MKTG 350 - Test 4

Three types of specialty retailers

- Traditional - Category killers -

Problems that come with increased size of horizontal channel integration

- decreased flexibility - difficulties coordinating among members - need for additional marketing research and large-scale painting

Levels of market coverage

- intensive distribution - selective distribution - exclusive distribution

SCM key tasks

- operations management - logistics management - procurement - channel management

Variables that affect the intensity of market coverage

- replacement rate - product adjustment - duration of consumption - time required to find the product

Four utilities of the marketing channel

- time utility - place utility - possession utility - form utility

Characteristics of JIT

- usually there is not safety stock - requires a high level of coordination between producers and suppliers - eliminates waste - reduces inventory costs

Vertical marketing system (VMS)

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

Stockouts

A part of inventory management that involves a shortage of products

Supply chain

All the organizations and activities involved with the flow and transformation of products from raw materials through to the end consumer

JIT (Just-in-time)

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

Retailer

An organization that purchases products for the purpose of reselling them to ultimate consumers

Administered VMS

Channel members are independent, but informal coordination achieves a high level of inter-organizational management

Corporate VMS

Combines all stages of the marketing channel, from producers to consumers, under a single owner

Horizontal channel integration

Combining organizations at the same level of operation under one management

intensive distribution

Convenience products, such as Coca-Cola, Pringles, and Duracell batteries - available in many retail outlets

Multichannel retailing

Employing multiple distribution channels that complement their brick-and-mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews and make actual purchase.

wholesalers and retailers

Firms that are "downstream"

producers and suppliers

Firms that are "upstream" in the supply chain

longer channels with many intermediaries

Less-expensive standardized products with long shelf lives can go through

making products available at the right time at the right place in the right quantities

Major role of marketing channel is to

short channels

Marketers of complex and expensive products, perishable products, and fragile products that require special handling will likely employ

5.9%

Retailers contribute $1.1 trillion, or ____, directly to the US gross domestic product

Selective distribution

Shopping products, such as iPhone, televisions, smartwatches and shoes - available in some outlets

exclusive distribution

Specialty products, such as haute couture, Montblanc pens, BMWs, and Fendi handbags - available in very few outlets

1 million

There are more than ____ retail establishments in the US, and they employ nearly 16 million people

Creating utility & facilitating exchange efficiencies

What functions does the marketing channel provide

When one member of a marketing channel purchases the operations of another member or simply performs the functions of another member, eliminating the need for that intermediary

When does vertical channel integration occur?

against competition because of increased bargaining power and the ease of sharing information and responsibilities

When is vertical channel integration more effective and why?

EDI (electronic data interchange)

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

Marketing channels

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

Contractual VMS

channel members are linked by legal agreements spelling out each member's rights and obligations

Vertical channel integration

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

Recycling

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

channel management

directing the flow of products

Specialty retailers

emphasize narrow and deep assortments; they do not sell specialty items but instead offer substantial assortments in a few product lines

Form utility

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

Superstore

giant outlet offering all food and non-food products found in supermarkets, as well as most routinely purchased products (general-merchandise retailers)

Time utility

having products available when the consumer wants them

procurement

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

Warehouse club

large-scale, members-only establishments combining cash-and-carry wholesaling with discount retailing (general-merchandise retailers)

Place utility

making products available in locations where customers wish to purchase them

operations mangement

managing activities from production to final delivery through system-wide coordination

logistics management

planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants

Supermarket

self-service store offering complete line of food and non-food products and some non-food products (general-merchandise retailers)

Benefits of channel integration

stabilize supply, reduce costs, increase channel member coordination

Channel power

the ability of one channel member to influence another member's goal achievement

Purchasing

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

Supply chain management

the coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer.

Possession utility

the customer has access to the product to use or to store for future use

Channel captain

the dominant leader of a marketing channel or a supply channel (may be a producer, wholesaler, or retailer)

intensity of market coverage

the number and kinds of outlets in which a product will be sold

Sourcing

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

Significance of marketing channel

they generally entail long-term commitments among a variety of firms