mkt exam 3

Reorder Point =

(Order Lead Time × Usage Rate) + Safety Stock

Procurement

(Sometimes called supply management) involves the processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information(long-term)

Marketing channel

(channel of distribution or distribution channel) - A group of individuals and organizations that direct the flow of products from producers to customers within the supply chain -influence on the other elements of the marketing mix -presence and accessibility -long-term commitments among a variety of firms -least flexible(hard to change)

•Birdyback

(truck and air)

•Piggyback

(truck and rail)

•Fishyback

(truck and water)

Electronic data interchange (EDI)

A computerized means of integrating order processing with production, inventory, accounting, and transportation •Functions as an information system that links marketing channel members and outsourcing firms together

General-merchandise retailers

A retail establishment that offers a variety of product lines that are stocked in considerable depth -The primary types of general-merchandise retailers are: •Department stores •Discount stores •Convenience stores •Supermarkets •Superstores •Hypermarkets •Warehouse clubs •Warehouse showrooms

•Exclusive dealing

A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers •Only considered legal if the: •Exclusive deal blocks competitors from less than 15 percent of the market •The sales volume is small The producer is smaller than the retailer

Convenience store

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

•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

•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 stores such as the Gap, T.J. Maxx, PetSmart, and Home Depot

•Lifestyle shopping center -

A type of shopping center that is typically open air and features upscale specialty, dining, and entertainment stores

•Neighborhood shopping centers -

A type of shopping center usually consisting of several small convenience and specialty stores 10 min drive

•Community shopping centers -

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

•Regional shopping centers -

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

•Superregional shopping centers -

A type of shopping center with the widest and deepest product mixes that attracts customers from many miles away •Often have special attractions beyond stores, such as skating rinks, amusement centers, or upscale restaurants

•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 •Expand rapidly and gain sizable market shares, taking business away from smaller, high-cost retail outlets

•Commission merchants -

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

Supply chain

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

•Retailing

All transactions in which the buyer intends to consume the product through personal, family, or household use(ultimate consumer)

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 •Suppliers may institute tying agreements as a means of getting rid of slow-moving inventory •A franchiser may tie the purchase of equipment and supplies to the sale of franchises, justifying the policy as necessary for quality control and protection of the franchiser's reputation •Courts accept tying agreements when: •The supplier is the only firm able to provide products of a certain quality •The intermediary is free to carry competing products as well •A company has just entered the market •Most other tying agreements are considered illegal

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 •The franchisor may receive a percentage of total sales in exchange for furnishing equipment, buildings, management know-how, and marketing assistance to the franchisee •The franchisee supplies labor and capital, operates the franchised business, and agrees to abide by the provisions of the franchise agreement

•Industrial distributor

An independent business organization that takes title to industrial products and carries inventories low cost but inventory costs local standardized items independent

•Manufacturers' agent

An independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions(large accounts gravitated) technical information low inventory

•Just-in-time (JIT)

An inventory-management approach in which supplies arrive just when needed for production or resale •Usually there is no safety stock •Requires a high level of coordination between producers and suppliers •Eliminates waste •Reduces inventory costs

Experience qualities

Attributes that can be assessed only during purchase and consumption of a service

Horizontal channel integration

Combining organizations at the same level of operation under one management

Vertical channel integration

Combining two or more stages of the marketing channel under one management - contractual vms

Private warehouses vs Public warehouses

Company-operated vs leased by companies

Digital distribution

Delivering content through the Internet to a computer or other device

Client publics

Direct consumers of a product of a nonprofit organization

•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

Third-party logistics (3PL)

Firms 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

•Television home shopping

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

Form utility

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

•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

•Specialty-line wholesalers

Full-service wholesalers that carry only a single product line or a few items within a product line

•General-merchandise wholesalers

Full-service wholesalers with a wide product mix but limited depth within product lines

•Rack jobbers

Full-service, specialty-line wholesalers that own and maintain display racks in stores

•Superstores

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

time utility

Having products available when the consumer wants them

•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

•Manufacturers' agents

Independent intermediaries that represent two or more sellers and usually offer customers complete product lines

•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(full/limited)

General publics

Indirect consumers of a product of a nonprofit organization

•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

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 non-food products

•Warehouse clubs (buying clubs) -

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

•Drop shippers (desk jobbers)

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

•Truck wholesalers (track jobbers)

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

Place utility

Making products available in locations where customers wish to purchase them

Operations management

Managing activities from production to final delivery through system-wide coordination(creation)

•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

Nonprofit marketing

Marketing to achieve some goal other than ordinary business goals such as profit, market share, or return on investment •Nonprofit-organization marketing •Social cause marketing Change in values Financial contribution Donation of services •Greater opportunities for creativity •More difficult to judge performance •Sometimes controversial

•Full-service wholesalers

Merchant wholesalers that perform the widest range of wholesaling functions

•Limited-service wholesalers

Merchant wholesalers that provide some services and specialize in a few functions

Marketing intermediaries

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

Unit loading

One or more boxes are placed on a pallet or skid materials handling

•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 to meet customers' needs and wants (delivery) •Order processing •Inventory management •Materials handling •Warehousing •Transportation

•Warehousing

Provides time utility by enabling firms to compensate for dissimilar production and consumption rates •Helps stabilize prices and the availability of seasonal items

•Extreme-value stores -

Retailers that are a fraction of the size of conventional discount stores and typically offer very low prices on smaller size name-brand nonperishable household items

•Discount stores

Self-service, general-merchandise stores that offer brand-name and private-brand products at low prices •Accept lower profit margins than conventional retailers in exchange for high sales volume Carry a wide but carefully selected assortment of products in order to keep inventory turnover high

Stockouts

Shortage of products

•Off-price retailers

Stores that buy manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts

Traditional specialty retailers

Stores that carry a narrow product mix with deep product lines limited-line retailers / single-line retailers apparel, jewelry, sporting goods, fabrics, computers, and pet supplies

•Hypermarkets

Stores that combine supermarket and discount store shopping in one location •Are larger than superstores

Search qualities

Tangible attributes that can be judged before the purchase of a product(airline schedule)

•Channel power

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

Order lead time

The average time lapse between placing the order and receiving it

Containerization

The consolidation of many items into a single, large container that is sealed at its point of origin and opened at its destination materials handling

Possession utility

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

Distribution

The decisions and activities that make products available to consumers when and where they want to purchase them

•Direct selling -

The marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace

•Intensity of market coverage

The number and kinds of outlets in which a product will be sold •Replacement rate •Product adjustment (services) •Duration of consumption •Time required to find the product

•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 traffic,outside,inside

Sourcing

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

Usage rate

The rate at which a product's inventory is used or sold during a specific time period

Order processing

The receipt and transmission of sales order information •Order entry - Begins when customers or salespeople place purchase orders •Order handling - Product availability and customer creditworthiness is verified; order assembly occurs •Order delivery - Delivery is scheduled with an appropriate carrier

•Cycle time

The time needed to complete a process •Firms should look for ways to reduce cycle time while maintaining or reducing costs and maintaining or improving customer service

Multichannel distribution

The use of a variety of marketing channels to ensure maximum distribution

•Vending -

The use of machines to dispense products

•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

•Wholesaling

Transactions in which products are bought for resale, for making other products, or for general business operations •It does not include exchanges with ultimate consumers •supply-chain management activities(info/sales/distrib/inven)

•Intermodal transportation

Two or more transportation modes used in combination

•Intensive distribution

Using all available outlets to distribute a product Is appropriate for products that: •Have a high replacement rate •Require almost no service •Are bought based on price cues •must be available at a store nearby and be obtained with minimal search time

Radio frequency identification (RFID)

Using radio waves to identify and track materials tagged with special microchips •Is also useful for asset management and data collection materials handling

Credence qualities

attributes that customers may be unable to evaluate even after purchasing and consuming a service(day care)

pipelines

automated slow cheap dependable "shrinkage"?

empathy

caring and listening

waterways

cheapest method heavy, low value, nonperishable water accessible dependent

assurance

competence and covey confidence

reliability

confirmation ticket departing on time accurate bank statement

intensive market coverage

convenience products like chips and soda

channel conflict

each members role must be clear agreement needs strong but now overpowering leadership

tangibles

equipment used in medical exam neatly attired repair person freshness of food

airways

fastest most expensive highvalue or perishable goods

trucks

flexible schedule and routes expensive weather dependent size and weight restrictions

railroad

heavy bulky frieght long distance over land

•Department stores

large retail organizations characterized by a wide product mix and organized into separate departments to facilitate marketing efforts and internal management •Are distinctly service oriented •Are found in most places with populations of more than 50,000 •Facing intense competition from discount stores and online retailing

location

least flexible public transportation kinds of product compeytition

•Mail-order wholesalers -

limited-service wholesalers that sell products through catalogs

retailers

make shopping easier comparison shopping

Service Quality Specifications

manager commitment

•Channel captain (channel leader)

producer, wholesaler, or retailer w/ channel power

Off-peak pricing

reducing prices of services during slow periods in order to boost demand

•Direct-response marketing

retailer advertises a product and makes it available through mail or telephone orders

selective market coverage

shopping products like iphones and shoes

exclusive market coverage

specialty products like gucci and bmw

category management

store isles share sales data

•Retailers strategically use

store location, technology, retail positioning, store image, and category management

•Trade-offs

strategic decisions to combine (and recombine) resources for greatest cost-effectiveness •The goal is not always to find the lowest cost, but rather to find the right balance of costs

Safety stock

the amount of extra inventory a firm keeps to guard against stockouts resulting from above-average usage rates and/or longer-than-expected lead times

responsiveness

water refill

characteristics of services marketing

•Intangibility •Inseparability of production and consumption(consumer present) •Perishability(cant store for later) •Heterogeneity(Variation in quality) •Client-based relationships •Customer contact(healthcare vs drycleaning)

•Transportation

•Is the most expensive physical distribution method

specialty retailers

•Traditional specialty retailers •Category killers •Off-price retailers