MKT 300- HAPKE Ch. 14

Technology

-Information technology has created almost seamless distribution processes -Information sharing has reduced costs -Increased speed, flexibility, and cooperation --Technology has improved service --Increasing number of innovative goods --Increased involvement of firms in management supply chain

Order Entry

Begins when customers place orders

Digital Distribution

Delivering content through the Internet to a computer or other devices

Order Delivery

Delivery is scheduled with a carrier

When only one outlet in a relatively large geographic area is used to distribute a product that is consumed over a long period of time, a(n) ___________ channel arrangement is developed. inclusive general Exclusive Selective Physical

Exclusive

An arrangement where a product forbids an intermediary to carry products made by competing manufacturers is called __. exclusive distribution. Exclusive dealing A tying agreement refusal to deal

Exclusive dealing

Transportation is the least expensive distribution function. True False

False

What is the most common type of market coverage for cigarettes? Intensive General Exclusive Selective

Intensive

Distribution

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

Marketing Intermediaries

Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangement or through the purchase and reselling of products

The contracting of physical distribution tasks to third parties who do not have managerial authority within the marketing channel is known as _____. Outsourcing telecommuting exclusive dealing horizontal integration

Outsourcing

What type of utility is created in this case? An ATM machine is installed inside the premises of a shopping mall for the benefit of those customers who run out of cash while shopping there. Ownership utility Possession utility Form utility Place Utility

Place Utility

A food manufacturing company that manufactures processed foods is trying to increase sales of its products by making them available in all general and convenience stores rather than just in supermarkets and large department stores. What type of utility is the company trying to create in this case? Time utility Form utility Possession utility Place utility

Place utility

Order Handling

Product availability and customer creditworthiness is verified; order assembly occurs

Reorder point

Reorder point = (order lead time x usage rate) + safety stock 126

Stockouts

Shortages of products that can result in loss of customers

Which of the following products is most likely to be distributed through intensive distribution? Soft drinks Customized machine parts Luxury automobiles Sports equipment

Soft drinks

Public Warehouses

Storage space and related physical distribution facilities that can be leased by companies

Order Lead Time

The average time lapse between placing the order and receiving it

Safety Stock

The extra inventory a firm keeps

Reorder Point

The inventory level that signals the need to place a new order

Strategic Channel Alliance

The products of one organization are distributed through the marketing channels of another

Usage Rate

The rate at which inventory is used/sold

Dual Distribution

The use of two or more marketing channels to distribute the same product to the same target market

Selective Distribution

Uses only some available outlets to distribute a product For shopping products Desirable when a special effort is important to customers

Exclusive

Uses single outlet in a fairly large geographic area For products purchased infrequently, consumed over a long period of time, or requiring service and information Only authorized dealers are used

Under which of the following circumstances do courts rule tying agreements as illegal? When an intermediary is free to carry competing products as well When a company has just entered the market When a supplier tries to move weaker products along with more popular items When a company is the only supplier of a particular product in the market

When a supplier tries to move weaker products along with more popular items

Electronic Data Interchange (EDI

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

Marketing Channel (channel of Distribution, Distribution channel)

a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain

Exclusive Dealing

a manufacturer forbids an intermediary to carry products of competing manufacturers

Supply-Chain Management

a set of approaches used to integrate the functions of operations management, logistics management, supply management and marketing channel management so products are produced and distributed in the right quantities, the right locations and at the right time o The goal is to achieve optimal levels of efficient and service o The supply chain includes all entities that facilitate product distribution and benefit from cooperative efforts

Vertical Marketing Systems

a single channel member coordinates or manages channel activities to achieve low-cost distribution aimed at satisfying target market customers

2. An agreement in which the products of one organization are distributed through the marketing channel of another organization is called ___ a strategic channel alliance. channel conflict. marketing intermediation. dual distribution.

a strategic channel alliance.

Tying Agreement

a supplier furnishes a product to a channel member with the stipulation that the channel member purchases other products

Product Attributes

a. Complex/Expensive or standardized? b. Durable or Fragile?

1. Customer Characteristics

a. Customer Market or business market? b. Business customers often prefer to deal directly with producers; are more likely to buy complex products and in large quantities

Environmental Forces

a. Economic considerations will force organizations to make compromises b. Technology may help a firm modify/improve its channel strategy c. Government regulations and trade agreements can affect channel strategy

Degree of Competition

a. High or Low? b. Highly competitive markets require companies to keep costs and prices low

Characteristics of intermediaries

a. If an intermediary is not adequately promoting an organization's products, it may reconsider channel choices

Type of Organization

a. Large or small? b. Large firms are often in a better position to have more distribution centers, which reduce delivery times c. Smaller firms may be in a better position to serve smaller-scale regional needs

Competitive Priorities

a. Supply chains can provide a competitive advantage for many marketers b. Supply chain decisions cut across all functional areas of a business c. An effective and efficient supply chain can sustain a business in a variety of competitive environments

Which of the following have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently? a. Third-party logistics firms b. Freight forwarders c. Megacarriers d. Channel captains e. Corporate VMS

a. Third-party logistics firms

In any one large metropolitan area, there is usually just one Ferrari luxury sports car dealer. This best illustrates _______. a. exclusive distribution b. multichannel distribution c. intensive distribution d. digital distribution e. selective distribution

a. exclusive distribution

The use of a variety of marketing channels to ensure maximum distribution is best called _______. a. multichannel distribution b. channel integration c. supply chain alliances d. logistics e. digital distribution

a. multichannel distribution

Physical distribution (Logistics):

activities used to move products from producers to consumers and other end users

Supply Chain

all the activities associated with the flow and transformation of product from raw materials through to the end consumer

Channel F Industrial Distributor

an independent business that takes title to products and carries inventories -Usually sells standardized items: although some carry a wide variety of items -Cost effective when a product has broad market appeal, is easily stocked and serviced, is sold in small quantities and is needed on demand

Channel G, Manufacturer's Agent

an independent businessperson who sells complementary products and is compensated by commissions -Does not acquire title or take possession:

Just-in-Time (JIT):

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

2. Most marketing channels have marketing intermediaries. A marketing intermediary's role is to a) link wholesalers to other wholesalers. b) link producers to other middlemen or to consumers. c) always sell products to wholesalers. d) not take title to products. e) always sell products to retailers.

b) link producers to other middlemen or to consumers.

Which of the following involves the processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information? a. Channel management b. Procurement c. Operations management d. Logistics management e. Supply chain management

b. Procurement

When you buy a new backpack from LLBean.com, which of the following consumer marketing channels are you using? a. Producer to wholesaler to retailer to consumer b. Producer to consumer c. Producer to agent to wholesaler to retailer to consumer d. Producer to industrial distribution to consumer e. Producer to retailer to consumer

b. Producer to consumer

Supply chain management should begin with a focus on _______. a. the government regulator b. the customer c. the marketing channel d. the seller e. the producer

b. the customer

3. Which of the following supply chain activities refers to the total set of managerial activities used by an organization to transform resource inputs into products, services, or both? a) Channel management b) Logistics management c) Operations management d) Supply management e) Marketing management

c) Operations management

Which of the following is often favored by intermediaries? a. Exclusive dealing b. Full-line forcing c. Restricted sales territories d. Tying agreements e. Refusal to deal

c. Restricted sales territories

Which of the following levels of market coverage is desirable when a special effort, such as customer service from a channel member, is important to customers? a. Digital distribution b. Multichannel distribution c. Selective distribution d. Intensive distribution e. Exclusive distribution

c. Selective distribution

When a producer, wholesaler, or retailer has the ability to influence another channel member's goal achievement, it _______. a. is multichannel distribution b. is a channel captain c. has channel power d. is horizontally integrated e. is vertically integrated

c. has channel power

Sourcing

concerned with what material a firm needs and where materials come from

Recycling

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

Restricted Sales Territories

courts have conflicting opinions on restricting intermediaries to certain sales territories

Possession Utility

customers have access to the product to use now or store for future use

1. The supply chain includes a) producers, wholesalers, and retailers. b) suppliers, producers, intermediaries, and customers. c) suppliers and suppliers' suppliers. d) all entities that facilitate product distribution. e) buyers, seller, marketing intermediaries, and agents.

d) all entities that facilitate product distribution.

4. A(n) is an independent businessperson who does not take title to the goods, sells complementary products of several producers in assigned territories and is compensated through commissions. a) merchant wholesaler b) broker c) industrial distributor d) manufacturers' agent e) merchandiser

d) manufacturers' agent

Which of the following business marketing channels is most likely to be used? a. Producer to manufacturer's agent to customer b. Producer to industrial distributor to retailer to customer c. Producer to agent to industrial distributor to customer d. Producer to customer e. Producer to industrial distributor to customer

d. Producer to customer

Suppliers may use _______ to get rid of slow-moving inventory, while a franchiser may use them to maintain quality control and protect the franchiser's reputation a. Restricted sales territories b. Warehousing c. Refusal to deal d. Tying agreements e. Exclusive dealing

d. Tying agreements

Which of the following provides time utility by enabling firms to compensate for dissimilar production and consumption rates? a. Transportation b. Inventory management c. Materials handling d. Warehousing e. Order processing

d. Warehousing

If PetSmart began to acquire very successful local pet stores, this would be an example of _______. a. vertical integration b. digital integration c. channel power d. horizontal integration e. multichannel integration

d. horizontal integration

Hulu enables consumers to watch select TV shows whenever they want instead of when they are broadcast. This illustrates _______. a. technological utility b. possession utility c. form utility d. time utility e. place utility

d. time utility

Inventory Management

developing and maintaining adequate assortment of products to meet customers' needs

Which of the following levels of market coverage is most appropriate for products that have a high replacement rate, require almost no service, and are bought based on price cues? a. Physical distribution b. Selective distribution c. Exclusive distribution d. Digital distribution e. Intensive distribution

e. Intensive distribution

Dell Computer and Harley Davidson are well known for their use of the just-in time (JIT) approach. To which of the following physical distribution activities does the JIT approach belong? a. Materials handling b. Order processing c. Transportation d. Warehousing e. Inventory management

e. Inventory management

Which of the following integrates the functions of operations management, logistics management, procurement, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times? a. Channel integration b. Logistics c. Third-party logistics d. Multichannel distribution e. Supply chain management

e. Supply chain management

The most popular type of vertical marketing system is the _______. a. horizontal VMS b. administered VMS c. vertical VMS d. corporate VMS e. contractual VMS

e. contractual VMS

When a manufacturer forbids an intermediary to carry products of competing manufacturers, the arrangement is known as _____. full-line forcing strategic channel alliance dual distribution exclusive dealing

exclusive dealing

Form Utility

formed by assembling, preparing, or otherwise refining the product to suit customer needs

Megacarriers

freight transportation firms that provide several modes of shipment

Time utility

having products available when the customer wants them

Horizontal Channel Integration

i. Combines organizations at the same level of operation under one management ii. Creates economics of scale

Vertical Channel Integration

i. Combines two or more stages of the marketing channel under one management ii. Vertical Marketing Systems (VMSs): a single channel member coordinates or manages channel activities to achieve low-cost distribution aimed at satisfying target market customers

Channel Cooperation

i. Cooperation is vital if each channel member is to gain something from the others ii. Enables retailers, wholesalers, suppliers, and logistics providers to: 1. Speed up inventory replenishment 2. Improve customer service 3. Cut the costs of bringing products to customers

Self- Interest

i. Creates misunderstanding about role expectations of channel members

Channel Conflict

i. Self- Interest Creates misunderstanding about role expectations of channel members ii. Communication is poor between channel members iii. There is increased use of multiple channels has increased the chance for miscommunication and conflict

Channel E

illustrates the direct channel for business products, which is the most popular channel for business products.

Channel H

includes both a manufacturer's agent and an industrial distributor.

Procurement/Supply Management

involves the processes used to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information

Purchasing

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

Place utility

making products available in locations where customers wish to purchase them

A(n) _____ is an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions without acquiring title to the products. merchant wholesaler manufacturer's agent Industrial distributor Broker

manufacturer's agent

Intensive Market Coverage

o Uses all available outlets to distribute a product o For most convenience products o Multiple channels may be used

Effective supply chain management

o closely linked to a market orientation

Freight Forwarders

organizations that consolidate shipments from several firms into efficient lot sizes

Logistics Management

planning, implementing and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption

Refusal to Deal

producers have the right to choose channel members

Dual Distribution

runs the risk of being viewed as anti-competitive

Channel Power

the ability of one channel member to influence other channel members' goal achievements

Outsourcing

the contracting of physical distribution tasks to third parties; most distribution activities can be outsourced to firms with expertise in specific areas

Channel Captain (Channel Leader):

the dominant leader of a marketing channel or a supply chain; may be a producer, wholesaler, or retailer

Order Processing

the receipt and transmission of sales order information

Cycle Time

the time needed to complete a process

Intermodal Transportation

two or more transportation modes are used in combination