BUS100 CH13

pipelines

- highly specialized - primarily used to carry petroleum and natural gas

2 main complaints of US advertising

- it is wasteful - can be deceptive

producer to wholesaler to retailer to consumer

- known as the traditional channel - many consumer goods (especially convenience goods) - when products are carried by so many retailers that the producer cannot manage and distribute all of them

waterways

- least expensive - slowest - used mainly for bulky, nonperishable goods

railroads

- least expensive mode for many products - one of the most important modes - usage declined over the years

producer to organizational buyer

- manufacturer's own sales force sells directly to organizational buyers, or business users - heavy machinery, airplanes, major equipment - allows producer to provide customers with expert and timely services, such as delivery, machinery installation, and repairs

advertising is not wasteful

- most effective and least expensive means of communicating product information to a large number of individuals and organizations - encourages competition; thus leading to development of new and improved products, wider product choices, and lower prices - revenues support mass-communication media--newspapers, magazines, radio, tv, effectively paying or news coverage and entertainment programming - provides job opportunities in fields ranging from sales to firm poduction

producer to consumer

- often called the direct channel - no marketing intermediaries - producers sell directly to consumers - can better control the quality and price of their products - can maintain closer relationships with customers

wholesalers help manufacturers by:

- performing functions similar to those provided to retailers - providing a sales force, reducing inventory costs, assuming credit risks, and furnishing market information

chain retailer

a company that operates more than one retail outlet

carrier

a firm that offers transportation services - common carrier: services available to all shippers - contract carriers do not serve the general public - private carrier: owned and operated by shipper

independent retailer

a firm that operate only one retail outlet

television home shoppign

a form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card

superstore

a large retail store that carries not only food and nonfood products ordinarily found in supermarkets but also additional product lines

supermarket

a large self-service store that sells primarily food and household products

warehouse club

a large-scale members-only establishment that combines features of cash-and-carry wholesaling with discount retailing

middleman (or marketing intermediary)

a marketing organization that links a producer and user within a marketing channel - concerned with the transfer of ownership of products

institutional advertising

advertising designed to enhance a firm's image or reputation

selective-demand (or brand) advertising

advertising that is used to sell a particular brand of product

primary-demand avertisign

advertising whose purpose is to increase the demand for all brands of a product within a specific industry

four elements of promotion mix

advertising, personal selling, sales promotion, public relations

freight forwarders

agents that handle transportation - pick up shipments, ensure goods are loaded onto carirers, assume responsibility or their safe delivery

physical distribution

all those activities concerned with the efficient movement of products from the producer o the ultimate user

a full-service wholesaler can be of three different types

general-merchandise, limited-line, specialty-line

supply-chain management

long-term partnership among channel members working together to create a distribution system that reduces inefficiencies, costs, and redundancies while creating a competitive advantage and satisfying customers - category management - encourages cooperation in reducing the costs of inventory, transportation, administration, and handling

creating selling

selling products to new customers and increasing sales to present customers

stock-out costs

sales lost when items are not in inventory

airplanes

- fastest - most expensive - high-value, perishable items or goods that are needed immediately

producer to agent middleman to organizational buyer

- distribute such items as operating supplies, accessory equipment, small tools, and standardized parts - agent is an independent intermediary between the producer and user

wholesalers help retailers by:

- buying in large quantities and selling to retailers in smaller quantities and delivering goods to retailers - stocking in one place the variety of goods that retailers otherwise would have to buy from many producers - providing assistance in other vital areas, including promotion, market information, and financial aid

trucks

- common, contract, private carriers - very popular mode - offers door-to-door service - less stringent packing - flexible delivery schedules

using multiple channels

- different distribution channels to reach different market segments

producer to agent to wholesaler to retailer to consumer

- producers can use agents to reach wholesalers - agents are functional middlemen that do not take title to products and that are compensated by commission paid by producers - often products are inexpensive, frequently purchased items - seasonal products

producer to retailer to consumer

- producers sell directly to retailers when the retailers are large enough to buy in large quantities - most often for products that are bulky - usual channel for perishable products - high-fashion products that must reach the consumer in the shortest possible time

warehousing includes the following activities:

- receiving goods - identifying goods - dispatching goods - holding goods - recalling, picking, and assembling goods - dispatching shipments

characteristics of merchant wholesalers

- usually operate one or more warehouses; sometimes called distributors or jobbers - businesses composed of salespeople, order takers, receiving and shipping clerks, inventory managers, office personnel - must analyze available products and market needs - may be classified as full-service or limited-service wholesalers

major steps in developing an advertising campaign

1. identify an analyze the target audience 2. define the advertising objectives (stated precisely and in quantifiable terms) 3. create the advertising platform (includes important selling points, or features) 4. determine the advertising appropriation (total amount o money designated for advertising in a given time period) 5. develop the media plan (outlines a timetable for advertisements an which media will be use) 6. create the advertising message 7. execute the campaign 8. evaluate advertising effectiveness

personal-selling process

1. prospecting 2. approaching the prospect 3. making the presentation 4. answering objections 5. closing the sale 6. following up

sales promotion objectives

1. to attract new customers 2. to encourage trial of a new product 3. to invigorate the sales of a mature brand 4. to boost sales to current customers 5. to reinforce advertising 6. to increase traffic in retail stores 7. to smooth out customer demand 8. to build up reseller inventories 9. to neutralize the competition's promotional efforts 10. to increase the attractiveness of shelf placement and displays

merchant middleman

a middleman that actually takes title to products by buying them

retailer

a middleman that buys from producers or other middlemen and sells to consumers

specialty-line wholesaler

a middleman that carries a select group of products within a single line

general-merchandise wholesaler

a middleman that deals in a wide variety of products

agent

a middleman that expedites exchanges, represents a buyer or a sell, and often is hired permanently on a commission basis - known as sales agents or manufacturer's agents - agent may represent one or several manufacturers

functional middleman

a middleman that helps in the transfer of ownership of products but does not take title to the products

full-service wholesaler

a middleman that performs the entire range of wholesaler functions

merchant wholesaler

a middleman that purchases goods in large quantities and sells them to other wholesalers or retailers and to institutional, farm, government, professional, or industrial users

wholesaler

a middleman that sells products to other firms

broker

a middleman that specializes in a particular commodity, represents either a buyer or a seller, and is likely to be hired on a temporary basis

limited-line wholesaler

a middleman that stocks only a few product lines but carries numerous product items within each line

advertising

a paid nonpersonal message communicated to a select audience through a mass medium

neighborhood shopping center

a planned shopping center consisting of several small convenience and specialty stores

regional shopping center

a planned shopping center containing large department stores, numerous specialty stores restaurants, movie theaters, and sometimes even hotels

community shopping center

a planned shopping center that includes one or two department stores and some specialty stores, along with convenience stores

warehouse showroom

a retail facility in a large, low-cost building with a large on-premises inventory and minimal service

department store

a retail store that 10 employs 25 or more persons and 2) sells at least home furnishings, appliances, family apparel, and household linens and dry goods, each in a different part of the store

technical salesperson

a salesperson who assists a company's current customers in technical matters

order taker

a salesperson who handles repeat sales in ways that maintain positive relationships with customers

order getter

a salesperson who is responsible for selling a firm's products to new customers and increasing sales to present customers

trade salesperson

a salesperson--generally employed by a food producer or processor-- who assists customers in promoting products, especially in retail stores

missionary salesperson

a salesperson--generally employed by a manufacturer--who visits retailers to persuade them to buy the manufacturer's products

planned shopping center

a self-contained retail facility constructed by independent owners and consisting of various stores

discount store

a self-service general-merchandise outlet that sells products at lower-than-usual prices

distribution channel (or marketing channel)

a sequence of marketing organizations that directs a product from the producer to the ultimate user

convenience store

a small food store that sells a limited variety of products but remains open well beyond normal business hours

off-price retailer

a store that buys manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts

traditional specialty store

a store that carries a narrow product mix with deep product lines

direct-response marketing

a type of marketing in which a retailer advertises a product and makes it available through mail, telephone, or online orders

catalog marketing

a type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet

nonstore retailing

a type of retailing whereby consumers purchase products without visiting a store

category killer

a very large specialty store that concentrates on a single product line and competes on the basis of low prices and product availability

order processing

activities involved in receiving and filling customers' purchase orders

advertising agency

an independent firm that plans, produces, an d places advertising for its clients

lifestyle shopping center

an open-air-environment shopping center with upscale chain specialty stores

promotion

communication about an organization and its products that is intended to inform, persuade, or remind target-market members

public relations

communication activities used to create an maintain favorable relationships between an organization and various public groups, both internal and external

integrated marketing communications

coordination of promotion efforts to ensure maximal informational and persuasive impact on customers

6 criteria used for selecting transportation modes

cost, speed, dependability, load flexibility, accessibility, frequency

sales support personnel

employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service

online retailing

retailing that makes products available to buyers through computer connections

personal selling

personal communication aimed at informing customers and persuading them to buy a firm's products

types of advertising by purpose

primary demand, selective demand, institutional

piggyback

railroads an trucks team up

ways of transportation

railroads, tucks, airplane,s waterways, pipelines

inside order takers

receive incoming mail, online, and telephone orders for business

materials handling

the actual physical handling of goods, in warehouses as well as during transportation - unit loading

holding costs

the expenses of storing products until they are purchased or shipped to customers

direct selling

the marketing of products to customers through face-to-face sales presentations at home or in the workplace

promotion mix (marketing-communications mix)

the particular combination of promotion methods a firm uses to reach a target market

telemarketing

the performance of marketing-related activities by telephone

inventory management

the process of managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stock-out costs

warehousing

the set of activities involved in receiving and storing goods and preparing them for reshipment

transportation

the shipment of products to customers

sales promotion

the use of activities or materials as direct inducements to customers or salespersons

intensive distribution

the use of all available outlets for a product - gives product the widest possible exposure in the marketplace

automatic vending

the use of machines to dispense products

selective distribution

the use of only a portion of the available outlets for a product in each geographic area

exclusive distribution

the use of only a single retail outlet for a product in a large geographic area - prestigious products

direct marketing

the use of the telephone, internet, and nonpersonal media to introduce products to customers, who then can purchase them via mail, telephone, or the internet

outside (or field) order taker

travel to customers