MKTG EXAM 4 (CH 14,15,20,4)

Sample ethical issues

*Product issue product information* -covering up defects that could cause harm to a consumer; withholding critical performance information that could affect a purchase decision *Distribution issue Counterfeiting * -Counterfeit products widespread, esp in the areas of computer software, clothing and audio and video products *Promotion issue, advertising* -deceptive advertising or withholding important product information in a personal-selling situation *Pricing issue pricing* -Indicating that an advertised sale price is a reduction below the regular price when in fact thats not the case

Psychological pricing

-Bundle pricing -Multiple unit pricing -Prestige pricing -odd/even pricing -EDLP vs. High/low pricing

Horizontal channel integration

-Combines organizations at the same level of operation under one management -Creates economies of scale -Not the best method for improving distribution

vertical channel integration

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

strategic issues in marketing channels

-Competitive priorities -Channel integration -Channel leadership, coordination and conflict

inventory management

-Developing and maintaining adequate assortment of products -- Stockouts: Shortages of products --Reorder Point: Inventory level --Lead Time: Time between placing the order and receiving it --Usage Rate: The rate at which inventory is used/sold --Safety Stock: The extra inventory a firm keeps SKU: stock keeping unit -Just-in-Time (JIT)

Factors that influence the ethical decision making process

-Individual factors - Opportunity -Organization relationships

Implementing Ethical/Legal Compliance Programs

-It is important that companies enforce standards and impose penalties on those who violate codes of conduct -The company must take steps in response to violations of standards and revise the compliance program to diminish future opportunities for misconduct -Codifying ethical standards and implementing compliance programs and codes of conduct that incorporate both legal and ethical concerns is the best approach to preventing violations

Product ethical issues arise when

-Marketers fail to disclose risk associated with a product -fail to disclose info regarding the function, value or use of a product -fail to inform customers about existing conditions or changes in product quality

Marketing channel activities performed by intermediaries

-Marketing information -marketing management -facilitating exchanges -promotion -price -physical distribution

Pricing methods

-Markup-Brand Pricing -Demand-based pricing -Cost-plus Pricing -Cost-based pricing -Competition-based pricing

Differential pricing

-Negotiated Pricing -Secondary-market pricing -Periodic discounting -Random discounting

Key tasks in supply chain management

-Operations management -Supply management -Logistics management -Channel management

Pricing's common ethical issues are:

-Price fixing -Predatory pricing -Failure to disclose the full price of a purchase -examples Price gouging: pricing products at exorbitant levels Bait and switch Quantity surcharges

New product pricing

-Price skimming -Charging highest possible price to recover investment -Penetration pricing -Set prices below competition to gain share early

warehousing and transportation

-Warehousing is the design and operation of facilities for moving and storing goods. -Transportation is the actual movement of products.

opportunity

-conditions that limit barriers to provide rewards - an employee that acts unethically and is rewarded or suffers no penalty may repeat acts

Social Responsibility issues: Natural environment

-consumers insisting not only on a good quality of life but on a healthful environment so they can maintain a high standard of living during their lifetimes --Major social concerns ---Conservation ---water pollution ---air pollution ---Land pollution

Selecting Marketing Channels

-customer characteristics -Product attributes -Type of organization -competition -Marketing environmental forces -characteristics of intermediaries

Ethics vs social responsibility

-ethics: relates to individual and group decisions, judgements about right and wrong, in a particular decision-making situation -Social responsibility: relates to the total effect of marketing decisions on society

Promotion can create ethical issues in a variety of ways

-false or misleading advertising -manipulative or deceptive sales promotions, tactics and publicity --greenwashing happens when products are promoted as being environmentally friendly -bribery occurs when ann incentive is offered in exchange for an illicit advantage

Location

-location of firm's target market -kinds of products being sold -availability of public transportation -Customer characteristics -competitors' locations LEASE FLEXIBLE

ethics and supply chain

-managing supply chain responsibly is one of the greatest difficulties of marketing ethics -Good supply chain ethics important because ensures the integrity of the product and the firm's operations in serving customers

TAZA (chocolates) -mexican chocolate -course texture -whole sale products

-markets through wholesalers, U.S Retailers and Distributors -can buy online -somerville Massachusetts -attempt to make personal connections with all certified organic growers -Dealing directly help meed social responsibility goals while ensuring quality -chocolate bar at 4.50 carries wholesale price of 2.70 distributor price 2.00 -have to sell whole sale -work directly with retailers -2 price channels : distributor pricing, full retail price -distribution is critical to their type of product -whole sale is their bread and butter, move in volume -direct trade : emphasize quality, better for company of their size -shelf life 6-12 months (overmanufacture) Quarter 4 hectic -tours at its Somerville site, charging a small entrance fee that includes a donation to Sustainable Harvest International -holidays like Halloween and Valentine's Day, Taza hosts special tastings and limited-edition treats to attract customers to its factory store. -marketing communications focus mainly on Facebook, Twitter, blogs, e-mail, and specialty food shows -ship to euro countries

economic responsibility

-most basic level, all companies have an economic responsibility to be profitable so they can --provide a return on investment to their owners and investors --create jobs for the community --contribute goods and services to the economy -require finding balance in stakeholder interests while recognizing a firm must make a profit to be sustainable

Case study: Procter and Gamble tunes up channel and transportation

-portfolio includes 25 brands that bring in more than $1 billion each every year, plus another 15 that bring in at least $500 million every year. -rings up $84 billion in sales through traditional stores and online retailers -company uses intensive distribution market coverage -supermarkets, drug stores, convenience stores, discount stores, and warehouse clubs -branded items compete for shelf space not only with other manufacturers' brands, but also with store brands (shelf space valuable) -new Internet and mobile channels QR codes -toronto experiment teamed walmart canada to make 50 virtual stores in buses -teamed with amazon -Efficiency vital

goals of physical distribution

-right goods -right place -right price -right time -right quantity -right support system -cycle time

Courtney Reagan: Correspondent and general assignment reporter CNBC James wright senior partner lippicon (brick is the new black)

-sales staff think bout transactions instead of relationships - have to find ways to group people, but make people feel like something was made for them -People are KEY -have what the customer wants attracts them -how do you bring old school people to the new technology --not going to have a choice HOW TO MAKE IN STORE SHOPPING MORE PLEASANT -retailer offer sensory experience, and sales staff -consumer has choice, when they dont get that choice they move on -Protecting privacy, will have confidence if they trust brand -used to be location location location - 2 important things: segmentation, what experience are you trying to drive

Pricing at the farmers' market (Urban Farmz)

-selling directly to public allows farmers to build relationships with local shoppers, and encourage repeat buying -allows farmers to realize larger profit margin -consumers willing to pay more for top quality local products -competition between farmers' markets is another issue

Long channel most efficient distribution when

-several channel intermediaries performed specialized functions, cost may be lower when one channel member tries to perform them all -firms that specialize in certain elements of producing a product or moving it through the channel are more effective and efficient at performing specialized tasks -results in cost efficiencies and added value to customers

Urban Farmz Video

-soap makers - go to site not going to go to another place for shipping -word of mouth free marketing at its best -diversifying by selling certified organic soap at stand online, and to wholesale accounts with "juice up the brand" -Producers sell it for $14 per bar on own website ask Urban farmz to avoid any conflict by selling it at higher price (15.95) Lavender-lemon verbena scent -caleb thinks visitors will not click away to save a dollar or two by buying elsewhere since they would have to pay the others site's shipping fee

Dicks sporting goods scores with stores within stores

-store in store -exclusive nike/ under armour north face stores -teams up with NHL testing sale of league and team gear 82 gold galaxy stores (golf simulators, gear, lessions) --offers trade ins custom fitting, equipment repair -true runner stores (gait and arch) -field and stream -store retailing #1 focus

Pricing Objectives and actions

-survival -profit -return on investment -market share -cash flow -status quo -product quality

L.L Bean

1 product firm selling by mail -3 important thing 1. test product 2. honest advertising 3. keep customer satisfied at any cost -improving customer list -mailing catalog of 300, today have website -nancy fischman vp corporate marketing -terry sutton e commerce -greg elder vp of retail stores -company flagships retail store open 24/7, even on holidays -2 areas growing: banners (online), television campaigns -create 50 different catalogs -large catalog cost one of biggest challenges -free demonstrations (tourist attraction) -want some sort of touch point -growing online popularity (passed phone and mail) -dedication to customer satisfactions

Stages for Establishing Prices

1)development of pricing objectives 2)assessment of target market's evaluation of price 3)evaluation of competitors' prices 4) selection of a basis for pricing 5)selection of a pricing strategy 6)determination of a specific price

Selection of a basis for pricing

3 major dimensions on which prices can be based are cost, demand, and competition -an organization usually considers multiple dimensions --type of product, market structure of the industry, brand's market share position relative to competing brands, customers characteristics

Guest speaker:*James Curleigh* (LEVI 501) The 160 year old startup (brick is the new black)

3 types of fans -fans that love us and never leave us -loves us but left us -doesnt know who levi is but love us forever when introduced (getting here isnt easy) CORE and MORE? -focus on core and do more SIMPLICITY and SOPHISTICATION -be both ICONS and INNOVATION (icons dont remain icon unless you cont. to innovate) ACCESSIBLE and ASPIRATIONAL EXPECTED AND UNEXPECTED

Proportional Cost of Each Physical Distribution Function as a % of Total Distribution Cost

6% customer service/order entry 3% administration 45% transportation 22% warehousing 24% inventory carrying

Electronic data interchange (EDI)

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

television home shopping

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

Marketing channel

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

general-merchandise retailer

A retail establishment that offers a variety of product lines that are stocked in considerable depth

category management

A retail strategy of managing groups of similar, often substitutable, products produced by different manufacturers -move toward a collaborative supply-chain initiative which enhances customer value -key to creating maximum success for all parties in the supply chain is cooperative interaction between manufacturer and retailer

organizational (corporate) culture

A set of values, beliefs, goals, norms, and rituals that members of an organization share

exclusive dealing

A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers

convenience store

A small self-service store that is open long hours and carries a narrow assortment of products, usually convenience items

direct-response marketing

A type of marketing in which a retailer advertises a product and makes it available through mail or telephone 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 -advantages: includes efficiency and convenience for customers and lower costs of retailers

power shopping center

A type of shopping center that combines off-price stores with category killers -bypasses the traditional department store anchor and instead anchors with store

lifestyle shopping center

A type of shopping center that is typically open air and features upscale specialty, dining, and entertainment stores Often located near affluent neighborhoods and may encourage "casual browsing" -Architechtural design is important in creating a sense of place

neighborhood shopping center

A type of shopping center usually consisting of several small convenience and specialty stores

Community shopping center

A type of shopping center with one or two department stores, some specialty stores, and convenience stores

regional shopping center

A type of shopping center with the largest department stores, widest product mixes, and deepest product lines of all shopping centers

superregional shopping center

A type of shopping center with the widest and deepest product mixes that attracts customers from many miles away

category killer

A very large specialty store that concentrates on a major product category and competes on the basis of low prices and product availability

Social Responsibility issues: Consumerism

Activities undertaken by independent individuals, groups and organizations to protect their rights to consumers -Major social concerns --The right to safety --The right to be informed --The right to choose --The right to be heard Ralph nader

physical distribution

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

cost-based pricing

Adding a dollar amount or percentage to the cost of the product

cost-plus pricing

Adding a specified dollar amount or percentage to the seller's cost

markup pricing

Adding to the cost of the product a predetermined percentage of that cost

Survival

Adjust price levels so the firm can increase sales volume to match organizational expenses

special-event pricing

Advertised sales or price cutting linked to a holiday, a season, or an event

The importance of price to marketers

Affects demand Affects profits -Profit = Total Revenue - Total Costs -Revenue = Price x Quantity Sold Has a psychological dimension Has important legal implications

Mattel Recall

After recalling unsafe products and losing millions in profits in 2007, Mattel rebounded -Improved ethics and social responsibility initiatives -Has been named to numerous "most ethical" lists -Consumer demand and trust returned

commission merchants

Agents that receive goods on consignment from local sellers and negotiate sales in large, central markets

Logistics management

All activities designed to move the product through the marketing channels to the end user, including warehousing and inventory 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

Channel management

All activities related to selling, service, and development of long-term customer relationships

supply chain

All the activities associated with the flow and transformation of products from raw materials through to the end customer

Retailing

All transactions where the buyer is the ultimate consumer and purchases for personal, family, or household purposes -clear expectation that consumers will increasingly buy their goods online

Highest price?

Although many expect that Whole Foods would be the most expensive, it is actually the Heinz product that commands the highest premium. What is interesting about this is that Hunts is actually the brand that specializes in tomato products (canned - diced, whole, stewed, sauce, etc.). Heinz has ketchup, Classico tomato sauce (so not marketed under the Heinz name), and a host of relishes, frozen entrees (WW, TGIF, Ore-Ida) and global brands. Which, the family of Heinz brands brings us to the concept of brand naming and brand positioning. For example - do you think Heinz would have done as well with Heinz Low-Cal Meals, as it did with a brand called WW Smart Ones? Probably not. Along those same lines, let's take a look at a mid-priced car manufacturer looking to break into the Luxury Car Market.

tying agreement

An agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well

strategic channel alliance

An agreement whereby the products of one organization are distributed through the marketing channels of another

franchising

An arrangement in which a supplier (franchisor) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration -advantages for franchisee: able to start business with limited capita while receiving guidance, franchises are more successful and have a lower failure rate -Advantages for the FRANCHISER: gains product distribution without the high cost of operating its own outlets, the highly motivated to succeed, success of the franchise mean higher income for the franchiser -Disadvantages for the FRANCHISEE: can dictate many aspects of the business and collects a percentage of the sales, must work very hard -Disadvantages for the FRANCHISER: gives up a certain amount of control when entering into a franchise agreement, individual establishments may not be operated exactly to the franchiser's standards

ethical issue

An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical

Ethical issue

An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical -Ethical issues can become a problem in all elements of the marketing mix -Marketers must be able to recognize problems and solve them

Industrial distributor

An independent business organization that takes title to industrial products and carries inventories -cost effective when product has broad market appeal, easily stocked and serviced , sold in small quantities

wholesaler

An individual or organization that sells products that are bought for resale, for making other products, or for general business operations classified by several criteria: --whether independently owned or owned by a producer --whether or not they take title (own) the products --The range of services they provide --The breadth and depth of their product lines

Just-in-time (JIT)

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 -major role in creating time,place, possession utility, and sometime form utility -most personal income spent in retail stores -add value for customers by providing services and assisting in making product selections -retail brick-and-motar stores are being challenged by direct marketing channels such as catalogs, television and the internet

Social responsibility

An organization's obligation to maximize its positive impact and minimize its negative impact on society

Social Responsibility

An organization's obligation to maximize its positive impact and minimize its negative impact on society -Greater consumer trust and loyalty -Positive publicity Indirect long-term benefits -promotes goodwill --attracts potential customers and employees --generates indirect long term benefits such as greater employee commitment and improved business performance

Product line pricing

Captive pricing Premium pricing Price lining Bait pricing -Price an item low, hoping customer will buy a higher priced product -Bait and switch is illegal when firm --Does not intend to sell "bait" --Discourages purchase of bait --Employee compensation discourages selling "bait" --Refuses to take orders or deliver in a reasonable time --Fails to specify limited availability or time

Corporate philanthropy

Cause-Related Marketing: The practice of linking products to a particular social cause on an ongoing or short-term basis

channel leadership

Channel Captain (Channel Leader) -The dominant leader of a marketing channel or a supply chain -May be a producer, wholesaler, or retailer Channel Power -The ability of one channel member to influence other channel members' goal achievements

Channel Conflicts

Channel conflict causes: -Self-interest of members -Poor communication -Increased use of multiple channels

The significance of marketing channels

Channel decisions determine: A product's market presence Buyer's accessibility to the product Entail long-term commitments among a variety of firms Difficult to change/undo marketing channel decisions

Differential Pricing Techniques

Charging different prices to different buyers -Secondary-market --One price for primary target market and different price for another -Negotiated --Final price established through buyer/seller bargaining -Periodic and Random discounting

differential pricing

Charging different prices to different buyers for the same quality and quantity of product

price skimming

Charging the highest possible price that buyers who most desire the product will pay

Improving Ethical conduct

Codes of Conduct (Codes of Ethics) -Formalized rules and standards that describe the organization's employee expectations Ethics Officers -Are usually responsible for creating and distributing the code of conduct, enforcing the code and meeting with organizational members to discuss or provide advice about ethical issues

Direct Marketing

Communicating via media with end consumers who can then purchase products through that media. -Catalogs, direct response, telemarketing, TV home shopping, online retailing,

Private warehouses

Company-operated facilities for storing and shipping products

Price and Non Price Factors

Conjoint Analysis -Market research technique where consumers make tradeoffs between features and benefits and price

Cost based pricing

Cost-plus Pricing -Adding a specified dollar amount to the seller's costs Markup -Adding to the cost of the product a predetermined percentage of that cost Markup / cost Markup / price Example: Product costs $50, retailer prices it at $100 -What is % markup based on cost? -What is % markup based on price?

Marketing Citizenship Affects Stakeholder Groups

Customers -Positive product evaluation -customer loyalty -Positive word-of-mouth -long-term relationships -enhanced corporate reputation Marketing channel members -Long-term partnerships -Trusting relationships -Enhanced efficiency in communications Employees -Improved self-concept -Increased commitment and motivation -Reduced absenteeism and turnover -Trust in co-worker relationships -Enhanced efficiency in communication

Demand-Based Pricing

Customers pay a higher price when demand is strong and a lower price when demand is weak

inventory management

Developing and maintaining adequate assortments of products to meet customers' needs

Legal Issues in Channel Management

Dual Distribution Restricted Sales Territories Exclusive dealing Tying Agreements Refusal to deal

channel cooperation

Enables retailers, wholesalers, suppliers and logistics providers to: -Speed up inventory replenishment -Improve customer service -Cut the costs of bringing products to customers

odd-even pricing

Ending the price with certain numbers to influence buyers' perceptions of the price or product

negotiated pricing

Establishing a final price through bargaining between seller and customer

product-line pricing

Establishing and adjusting prices of multiple products within a product line

Social Responsibility and Ethics Improve Marketing Performance

Ethics: Individual and group decision Social responsibility: The total effect of marketing decisions on social Evidence shows there are long-term financial benefits to being ethical and socially responsible

professional pricing

Fees set by people with great skill or experience in a particular field

codes of conduct

Formalized rules and standards that describe what the company expects of its employees -must be periodically revised -these codes should provide guidelines instead of being so detailed as to take every situation into account

Megacarriers

Freight transportation firms that provide several modes of shipment

limited-line wholesalers

Full-service wholesalers that carry only a few product lines but many products within those lines

general-merchandise wholesalers

Full-service wholesalers with a wide product mix but limited depth within product lines -cash-and-carry -truck-drop shipper -mail order

superstores

Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products

pricing objectives

Goals that describe what a firm wants to achieve through pricing

Development of Pricing Objectives

Goals that describe what a firm wants to achieve through pricing -should be consistent with organizational and marketing objectives -Can be short-or long-term and marketers can employ multiple pricing objectives.

Least Expensive

Great Value. Discuss why that is the perception. What does it communicate about quality, taste, appearance? Lowest price is not necessarily a bad thing, i.e., great value. Can be a significant share play.

Profit

Identify price and cost levels that allow the firm to maximize profit

Return on investment

Identify price levels that enable the firm to yield targeted ROI

Status quo

Identify price levels that help stabilize demand and sales

retail positioning

Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment -many discount and specialty store chains have positions themselves to appeal to time and cash-strapped consumers with convenient locations and layouts as well as low prices

Assessment of the Target Market's Evaluation of Price

Importance of price depends on: -Type of product -Type of target market -Purchase situation Value focus

Assessment of the target market's evaluation of price

Importance of price depends on: -type of product -type of target market -purchase situation Value combines a product;s price and quality attributes -Customers use value to differentiate between competing brands

supply management

In its broadest form, refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition

manufacturers' agents

Independent intermediaries that represent two or more sellers and usually offer customers complete product lines -does not acquire title or take possession

merchant wholesalers

Independently owned businesses that take title to goods, assume ownership risks, and buy and resell products to other wholesalers, business customers, or retailers -go by various names, including wholesaler, jobber, distributor, assembler, exporter and importer -Useful for: providing market coverage, making sales contacts, furnishing customer support, handling orders, collecting market information, storing inventory

Supply-Chain Management

Integrating 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 -To achieve optimal levels of efficiency and service -Includes all entities that facilitate product distribution and benefit from cooperative efforts

Intensity of market coverage

Intensive -convenience product such as coke, pringles, and duracell batteries (Available in many retail outlets) Selective -Shopping products such as iPods, televisions, DVD players, and shoes (available in some outlets) Exclusive -Specialty products such as haute couture, mont blanc pens, BMWs, and fendi handbags (available in very few outlets)

brokers

Intermediaries that bring buyers and sellers together temporarily

selling agents

Intermediaries that market a whole product line or a manufacturer's entire output

agents

Intermediaries that represent either buyers or sellers on a permanent basis

guest speaker (Bill S. Simon) Former president and CEO Walmart US (brick is the new black)

Issues at play: 1) ecommerce isnt new secret of tech: use tech to allow great customer service Catelog expanded (digital and broader- website) lacks immediency, censory -INNOVATION IS Critical 2) Customers expectations have changed --same tools online and in physical retail --data and online retail will continue to change (availability of data and technical sophistication) --take care of customers with merchandise and service you'll win the day -"use technology to deliver great products, at great prices for great customer service"

Improving marketing ethics

It is possible to improve ethical conduct by: -hiring ethical employees -eliminating unethical employees greatest decrease in ethical risk for an organization involve -well-implemented ethics program -a strong corporate culture

department stores

Large retail organizations characterized by a wide product mix and organized into separate departments to facilitate marketing efforts and internal management

distribution centers

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

supermarkets

Large, self-service stores that carry a complete line of food products, along with some nonfood products

warehouse clubs

Large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing

mail-order wholesalers

Limited-service wholesalers that sell products through catalogs

drop shippers

Limited-service wholesalers that take title to goods and negotiate sales but never actually take possession of products

truck wholesalers

Limited-service wholesalers that transport products directly to customers for inspection and selection

cash-and-carry wholesalers

Limited-service wholesalers whose customers pay cash and furnish transportation

sales branches

Manufacturer-owned intermediaries that sell products and provide support services to the manufacturer's sales force

sales offices

Manufacturer-owned operations that provide services normally associated with agents -set up to reach customers more effectively by performing wholesaling functions themselves

Non-Price Factors Affecting Demand

Market -Degree of competition -Competitor action/reaction -General economic conditions Product -Quality -Range -Nature- essential/luxury -Substitutes Support -Service at point of sale and after -Advertising/promotion -Distribution Methods

Legal responsibility

Marketers are expected to follow all laws and regulations designed to keep I.S. companies' actions within the range of acceptable conduct and fair competition

Marketing Channels in Supply Chains

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 -Manufacturers, wholesalers, retailers, etc. Marketing Intermediaries -Middlemen (channel members) that link producers to other intermediaries or ultimate consumers through contractual arrangement or through the purchase and reselling of products

direct selling

Marketing products to ultimate consumers through face-to-face sales presentations at home or in the workplace -Advantages are the ability to personally demonstrate the product, customer attention and convenience -most expensive form of retailing and some customers view it negatively

Virtual Guest Speakers (Brick is the new black) *Baljit S. Dai*l- Chairman of the Board of CEO JDA Software

Meet your new boss: -Connected and empowered -Socially connected -Own their shopping experience Customer is in charge -challenge for retailer: how to fulfill order in most profitable way -dynamic decision making need connect distribution order management , intelligent fulfillment capabilities smarter stores (vital element- center of shopping experience) -Inventory visibility -intelligent fulfilment -labor productivity 78% consumers still want to shop in store (spend 6x more than shopping online) -95% retail sales in store Retail is NOT dead Making brick-and-mortar the star -Customer centric assortments -Intelligent fulfillment -More productive stores -Profitable DOM

full-service wholesalers

Merchant wholesalers that perform the widest range of wholesaling -handle either consumer or business products and provide various marketing services to their customers -general merchandise -limited line -specialty line

Freight forwarders

Organizations that consolidate shipments from several firms into efficient lot sizes

bundle pricing

Packaging together two or more complementary products and selling them at a single price

multiple-unit pricing

Packaging together two or more identical products and selling them at a single price

The Pyramid of Corporate Social Responsibility

Philanthropic -Be a good corporate citizen --contribute resources to the community improve quality of life Ethical -be ethical --obligation to do what is right just and fair --avoid harm Legal -obey the law --law is society's codification of right and wrong --Play by the rules of the game Economic -Be profitable -the foundation upon which all others rest

Materials Handling

Physical handling of tangible goods, supplies, and resources

reference pricing

Pricing a product at a moderate level and displaying it next to a more expensive model or brand

bait pricing

Pricing an item in a product line low with the intention of selling a higher-priced item in the line

demand-based pricing

Pricing based on the level of demand for the product

competition-based pricing

Pricing influenced primarily by competitors' prices

Competition-Based Pricing

Pricing influenced primarily by competitors' prices When: -Competing products are homogeneous -Price is a key consideration to market

customary pricing

Pricing on the basis of tradition

everyday low prices (EDLP)

Pricing products low on a consistent basis

psychological pricing

Pricing that attempts to influence a customer's perception of price to make a product's price more attractive

captive pricing

Pricing the basic product in a product line low, while pricing related items higher

premium pricing

Pricing the highest-quality or most versatile products higher than other models in the product line

Marketing ethics

Principles and standards that define acceptable conduct in marketing as determined by various stakeholders including: the public, government regulators, private-interest groups, consumers, industry, the organization itself -Ethics Vs. Laws *Ethical Issue*: An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong

marketing ethics

Principles and standards that define acceptable marketing conduct as determined by various stakeholders When marketing activities deviate from accepted standards: -exchange process can break down -resulting in customer dissatisfaction -lack of trust and lawsuits Trust is important concern as it is foundation of long-term relationships -lack of trust increased in recent years -once trust is lost, can take lifetime to rebuild

Ethical issues in marketing

Product -falling to disclose risks associate with a product -falling to disclose information about a product's function, value, or use -falling to disclose information about changes in the nature, quality, or size of a product Distribution -falling to live up to the rights and responsibilities associated with specific intermediary roles -manipulating product availability -using coercion to force other intermediaries to behave in a certain way Promotion -false or misleading advertising -using manipulative or deceptive sales promotion, tactics, and publicity -offering or accepting bribes in personal selling situation Pricing -Price fixing -predatory -falling to disclose the full price of a purchase Product/promotion issue: Misleading product claims Product issue: Digital privacy, esp. Location

price leaders

Products priced near or even below cost

Professional and Promotional Pricing

Promotional Pricing -Price/loss leaders -Special event pricing -Comparison discounting Professional pricing

Evaluation of Competitors' Prices

Regular function of marketing research Customer's view of pricing and marketing mix variables -Pricing above competition creates an exclusive image -Pricing below competition gains market share

warehouse showrooms

Retail facilities in large, low-cost buildings with large on-premises inventories and minimal services

online retailing

Retailing that makes products available to buyers through computer connections

Cash Flow

Set price levels to encourage rapid sales

Product quality

Set prices to recover research and development expenditures and establish a high-quality image

price lining

Setting a limited number of prices for selected groups or lines of merchandise

comparison discounting

Setting a price at a specific level and comparing it with a higher price

secondary-market pricing

Setting one price for the primary target market and a different price for another market

prestige pricing

Setting prices at an artificially high level to convey prestige or a quality image

penetration pricing

Setting prices below those of competing brands to penetrate a market and gain a significant market share quickly

Social Responsibility issues: Community Relations

Society eager to have marketers contribute to its well-being, wishing to know what marketers do to help solve social problems -Major social concerns --Equality issues --Disadvantaged members of society --Safety and health -- Education and general welfare Marketers can improve a community's quality of life through -Employment opportunities -economic development -financial contributions to educational, health, cultural and recreational causes

public warehouses

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

off-price retailers

Stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts -keep prices lo by offering few services and sustaining high inventory turnover -ensure a regular flow of merchandise by establishing long-term relationships with suppliers that provide large quantities of goods at reduce prices

traditional specialty retailers (limited-line retailers, single-line retailers)

Stores that carry a narrow product mix with deep product lines -products commonly: apparel, jewelry, sporting goods --usually offer more selections and more sale expertise

hypermarkets

Stores that combine supermarket and discount store shopping in one location

Corporate Philanthropy

Strategic Philanthropy -The synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits -(giving $ and time)

Key supply chain management issues

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 Effective supply-chain management is closely linked to a market orientation

periodic discounting

Temporary reduction of prices on a patterned or systematic basis

random discounting

Temporary reduction of prices on an unsystematic basis

channel power

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

marketing citizenship

The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders -Stakeholder orientation: Understanding and addressing the needs of all stakeholders, including communities and special interest groups

warehousing

The design and operation of facilities for storing and moving goods -creates time utility -helps stabilize prices and the availability of seasonal items -correct warehouse can reduce transportation and inventory cost and improve customer service

Channel captain

The dominant leader of a marketing channel or a supply channel

transportation

The movement of products from where they are made to intermediaries and end users -most effective physical distribution function

telemarketing

The performance of marketing-related activities by telephone

atmospherics

The physical elements in a store's design that appeal to consumers' emotions and encourage buying -helps to create an image and position a retailer -retailers can use different elements -music, color, complecity

Materials handling

The physical handling of tangible goods, supplies and resources -Radio Frequency ID: Radio waves are used to track materials using scanners -Used in manufacturing, retailing, and in between

sustainability

The potential for the long-term well-being of the natural environment, including all biological entities, as well as the interaction among nature and individuals, organizations, and business strategies -some believe companies should work toward implementing the following goals: eliminate the concept of waste, reinvent the concept of a product, make prices reflect the cost, make environmentalism profitable

cause-related marketing

The practice of linking products to a particular social cause on an ongoing or short-term basis

order processing

The receipt and transmission of sales order information

nonstore retailing

The selling of products outside the confines of a retail facility

strategic philanthropy

The synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits

cycle time

The time needed to complete a process

operations management

The total set of managerial activities used by an organization to transform resource inputs into products, services, or both

automatic vending

The use of machines to dispense products -advantages are partly offset by the high costs of equipment and frequent servicing and repairs

direct marketing

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

Dual distribution

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

dual distribution

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

Price

The value paid for a product in a marketing exchange. -Does not always take the form of money. -The oldest form of trade is barter.

Marketing channels create utility

Time utility: when Place utility: where Possession utility: How (access now vs. later Form utility: How (in what combination)

wholesaling

Transactions in which products are bought for resale, for making other products, or for general business operations

Wholesaling

Transactions where products are purchased for resale, making other products, or general business operations

Intermodal transportation

Two or more transportation modes used in combination -piggyback (truck/rail) -fishyback (truck/water) -birdyback (truck/air)

exclusive distribution

Using a single outlet in a fairly large geographic area to distribute a product -only authorized dealers are used - for products purchased infrequently, consumed over a long period of time, or requiring service and information

Intensive distribution

Using all available outlets to distribute a product -for most convenience products -multiple channels may be used

selective distribution

Using only some available outlets in an area to distribute a product -for shopping products -desirable when a special effort it important to customers

TOMS one for one

Vision -Toms eyewear

Individual Factors

What are the top personal factors that would cause someone to make a bad decision -Alcohol, peer pressure, stress/personal situation -Mob mentality, pride, greed People learn values and principles through -socialization by family members -social groups -religion -formal education -Organizations culture often has more influence on marketing decisions than an individual's own values

Situational Factors

What are the top situational factors that would cause someone to make a bad decision? -Being rushed, see no other way, stress, didn't know it was bad

retail beacon

blue tooth -store proximity -check in (rewards) -Product information -Checkout (no need to find sales person) -Needs: apps, handsets, trust

If local Shell gasoline stations look at BP stations' prices as the primary method of determining its own prices, Shell is using ________

competition-based pricing, which considers costs to be less important than competitor's prices.

Strategic issues in retailing

consumers shop for various reasons- to search for specific items, escape boredom or learn something new -must make desired products available create stimulating shopping environments and develop marketing strategies that increase patronage -Strategically use store location, retail positioning, store image and category management

supply chains can provide a competitive advantage for many marketers

cut across all functional areas of business -an effective and efficient supply chain can sustain a business in a variety of competitive environments --inefficient supply chains can lead to INCREASED COSTS/Holistic view of supply chain

Specialty retailers

emphasize narrow and deep assortments

warehouse robots

how it work: thousands of pods, -fetching -lifting the pod -street driving -high way driving -crossing over -queing -returning to storage -finding a new spot -leaving que -entering storage -dropping the pod -charging

Agents and brokers both:

negotiate purchases and expedite sales in exchange for a commission -Know their markets well and often form long- lasting associations with customers -enable manufacturers to expand sales when resources are limited, benefit from the services of a trained sales force and hold down personal selling costs

Operations management

organizational and systemwide coordination of operations and partnerships to meet customers' product needs

When a satellite dish company uses bundling to combine phone, dish, and broadband Internet access prices, it is attempting to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock." This is an example of using a ____ pricing strategy.

psychological

Supply management

sourcing of necessary resources, products, and services, from suppliers to support all supply-chain members

Distribution

the decisions and activities that make products available to customers when and where they want to purchase them

You are a member of the North American region's sales team at a major technology company in New Haven, Connecticut. It is yearend, and there is a mad rush going on to make sure sales targets are met. One of your team members suggests to you that he can quickly boost his sales numbers by calling a friend and asking him put through an order today, then cancel the order next week before it ships. ​ You question whether this is ethical, but you need to hit your numbers for the month so you go along with the tactic any way. ​ This is an example of

the organizational relationship factors that influence ethical decision making