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