Marketing Management - Chapter 13

A ________ channel consists of a manufacturer selling directly to final customers through door-to-door sales, home parties, mail orders, telemarketing, TV selling, itnernet selling, manufacturer-owned stores, and other methods.

Zero-level channel / Direct marketing channel

________ conflict involves conflict between members at the same level within the channel.

a.) Horizontal channel

___________ are sets of interdependent organizations involved in the process of making a product or service available for use or consumption.

a.) Marketing Channels

A firm might choose __________ when it wants to maintain control over the service level and service outputs offered by the resellers.

a.) exclusive distribution

transportation companies, independent warehouses, banks, advertising agencies are all examples of __________, where they assist in distribution, but neither take title to goods nor negotiate purchases or sales.

facilitators

Some functions (storage and movement, title, and communication) constitute a _________ of activity from the company to the customer

forward flow

___________ organize groups of independent retailers to better compete with large changs through standardized selling practices and buying economies.

wholesaler-sponsored voluntary chains

_________ distribution places offerings in as many outlets as possible.

Intensive

_______ is a system of partnerships and alliances that a firm creases to source, augment, and deliver its offers

value network

_______ channel conflict occurs between different levels of the channel.

vertical

A _________ includes the producer, wholesaler, and retailer acting as a unified system.

vertical marketing system (VMS)

________ is the average time customers wait for receipt of goods. Customers increasingly prefer faster.

waiting and delivery time

A _______ vertical marketing system (VMS) successive stages of production and distribution through one member's size and power.

Administered

________ consists of an independent producer, wholesaler, and retailer. Each is a separate business seeking to maximize its own profits, even if this goal reduces profit for the system as a whole.

Conventional Marketing Channel

A _______ vertical marketing system (VMS) combines successive stages of production and distribution under one owner.

Corporate

_______ distribution means severely limiting the number of intermediaries. This is appropriate when the producer wants to control resellers' service level and outputs.

Exclusive

________ channels occurs when a single firm uses two or more marketing channels to reach customer segments

Hybrid channels / Multichannel marketing

_______ are the number of units the channel permits a typical customer to purchase on one occasion. Ex: In buying cars for its fleet, Hertz prefers a channel from which it can buy a large ______; whereas a household only wants a channel that permits a ____ of one.

Lot size

In a _________ strategy, the manufacturer uses advertising and other communications to persuade consumers to demand the product from intermediaries, thus inducing the intermediaries to order it. Appropriate with: - high brand loyalty - high involvement in the category - consumers perceive differences between brands - brand choices are made before a trip to the store

Pull

_____ strategy uses the manufacturer's sales force, trade promotion money, or other means to induce intermediaries to carry, promote, and sell the product to end users. Appropriate with: - low brand loyalty - brand choice is made in the store - the product is an impulse item -product benefits are well understood.

Push

_______ distribution relies on only some of the intermediaries willing to carry a particular product.

Selective

Mini-Case 13-2 The Hanlon brothers of Minnesota decided to revive an extinct motorcycle brand, the once-proud Excelsior-Henderson. They raised millions of dollars from stock sales and got the state to subsidize them for millions more. They spent lots of the raised money announcing the future coming of the bike, creating high awareness at rallies and race events. In 2000, after nearly 4 years of work, they introduced their first model , the Big X, through test rides at the Black Hills Rally in Sturgis, South Dakota, and at the Laughlin River Run in Laughlin, Nevada. Interested buyers were shown maps with a small network of about 80 U.S. dealers who had agreed to stock the bikes, and the Hanlons promised more to come. However, purchasers who had interest and the money to purchase hesitated about the quality and stability of the proposed dealership network and the bike never sold enough units to keep the company alive. Within months the company went bankrupt, probably not due to a lack of good product, but rather due to a lack of good distribution. Refer to Mini-Case 13-2. The number of intermediaries suggests what type of distribution?

a.) selective

______ such as brokers, manufacturers' representatives, and sales _____ search for customers and may negotiate on the producer's behalf, but do not take title to the goods

agents

When 50 independent hardware stores formed a new business entity to provide them with the services of the wholesaler, this was an example of ___________.

b). retailer cooperatives

___________ distribution consists of the manufacturer placing the goods or services in as many outlets as possible.

b.) Intensive

Penguin sells books through Amazon.com's online store, this is an example of using a __________.

b.) one-level channel

Some functions (ordering and payment) constitute a _______ off activity from customers to the company

backward flow

Bodyshop produces a line of all-natural lotions and soaps, and is trying to choose between using its own sales force and hiring manufacturers' representatives to sell its products to non-Bodyshop distributors. Bodyshop has come to the realization that it can more easily direct its sales force's efforts, the products emphasized, and how accounts are managed if it sets up its own sales force. This company is evaluating its choice on the basis of ___________ criteria.

e.) control

If a manufacturer is concerned with the breadth of the assortment its distributor can provide customers, the manufacturer is expressing a concern about the ___________ the distributor provides.

e.) product variety

_____ companies are existing companies that have added an online site for information or e-commerce.

brick-and-click

Franchise operations, such as Krispy Kreme, Papa John's Pizza, and H&R Block, are examples of ___________.

c.) contractual VMSs

A marketing channel intermediary knows its customers want to be able to buy in large quantity, so it needs to be especially concerned about the ___________ it provides to customers.

c.) lot size

Joe Montes hand-makes guitars and sells them to retailers and also recently began to sell them to the final customer at www.montesguitars.com. The retailers aren't happy about the Internet sales because they claim the direct marketing sales are adversely affecting their in-store sales. This is an example of ___________ conflict.

c.) multichannel

Mini-Case 13-2 The Hanlon brothers of Minnesota decided to revive an extinct motorcycle brand, the once-proud Excelsior-Henderson. They raised millions of dollars from stock sales and got the state to subsidize them for millions more. They spent lots of the raised money announcing the future coming of the bike, creating high awareness at rallies and race events. In 2000, after nearly 4 years of work, they introduced their first model , the Big X, through test rides at the Black Hills Rally in Sturgis, South Dakota, and at the Laughlin River Run in Laughlin, Nevada. Interested buyers were shown maps with a small network of about 80 U.S. dealers who had agreed to stock the bikes, and the Hanlons promised more to come. However, purchasers who had interest and the money to purchase hesitated about the quality and stability of the proposed dealership network and the bike never sold enough units to keep the company alive. Within months the company went bankrupt, probably not due to a lack of good product, but rather due to a lack of good distribution. . Refer to Mini-Case 13-2. Which of the following is a reason the Hanlons tried to build a network of dealers rather than create their own dealerships?

c.) they lacked the financial resources to carry out direct marketing

_______ is generated when one channel member's actions prevent another channel member from achieving its goal.

channel conflict

_________ occurs when channel members are brought together to advance the channel's goals, as opposed to their own potentially incompatible goals.

channel coordination

_________ is the ability to alter channel members' behavior so they can take actions they would not have taken otherwise.

channel power

A ______ vertical marketing system (VMS) consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis. Ex: Papa John's, H&R Block, and Krispy Kremes.

contractual

The company should first think of the target market, however, and then design the supply chain backward from that point, a strategy called _____________.

demand chain planning

. ___________ means having a skilled, neutral third party reconcile the two parties' interests.

e.) Mediation

________ link several successive stages in the production-distribution process. Ex: Ford & its dealers/

franchise organizations

_______ channel conflict occurs between channel members at the same level.

horizontal

When two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity, this is called the _____________.

horizontal marketing system

______ is the particular set of marketing channels a firm employs, and decisions about it are among the most critical ones management faces.

marketing channel system

________ such as wholesalers and retailers buy, take title to, and resell the merchandise.

merchants

_______ calls for the producer to establish a price list and schedule of discounts and allowances that intermediaries see as equitable and sufficient.

price policy

________ is the assortment provided by the marketing channel. Normally, customers prefer a greater assortment, although too many choices can also create a negative effect.

product variety

_____ companies are those that have launched a Web site with out any previous existence as a firm. Ex: search engines, internet service providers, content sites

pure-click

___________ are retailers that take the initiative and organize a business entity to carry on wholesaling an possibly some production.

retailer cooperatives

_______ channels are important to: 1. reuse products 2. refurbish products for resale 3. recycle products 4. dispose of products

reverse-flow channels

_____ are add-on services provided by the channel. Ex: credit, delivery, installation, repairs

service backup