Business, Chapter 12

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What is test marketing?

The item is introduced in a limited area supported by a full marketing campaign.

What is commercialization?

The item is made available throughout the marketplace, often called a product launch.

Define logistics.

The process of coordinating the flow of goods, services, and information among members of the supply chain is called logistics.

What is a product mix?

The product mix is a company's assortment of product lines and individual offerings.

Why is the wholesaler important to the distribution of many products?

Wholesaling is a crucial part of the distribution channel for many products, particularly consumer goods and business supplies. The wholesaling function must be carried out although there are many different types of wholesalers

What are the advantages of direct distribution?

t's the shortest and simplest means of connecting a producer and customer.

What is product development?

An actual product is designed and produced, subjected to a series of tests, and revised.

Why is the progression to the last stage of brand loyalty so important to marketers?

Customers who exhibit brand insistence will not buy a substitute brand, assuring marketers of repeat sales.

What is a family brand?

Family branding strategy: A single brand name used for several related products (e.g., KitchenAid).

Benefits of truck shipping?

Fast speed, high dependability in meeting schedules, high frequency of shipments, and very extensive availability in different locations, but high in cost (furniture).

What is business analysis?

Further screening occurs, and the product's potential sales, profits, growth, and competitive strengths are analyzed.

Benefits of pipeline shipping?

High dependability in meeting schedules, high frequency of shipments, and low cost, but slow speed, very limited availability in different locations, and very low flexibility in handling (Oil).

Benefits of rail shipping?

Highly flexible in handling, but low frequency of shipments and low availability in different locations (Clothing made in Thailand and shipped in a container first by ship and then by rail)

What are the six stages of product development?

Idea generation, screening, business analysis, product development, test marketing, commercialization.

What is screening?

Ideas are eliminated if they don't mesh with the firm's objectives or can't be developed with its resources.

What is an individual brand?

Individual branding strategy: Giving each product within a line a different name (e.g., Procter & Gamble products Tide, Cheer, and Dash)

What are the three intensity levels of distribution?

Intensive, selective, and exclusive.

What are the four types of non-store retailers?

Internet retailing, automatic merchandising, direct selling, and direct response.

When is a producer most likely to use direct distribution?

It's more commonly seen in the marketing of relatively expensive, complex B2B products that require demonstrations, but as noted, direct distribution regarding Internet B2C purchases is increasing.

What is the wheel of retailing?

It's the theory that new retailers enter a market by offering lower prices due to reduced service, then gradually add services, and ultimately become targets themselves when new upstarts look to replace them.

Give an example of a product mix

Kellogg's product mix has several product lines in addition to corn flakes─milk bars mixed with cereal, Real Fruit Winders, and Rice Krispies Squares.

What is exclusive distribution?

Limiting market coverage to a single retailer or wholesaler in a specific geographic region, usually involving expensive specialty or luxury goods (example: Harley-Davidson motorcycle, Rolex watch, rare wine or champagne, Tiffany lamp).

What is a manufacturer's brand?

Manufacturer's brand: Brand offered and promoted by a manufacturer (e.g., Tide).

What is selective distribution?

Selecting only a limited number of retailers to distribute a firm's product lines, usually reducing costs for consumer items targeted to specialized markets (example: Burt's Bees Beeswax Lip Balm, Thinsulate socks, Godiva chocolate, Sony PlayStation).

What is internet retailing?

A fast-growing process with sales increasing 15 to 25 percent annually, allows shoppers to order while visiting retailers online (examples: amazon.com, eBay).

How does logistics relate to physical distribution?

A major focus of logistics management is physical distribution, the activities aimed at efficiently moving finished goods from the production line to the consumer or business buyer.

What is a product line?

A product line is a group of related products that are physically similar or are intended for the same market.

What is a wholesaler?

A wholesaler is a distribution channel member that sells primarily to retailers, other wholesalers, or business users.

What are the three stages of brand loyalty?

Brand recognition, brand preference, and brand insistence.

What is idea generation?

Concepts are gathered from customer suggestions, employees, suppliers, researchers, inventors, and even competitors.

Give an example of a product line

Dell added printers, personal digital assistants and a new laptop to its product line, in addition to PCs.

What is direct selling?

Direct-to-customer sales through personal representatives and party-planning methods (examples: The Pampered Chef, Tupperware, Avon).

What is intensive distribution?

Placing a firm's products in nearly every available outlet (examples: Cheerios, Lifesavers, Juicy Fruit, Tide, Ivory soap).

What is a private brand?

Private or store brand: Brand that is not linked to the manufacturer but instead carries a wholesaler or retailer label (e.g., Sears' DieHard batteries).

What is automatic merchandising?

Provides convenience through vending machines and automated service machines (examples: ATMs, Coke and Pepsi vending machines).

What types of products would most likely be shipped through each transport mode?

Rail, water, truck, pipeline, and air

How has the Internet affected the wheel of retailing?

Students are probably familiar with Internet shopping, so they may feel that online retailers don't enter a market due to low prices, but rather due to innovative products, newly created markets, or unusual services.

What is direct response?

This reaches prospective customers through catalogs, telemarketing, and advertising, who then order by phone, mail, computer, or fax (examples: L.L. Bean, J. Crew, Bose radios and speakers).

Benefits of air shipping?

Very fast speed and high dependability in meeting schedules, but very high cost and low flexibility in handling (letters).

Benefits of water shipping?

Very flexible in handling and very low cost, but very slow speed and limited availability in different locations. (Athletic shoes manufactured in China)

Classify each of the following business-to-consumer (B2C) and business-to-business (B2B) products. Then choose one and describe how it could be classified as both. a. Vogue b. Six-pack of bottled water c. delivery truck d. Tech support for communication system e. Day spa f. Thai restaurant

a. Consumer b. Both c. Both d. Business e. Both f. Consumer


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