continues to offer help whenever he needs it.

Form Utility*

The process of increasing the attractiveness of a product to a group of consumers by altering its physical appearance. In a business context, it might involve making a product ready for consumption by converting it that is more beneficial to consumers than the raw materials used to make it.

Merchant wholesalers*

are independently owned firms that take title to the goods they handle. About 80 percent of wholesalers fall in this category.

Wholesalers*

are marketing intermediaries that sells to other organizations, such as retailers, manufacturers, and hospitals. Wholesalers are part of the B2B system.

Agents/brokers*

are marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods—that is, at no point do they own the goods. Think of real estate agents as an example.

Channel of distribution*

consists of a set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.

Supply Chain*

consists of all the linked activities various organizations must perform to move goods and services from the sources of raw materials to ultimate consumers.

Electronic retailing*

consists of selling goods and services to ultimate consumers online.

Rack jobbers*

furnish racks or shelves full of merchandise, like music, toys, hosiery, and health and beauty aids, to retailers.

Direct marketing*

includes any activity that directly links manufacturers or intermediaries with the ultimate consumer. It includes direct mail, catalog sales, and telemarketing as well as online marketing.

Social commerce*

is a form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services

Materials Handling*

is the movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations.

Logistics*

is the planning, implementing, and controlling of the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Telemarketing*

is the sale of goods and services by telephone. Many companies use it to supplement or replace in-store selling and complement online selling

Contractual distribution system*

members are bound to cooperate through contractual agreements.

Corporate Distribution Center*

one firm owns all the organizations in the channel of distribution.

Promotional Mix*

one of the 4 Ps of the marketing mix. It consists of public relations, advertising, sales promotion and personal selling. They are used as tools to communicate to the target market and produce organizational sales goals and profits.

Place Utility*

The process of increasing the attractiveness of a product to a group of consumers by altering its physical location. In a business context, it might involve shipping a finished product to a new location that is more accessible to consumers than the place where it was initially manufactured.

Time Utility*

Utility of a good or service created by its availability at a particular time.

Administered Distribution center*

a system in which producers manage all the marketing functions at the retail level.

Intensive distribution*

puts products into as many retail outlets as possible, including vending machines.

Direct selling*

reaches consumers in their homes or workplaces

Cash-and-carry wholesalers*

serve mostly smaller retailers with a limited assortment of products.

Drop shippers*

solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.

Wholesaler-sponsored chains*

such as Ace Hardware and IGA food stores. Each store signs an agreement to use the same name, participate in chain promotions, and cooperate as a unified system of stores, even though each is independently owned and managed.

Retail cooperatives*

such as Associated Grocers. This arrangement is much like a wholesaler-sponsored chain except it is initiated by the retailers. The same degree of cooperation exists, and the stores remain independent. Normally in such a system, retailers agree to focus their purchases on one wholesaler, but cooperative retailers could also purchase a wholesale organization to ensure better service.

Franchise systems*

such as McDonald's, KFC, Baskin-Robbins, and AAMCO. The franchisee agrees to all the rules, regulations, and procedures established by the franchisor. This results in the consistent quality and level of service you find in most franchised organizations.

Basic points about intermediaries (3)

1. Marketing intermediaries can be eliminated, but their activities can't; that is, you can eliminate some wholesalers and retailers, but then consumers or someone else would have to perform the intermediaries' tasks, including transporting and storing goods, finding suppliers, and establishing communication with suppliers. 2. Intermediary organizations have survived because they perform marketing functions faster and more cheaply than others can. 3. Intermediaries add costs to products, but these costs are usually more than offset by the values they create.

Marketing intermediaries*

are organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C). They're called intermediaries because they're in the middle of a series of organizations that join together to help distribute goods from producers to consumers.

Reverse Logistics*

brings goods back to the manufacturer because of defects or for recycling materials

Inbound*

brings raw materials, packaging, other goods and services, and information from suppliers to producers.

Exclusive Distribution*

is the use of only one retail outlet in a given geographic area. The retailer has exclusive rights to sell the product and is therefore likely to carry a large inventory, give exceptional service, and pay more attention to this brand than to others.

Outbound*

manages the flow of finished products and information to business buyers and ultimately to consumers like you and me.

Retailers*

organizations that sell to ultimate consumers

Information Utility*

the communication that companies engage in with customers to trigger buying activity and to manage purchasing processes. Companies use promotional messages delivered through advertising and public relations to share company, product or service information. Salespeople, packaging, etc...

Selective distribution*

uses only a preferred group of the available retailers in an area.