Distribution Decisions Marketing Ch14

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 purchases. for ex: dominos pizza anyway program allows regular customers who have set up profiles with the firm to text/tweet a pizza emoji or send a message through a smartTV to have their regular order promptly delivered

Time Utility

Having products available when the consumer wants them. ex: netflix allows customers to watch a movie whenever they want

marketing intermediaries

Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products. They are specialists in facilitating exchanges. For ex, MercuryGate provides transportation management software t firms to streamline logistics.

materials handling

Physical handling of tangible goods, supplies, and resources. this is important in warehouse operations and transportation from points of production to consumption

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. The cost of this in the US is about 8% of annual GDP

channel power

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

distribution

The decisions and activities that make products available to customers when and where they want to purchase them. For ex, if a product has high perishability, like a fruit, they have to be careful in how they do this so they ensure customer satisfaction

reorder point

The inventory level that signals the need to place a new order. need to know the order lead time, the usage rate, and amount of safety stock used

transportation

The movement of products from where they are made to intermediaries and end users

usage rate

The rate at which inventory is sold per time period.

Operations Management

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

multichannel distribution

The use of a variety of marketing channels to ensure maximum distribution. ex: some people like to shop in brink and mortar while others like to shop online

Radio Frequency Identification (RFID)

Using radio waves to identify and track materials tagged with special microchips. this has greatly improved shipment tracking and reduced cycle times. ex: zara puts tags with this on its clothing stocked in stores to decrease inventory taking time in stores.

direct channel

a distribution channel in which producers sell directly to consumers. ex apple/dell make products available thru the internet and competes w its retailers which also sell its products

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. ex: department stores, discount stores, and convince stores

vertical marketing system (VMS)

a single channel member coordinates or manages all activities to maximize efficiencies, resulting in an effective and low-cost distribution system that does not duplicate services

channel captain

a single controller / manager of a marketing channel. may establish channel policies and coordinate development of the marketing mix. may advise others on financing, business advice, or advertising services. ex: walmart dominates the supply chain for its retain stores by virtue of its magnitude of resources and a strong, nationwide customer base.

physical distribution

activities used to move products from producers to consumers and other end users. aka logistics. emerging technologies like 3d printing, drones, and driverless vehicles may further advance this.

supply chain

all the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer. the activities before manufacturing are called "upstream" and after are called downstream

retailing

all transactions in which the buyer intends to consume the product through personal, family, or household use. ex: buy meals, smartphones, and movie tickets from this activity

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. may institute this as a way of getting rid of slow-moving inventory

industrial distributor

an independent business organization that takes title to industrial products and carries inventories. ex: applied industrial technologies inc. carries millions of products from a wide variety of product lines and distributes to wide variety of businesses w business products.

retailer

an organization that purchases products for the purpose of reselling them to ultimate consumers. can facilitate comparison shopping which allows customers to evaluate different options. ex: car dealerships often cluster in the same general vicinity and so do furniture stores

a corporate VMS

combines all stages of the marketing channel, from producers to consumers, under a single owner. ex: Zara uses this to achieve channel efficiencies and maintain a max amount of control over the supply chain

horizontal channel integration

combining organizations at the same level of operation under one management. ex sherwin-williams acquired rival paint firm valspar to fast-track to international markets

intermodal transportation

combining two or more modes of transportation. ex: can transport by piggyback (using truck trailers and railway flatcars) or birdyback (using air carriers)

vertical channel integration

combining two or more stages of the marketing channel under one management. in the solar industry, for ex, salacity acquired the manufacturing firm silver, as well as a solar manufacturing capability to being making its own solar panels and bring many stages of the channel under 1 roof.

possession utility

customer has access to the product to use or to store for future use. can occur through ownership or through agreements that give the customer right to use the product. for ex, audible credits on amazon give u access to use audiobooks in the future!

field public warehouses

established by public warehouses at the owner's inventory location. the warehouser becomes custodian for the products and issues a receipt that can be used as collateral for a loan

Customer Relationship Management (CRM)

exploiting information in the supply-chain partner's information systems and making it available for easy reference to make strategy decisions that develop and sustain customer relationships

megacarriers

freight transportation firms that provide several modes of shipment. shipping methods include rail, truck, and air service.

third-party logistics (3PL) firms

have special expertise in core physical distribution activities such as warehousing, transportation, and inventory management.

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

distribution centers

large, centralized warehouses that focus on moving rather than storing goods. many are automated, with computer-directed robots, forklifts, and hoists that collect and move products to loading dock. ex: amazon relies on 90 "fulfillment centers" around the world, each using robots, computer systems, and hundreds of employees to process and fulfill customer orders. can function as the consolidation point for a company's branch warehouses

contractual vms

most popular type of vertical marketing system where channel members are linked by a legal agreement spelling out each member's rights and obligations. ex: mcdonalds and KFC are in this together

unit loading

one or more boxes are placed on a pallet or skid. can be then loaded efficiently by mechanical means, such as fork-lifts, trucks, or conveyer systems.

freight forwarders

organizations that consolidate shipments from several firms into efficient lot sizes. Ex: shipping firms like UPS and Fedex offer this door-to-door service.

distribution channels and pricing

shorter distribution channels do not necessarily make products cheaper. wholesalers, for ex, may not be necessary, but we still need their functions.

public warehouses

storage space and related physical distribution facilities that can be leased by companies. ex: distribution unlimited, inc. offers a wide range of distribution, receiving, unloading, etc. services through its facilities in NY.

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 customer.

warehousing

the design and operation of facilities for storing and moving goods. helps manage inventory for mass production at great consumption rates.

strategic channel alliance

the products of one organization are distributed through the marketing channels of another. ex: a brand of bottled water may be distributed through a marketing channel for soft drinks, or a cereal producer in the US may form a strategic channel alliance w a european food processor to facilitate international food distribution.

order processing

the receipt and transmission of sales order information

cycle time

the time needed to complete a process. for ex, dollar shave club reduced this while maintaining high customer satisfaction and quality which allowed it to grow.

exclusive distribution

using a single outlet in a fairly large geographic area to distribute a product. method is suitable for products purchased infrequently, consumed over a long period of time, or that require a high level of customer service / info. used for expensive, HQ products with high pms, like Porsche, BMW, or other luxury automobiles.

intensive distribution

using all available outlets to distribute a product. for ex, goods like soft drinks, snacks, laundry detergent, and pain relievers are available at convenience stores, service stations, discount stores, supermarkets, and other types of retailers.

Electronic Data Interchange (EDI)

using computer tech to integrate order processing with production, inventory, accounting, and transportation. reduces distribution costs and cycle times.

selective distribution

using only some available outlets in an area to distribute a product. used for shopping products which are more expensive than convenience products and customers are willing to spend more time and visit several places to compare prices/ features. ex: tv/computers

exclusive dealing

when a manufacturer forbids an intermediary to carry products of competing manufacturers. can block as much as 15% of the market, sales volume needs to be large, and the producer must be considerably larger than the retialer

manufacturer's agent

An independent businessperson who sells complementary products and is compensated by commissions. doesn't acquire title to products and doesn't take possession. acts as a salesperson on behalf of the producers.

just-in-time (JIT)

An inventory-management approach in which supplies arrive just when needed for production or resale. usually no safety stock. ex: trinity health, an operator of 90 us hospitals, began to apply this diet method to save 20 million in inventory carrying costs and improvements of supply chain efficiency

private warehouses

Company-operated facilities for storing and shipping products. ex: retailers like sears find it economical to integrate this with purchasing and distribution for their retail outlets . good for when sales volumes are fairly stable.

digital distribution

Delivering content through the Internet to a computer or other device. ex: you can watch TV on netflix or hulu / listen to music on pandora / spotify because those networks stream content to ur device and u listen to them at the same time

inventory management

Developing and maintaining adequate assortments of products to meet customers' needs. helps marketers focus on how much to order and when to reorder. want to prevent stockouts, or shortages of products