Marketing Chapter 15

Vendor-managed inventory(VMI)

A customer service strategy used to manage inventory for customers to deliver what the customer needs.

Intensive Distribution

A firm tries to place its products and services in as many outlets as possible. Usually used for convenience products like soda and chips.

Multichannel Marketing

Blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers.

Selective Distribution

Lies between the two other ones. A firm selects a few retailers in a specific geographical area to carry its products. Ex. Dell

Indirect Channel for Consumer Products #1

Toyota--Retailer--Consumer When a retailer is large and can buy in large quantities from a producer or when the cost of inventory makes it too expensive to use a wholesaler.

Forward Integration

When a producer owns the intermediary at the next level down in the channel. Ex. Ralph Lauren who makes clothes and sells them in stores.

Backward Integration

When a retailer owns a manufacturing operation. Ex. Kroger supermarkets operate manufacturing facilities that produce stuff under their label.

Channel Conflict

When one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.

Channel Captain

A channel member (producer, wholesaler, or retailer) that coordinates directs and supports other channel members.

Indirect Channel

Intermediaries are inserted between the producer and consumers and perform numerous channel functions.

Four customer service factors:

1) Time- Time of ordering and receiving the item. 2) Dependability- Consistency of Replenishment. 3) Communication- Buyer and the seller. 4) Convenience- Minimum effort on the buyers behalf.

Transactional Function

1) What an intermediacy does When the intermediacies buy or sell products or services.

Logistical Functions

2) What an intermediacy does A number of functions dealing with movement and storage of goods.

Facilitating Function

3) What an intermediacy does Makes a transaction easier for the buyers.

Horizontal Conflict

A channel conflict that occurs among channel members on the same level.

Vertical Conflict

A channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailer.

Corporate Vertical Marketing System

A system of distribution channel organisation in which the orderly flow of products from producer to end-user is controlled by common ownership of the different levels of the system.

Customer Service

Ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.

Administered Vertical Marketing Systems

Achieve coordination at successive stages of production and distribution by the size and influence of one channel membership rather than through ownership (Walmart).

Logistics

Activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.

Direct Marketing Channels

Allow consumers to buy products by interacting with various advertising media without a face-to-face salesperson.

Dual Distribution

An arrangement whereby a firm reaches different buyers by using two or more different types of channels for the same basic product. Ex. GE sells directly to buyers and also sells through Lowe's.

Marketing Channel

Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.

Disintermediation

Channel conflict that arises when a channel member bypasses another member and sells or buys products direct.

Electronic Marketing Channels

Employ the internet to make products and services available for consumption or use by organizational buyers.

Possession Utility

Entails efforts by intermediaries to help buyers take possession of a product or service.

Total Logistics Cost

Expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling.

Form Utility

Having a product more appealing to buyers, so that they buy it.

Time Utility

Having a product when you want it.

Place Utility

Having a product where you want it.

Contractual Vertical Marketing System

Independent firms at different levels of distribution are tied together by contract to achieve economies of scale and greater sales impact. Most popular of the three.

Indirect Channel for Consumer Products #2

Most common for low-cost, low-unit value items that are frequently purchased by consumers, such as candy... Ex. Mars sells big boxes to wholesalers who break them down...

Indirect Channel for Consumer Products #3

Most indirect channel, when there are many small manufacturers and many small retailers, an agent is used here to help coordinate the sales. Ex. Jewelry

Strategic Channel Alliance

One firm's marketing channel is used to sell another firm's product.

Exclusive Distribution

Only one retailer in a specified geographical area carries the firm's products. Usually used for Gucci and other specialty and high-end products.

Direct Channel

Producer and the ultimate consumer deal with each other directly.

Reverse Logistics

The area of logistics that involves bringing goods back to the manufacturer because of defects or for recycling materials.

Vertical Marketing Systems

The main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs.

Density

The number of stores in a geographical area. There are three types of this:

Supply Chain

The various firms involved in performing the activities required to create and deliver a product or service to organizational buyers.