Understanding Business Chapter 15A

The utitliy provided to customers by freezing strawberries so they are available year round is _______ utility.

Time

Pipelines

Used for transporting oil, gas, and other chemical products fast cheap

The economic term for the want-satisfying ability, or value, that organizations add to goods or services is ________

Utility

Intermediaries add costs to products, but they also provide ______ such as convenience and assortment.

Values

A storage warehouse

stores products for a relatively long time.

Intermodal Marketing Companies (IMC)

companies that act as intermediaries between intermodal railroad companies and shippers; essentially transportation brokers for the rail industry

A website that is available 24/7 provides customers with ______ utility.

Time

Independently owned firms that take title to the goods they handle are known as ________ wholesalers.

Merchant

Department store - carries a wide variety of products such as clothes, furniture, and housewares, usually at higher prices than discount stores Sears, Nordstrom, Macy's Discount store Walmart, Target Supermarket Safeway, Albertson's, Wegman's, Kroger's, Publix Warehouse club Costco, Sam's Club Convenience store 7-11 Category killer Staples, Office Depot, Bass Pro Shops

!!

Corporate Distribution Systems

A distribution system in which all of the organizations in the channel of distribution are owned by one firm.

Contractual Distribution Systems

A distribution system in which members are bound to cooperate through contractual agreements. intermediaries are independent but agree to cooperate are participating

Administered Distribution Systems

A distribution system in which producers manage all of the marketing functions at the retail level.

Social commerce

A form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services.

storage

A large part of the cost of distribution is storage. Storage costs include: operating the warehouse facility the cost of the warehouse facility the cost of equipment to move goods in the warehouse Holding goods in a facility or facilities for later distribution is a logistics function. used to hold products for a relatively long time.

Wholesaler

A marketing intermediary that sells products to other organizations. Selling products to specific stores so that each store has its own unique inventory Selling products to a school or hospital to run their business is considered a wholesale transaction Selling products to a company for internal use in production is wholesaling.

Multi-level marketing

A scheme for distributing products or services that involves participants recruiting others to become involved in distribution. advantage is low cost of entry

Channel of Distribution

A whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.

A reason why marketing intermediaries such as transport companies and wholesalers have survived is that they: a. add enough value to products to outweigh the added costs b. employ many people and can't reduce staff c. are a part of the existing system and will not change d. add to the total costs of products

Add enough value to products to outweigh the added costs

Service Utility

Adding value by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time.

Place Utility

Adding value to products by having them where people want them.

Time Utility

Adding value to products by making them available when they're needed.

Information Utility

Adding value to products by opening two-way flows of information between marketing participants.

Marketing intermediaries who bring buyers and sellers together and help negotiate an exchange without taking title to the goods themselves are _______ or _________

Agents or brokers

Freight Forwarder

An organization that puts many small shipments together to create a single large shipment that can be transported cost-effectively to the final destination.

Retailer

An organization that sells to ultimate customers. A firm that purchases goods from a manufacturer and then sells those goods or products to final consumers approx 3.7 million of retail stores

Direct Marketing

Any activity that directly links manufacturers or intermediaries with the ultimate customers. Catalog sales and online sales are activities of direct marketing because they link ultimate consumers to manufacturers.

Marketing intermediaries such as transport companies add _______ to products, but they are usually outweighed by the _______ they create for

Cost, utility

Intensive Distribution

Distribution that puts products into as many retail outlets as possible.

Selective Distribution

Distribution that sends products to only a preferred group of retailers in an area.

Exclusive Distribution

Distribution that sends products to only one retail outlet in a given geographic area.

Possession Utility

Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, guarantees, and follow-up service.

Agents and Brokers

Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but do not take title to the goods they offer.

A butcher who cuts a larger piece of beef into steaks is an example of __________ utility.

Form

A manufacturer who assembles the components of a computer for sale is providing which type of utility?

Form (Turning raw materials into useful products)

Which of these wholesalers are independently owned firms that take title to the goods they handles, maintain inventory, and a sales force?

Full service merchant wholesaler Merchant wholesaler

Utility

In economics, the want-satisfying ability, or value, that organizations add to goods and services

Merchant Wholesalers

Independently owned firms that take title to the goods they handle.

Opening 2-way communication between marketing participants provides _______ utility.

Information

Marketing __________ assist in moving goods & services in either B2B or B2C channels of distribution.

Intermediaries

Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C) are called ______.

Marketing intermediaries

Marketing Intermediaries

Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C). performing necessary activities such as storage and transportation providing convenience reducing the number of exchanges between producers and buyers A reason why marketing intermediaries such as transport companies and wholesalers have survived is that they: add enough value to products to outweigh the added costs Intermediaries add costs to products, but they also add value such as convenience and assortment. assist in moving goods and services in either B2B or B2C channels of distribution.

Successfully transferring ownership of a good is considered __________ utility.

Possession

retail cooperatives

Retail cooperatives such as Associated Grocers. This arrangement is much like a wholesaler-sponsored chain except it is initiated by the retailers. The same degree of cooperation exists, and the stores remain independent. Normally in such a system, retailers agree to focus their purchases on one wholesaler, but cooperative retailers could also purchase a wholesale organization to ensure better service.

Electronic Retailing

Selling goods and services to ultimate consumers (e.g., you and me) over the Internet.

Online Retailing

Selling goods and services to ultimate customers (e.g. you and me) over the Internet.

Direct Selling

Selling to customers in their homes or where they work.

Reverse Logistics

The area of logistics that involves bringing goods back to the manufacturer because of defects or for recycling materials.

Inbound Logistics

The area of logistics that involves bringing raw materials, packaging, other goods and services and information from suppliers to producers.

Outbound Logistics

The area of logistics that involves managing the flow of finished products and information to business buyers and ultimate consumers (people like you and me).

Logistics

The marketing activity that involves planning, implementing, and controlling the physical flow of material, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Materials Handling

The movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations.

Supply Chain Management

The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate.

Telemarketing

The sale of goods and services by telephone.

Supply Chain (or value chain)

The sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers.

Intermodal Shipping

The use of multiple modes of transportation to complete a single long-distance movement of freight.

Staples acts both as a ______ in the B2B environment and as a _________ in the B2C environment.

Wholesaler, retailer

Rack Jobbers

Wholesalers that furnish racks or shelves of merchandise to retailers, display products, and sell on consignment.

Cash-and-Carry Wholesalers

Wholesalers that serve mostly smaller retailers with a limited assortment of products.

Drop Shippers

Wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer. A wholesaler who would most likely arrange a shipment of lumber for a new building

Marketing intermediaries add value and create efficiencies by: a. providing convenience b. eliminating activities such as transportation & storage c. reducing the # of exchanges between producers & buyers d. Performing necessary activities such as storage and transportation

a, c & d

Which of the following is true about marketing intermediaries: a. Real estate agents make the process of selling your home easier b. If consumers could buy from manufacturers directly, it would be a more streamlined process c. Buying directly from a manufacturer could lower transportation costs

a. Real estate agents make the process of selling your home easier

The "P" of marketing, which includes shipping, transportation, storage, and logistics is known as: a. place or distribution b. pricing or value c. product and production d. promotion and communication

a. place or distribution

Marketing intermediaries who sell to ultimate consumers are: a. Retailers B. Wholesalers c. Brokers d. Shippers

a. retailers

Select all that apply Which of the following are part of possession utility (Doing whatever is necessary to get product to consumer?) a. Meeting objections b. Delivery c. Installation d. Providing credit

b, c and d

Small businesses can use nonstore retailing methods such as the Internet to: a. reduce their personal contact w/ consumers b. open new channels of distribution c. increase prices for their products d. improve delivery for their products

b. open new channels of distribution

When an individual goes to a supermarket and selects a box of cereal from several choices of type, brand, and size, it is an example of: a. too high a cost for the use of intermediaries b. the value of marketing intermediaries who provide an assortment c. marketing intermediaries reducing the cost from the producer d. good packaging that reduces the cost of the product

b. the value of marketing intermediaries who provide an assortment

The goal of logistics is to manage the physical flow of materials and info from points of origin to points of consumption: a. meeting company profit goals b. fulfilling all customer needs c. meeting customer requirements at a profit d. meeting customer requirements

c. meeting customer reqs at a profit

A way that traditional retailers can compete with online retailers is to: be so efficient they

can beat them on cost

Sharp Focus Cameras is facing intense competitive pressure. Top marketing managers are looking for ways to cut costs. They are considering a plan to cut distribution costs by eliminating marketing intermediaries from the channel of distribution. If Sharp Focus carries out this plan, it is likely to find that:

it will be unable to perform the functions as efficiently as they were performed by the marketing intermediaries

full-service wholesalers

merchant wholesalers that perform the widest range of wholesaling functions A merchant who performs all of the service functions Assumes risk by taking title Provides capital and credit Provides a sales force

nonstore retailers

online retailing, direct response retailing, direct selling, and vending Vending machines, kiosks, and the internet are forms of nonstore retailing that enable small businesses to reach people at all hours.

limited-function wholesalers

rack jobbers drop shippers cash-and-carry wholesalers

Distribution warehouse

used to gather and redistribute products.