Chapter 14 - Distribution Decisions

exclusive dealing

A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers

Restricted Sales Territories Tying Agreements Exclusive Dealing Refusal to Deal

Channel management practices frequently subject to legal restraint include:

recycling

Converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products

more dominant

Current marketing traditions have allowed retailers to become ...

shorter

For Organizational (Business to Business) Markets, Channels Tend to Be

producers

Making quantities Limited assortment Customers Tiny Q Vast Variety 2 Mismatches

time, rental, exchange

Marketing channels serve many functions. They create _______, place, and possession utilities by making products available when and where customers want them Providing customers with access to product use through sale or ________ Marketing intermediaries facilitate __________ efficiencies, often reducing the costs of exchanges by performing certain services and functions

wholesaler

Middleman whose customers are business

retailer

Middleman whose customers are people or consumers

place

Often misunderstood Taken for granted About half of marketing costs Least flexible of the four Ps

customer, product, environmental

Selecting an appropriate marketing channel is a crucial decision for supply chain managers. To determine which channel is most appropriate to use, managers must think about: _____________ characteristics ____________ attributes Type of Organization Competition _____________ forces Characteristics of Intermediaries

distribution

The _____________________ components of the marketing mix focuses on the decisions and activities involved in making products available to customers when and where they want to purchase them.

purchasing

The act of negotiating and executing transactions to buy and sell goods, materials, and services

keep the large customers for themselves

The bigger the customers, the more the manufacturers have more of an incentive to..

warehousing

The design and operation of facilities for storing and moving goods

multichannel distribution

The use of a variation of marketing channels to ensure maximum distribution Increasingly used to reach target customers wherever and whenever they may chose to interact with a company or its products

wholesalers

They buy and resell products to other wholesalers, retailers, and business customers

radio frequency identification

Using tags and readers that use radio waves to identify and track tagged materials

manufacturers

Which one, Wholesalers, retailers, or manufacturers had more dominance in the civil war period?

wholesalers

Which one, Wholesalers, retailers, or manufacturers had more dominance in the revolutionary period?

third party logistics firms

have special expertise in core logistics activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently.

inventory management

involves developing and maintaining adequate assortments of products to meet customers' needs.

logistics management

involves planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and information from the point of origin to consumption in order to meet customers' needs and wants

logistics

involving physical distribution, relates to planning, implementing, and controlling the effectivie flow and storage of products.

selective distribution

only some outlets in an area are chosen to distribute a product.

intensive distribution

producers strive to make a product available to all possible dealers.

retailers

purchase products and resell them to ultimate consumers

supply chain management

refers to coordination of all the activities involved with the flow and transformation of supplies, products, and information through the supply chain the ultimate consumers. Integrates the functions of operations management, logistics, procurement, and marketing channel management so that goods and services are produced and distributed in the right: Quantities Locations Time

procurement

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

electronic data interchange

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

tying agreements

An 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

costs, customer satisfaction

An efficient logistics systems is an important component of an overall marketing strategy because it can decrease ___________ and increase ________ _____________

just in time

An inventory management approach in which supplies arrive just when needed for production or resale

vertical integration

Combines two or more stages of the marketing channel under one management

direct distribution channels

Commonly used in marketing Also used are channels containing industrial distributors, manufacturers' agents, and a combination of agents and distributors

private warehouses

Company operated facilities for storing and shipping their own products

digital distribution

Delivering content through the internet to a computer or other device It is important to recognize that the line between different marketing channels is becoming increasingly blurred

inventory management

Developing and maintaining adequate assortments of products to meet customers' needs

channel captain

Each channel member performs a different role in the system and agrees to accept certain rights, responsibilities, rewards, and sanctions for nonconformance. Although many marketing channels are determined by consensus, some are organized and controlled by a single leader, or ...

transit

Efficient logistics systems can decrease costs and __________ time while increasing customer service

megacarriers

Freight transportation firms that provide several modes of shipment

retailers and wholesalers

In most channels of distribution, producers and consumers are linked by marketing intermediaries Two types are:

distribution center

Large, centralized warehouses hat focus on moving rather than storing goods

freight forwarders

Organizations that consolidate shipments from several firms into efficient lot sizes

materials handling

Physical handling of tangible goods, supplies, and resources

public warehouses

Storage space and related logistics facilities that can be leased by companies

true

T or F: Channels of distribution are broadly classified as channels for consumer products and channels for business products Within these two categories, different channels are used for different products

true

T or F: Distribution of business products differs from that of consumer products in the types of channels used

true

T or F: Federal, state, and local laws regulate channel managers to protect competition and free trade. Courts may prohibit or permit a practice depending on whether it violates this underlying principle.

true

T or F: Logistics managers must strive to find the optimal level of inventory to satisfy customers needs while keeping costs down. Materials handling the physical handling of products is a crucial element in warehousing and transporting products

true

T or F: Most producers have multichannel distribution systems that can be adjusted for various target markets

channel captain

The dominant leader of a marketing channel or a supply channel A marketing channel functions most effectively when members cooperate. When they deviate from their roles, channel conflict can arise

transportation

The movement of products from where they are made to intermediaries and end users

sourcing

The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity

order processing

The receipt and transmission of sales order information

intermodal transportation

Two or more transportation modes used in combination

intensive distribution

Using all available outlets to distribute a product A marketing channel is managed such that products receive appropriate market coverage.

illegal

When these practices strengthen weak competitors or increase competition among dealers, they may be permitted. In most other cases, when competition may be weakened considerably, they are deemed ........

retailers

Which one, Wholesalers, retailers, or manufacturers has more dominance in the current market?

Middlemen can often perform functions more efficeintly

Why Not Just Eliminate Middlemen?

larger quantity and at a lower cost

Why Not Just Eliminate Middlemen? Number of transactions Economies of scale - Cost efficiencies Middlemen are performing at a ....

There's a smaller number of customers that are larger and tend be located near each other

Why are the fewer amounts of middlemen in business to business markets?

wholesaler, producer, third party

Within the marketing channel, logistics activities are often performed by a _____________, but they may also be performed by a ___________ or retailer or outsource to a ________ ______________

marketing channel

a group of individuals and organizations that direct the flow of products from producers to customers Major role is to make products available at the right time, at the right place, and in the right amounts

vertical marketing system

a marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers

order processing

a series of steps from receipt of a sales order to the successful delivery of the product or service It consists of three main tasks Order entry Order handling Order delivery That may be done manually but are more often handled through electronic data interchange systems

strategic channel alliance

an agreement whereby the products of one organization are distributed through the marketing channels of another

physical distribution

an important part of logistics and includes activities used to move products from producers to customers and other end users.

industrial distributor

an independent business organization that takes title to industrial products and carries inventories

horizontal integration

combines institutions at the same level of channel operation under a single management

supply chain

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

operations management

the total set of managerial activities used by an organization to transform resource inputs into goods, services, or both.

exclusive distribution

usually gives a single dealer rights to sell a product in a large geographic area