MKTG 321 Exam 2

Supply Chain

"Make and sell" view includes the firm's raw materials, productive inputs, and factory capacity.

New Product Development Processes Stage

-7 stages -Get more expensive

Innovation Packaging

-Proctor and Gamble pringles

Advantages of Industrial Distributor

1. Reduce financial Burden by providing customers with c.c. services 2. Aware of local needs and pass on market info. to producers

Delivering exceptional service quality

A service company must consider the 4 factors that affect service quality: analysis of customer expectations (marketing research and open communication with employees), service quality specifications (service goals and management commitment to service quality), employee performance (employee training and evaluation and compensation systems), and management of service expectations (advertising and good internal communications)

Supply-Chain Management

A set of approaches used to integrate the functions of operation management so products are produced and distributed in the right quantities, to the right locations, and at the right time. Includes all entities that facilitate product distribution and benefit from cooperative efforts Ex: Manufacturing, Research, Sales, Ad

New-product development

A seven-phase process for introducing products; idea generation, screening, concept testing, business analysis, product development, test-marketing, and commercialization

Order Entry

Begins when customers or salespeople place purchase orders via telephone, regular mail, email or website. Also may handle complaints, prepare progress reports and forward sales order info.

Corporate VMS

Combines all stages of the marketing channel, from producers to consumers under a single owner. Ex: Supermarket chains, The Limited

Horizontal Channel Integration

Combining organizations at the same level of operation under one management. May merge with other organizations at the same level in the marketing channel.

Warehouse decisions

How many, what types, where to locate, warehouses, distribution centers

Customer Services

Human or mechanical efforts or activities that add value to a product

NPD Stage 1

Idea Generation -Stimulate Creativity

Give-and- Take

Idea that the overall channel ultimately will benefit

Full-Line forcing

In which a supplier requires that channel members purchase the suppliers entire line to obtain any of the suppliers products. Used to ensure that intermediaries accept new products and that a suitable range of products is available

Logistics Management

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

Order Handling

Involves several task, which includes transmitted to warehouse, product availability verified and credit department

Order Processing

Is the receipt and transmission of sales order information, which facilitates product flow. If carried out quickly and accurately can contribute to customers satisfaction, decrease cost and cycle time and increase profits.

Heterogeneity provides one advantage to service marketers:

It allows them to customize their services to match the specific needs of individual customers -Customized services can be expensive for both the provider and the customer

Secondary Use packaging

Packaging that can be reused

Three Ways to Delete a Product

Phase-Out, Run- Out, Immediate Drop

Customer contact

Refers to the level of interaction between the service provider and the customer necessary to deliver the service -High-contact services include health care, real estate, and legal services -Low-contact services are tax prep., auto repair, travel reservations, and dry cleaning -Employee satisfaction is one of the most important factors in providing high service quality to customers -Resulting marketing challenges: service providers are critical to delivery, require high levels of service employee training and motivation, changing a high-contact service into a low-contact service to achieve lower costs is difficult to achieve without reducing customer satisfaction

Supply Management

Refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition

Upstream

Suppliers

Brand Mark

The part of the brand that can be seen but not voiced -Ex. Nike Swoosh

Brand Name

The part of the brand that can be voiced -Tells you something about the product

Brand Manager

The person responsible for a single brand

Brand manager

The person responsible for a single brand

Market manager

The person responsible for managing the marketing activities that serve a particular group of customers

Product Manager

The person within an organization who is responsible for a product, a product line, or several distinct products that make up a group.

Styling

The physical appearance of a product

Exclusive Distribution

Uses only one outlet in a relatively large geographic area and is suitable for products purchased infrequently, consumed over a long period of time or require service. Ex: Expensive, high quality products like Porsche, BMW, Fendi Handbags, Mont Blanc pens

Selective Distribution

Uses only some available outlets in an area to distribute a product. Is appropriate for shipping products such as iPods, televisions, DVD and Shoes. Available in some outlets

Channel Cooperation

Vital if each member is to gain something from other members. It enables retailers, wholesalers, suppliers, and logistics providers to speed up inventory replenishment, improve customer service, and cut the costs of bringing products to the consumers.

Order Lead Time Usage Rate Amount of safety stock Required

What 3 things do you need to know in order to calculate the reorder point?

1. Role of each channel member must be specified 2. Members of channel partnerships must institute certain measures of channel coordination

What are 2 conditions that partnerships can be reestablished if met?

Wholesalers Retailers

What are 2 examples of intermediaries?

1. When to order 2. How much to order

What are 2 major issues that marketers focus on when dealing with inventory?

Tibbr yammer

What are 2 programs that offer online programs that input business data into a social networking site formula

Channels for Products Channels for Business Products

What are 2 ways to classify marketing channels

1. Corporate VMS 2. Administered VMS 3. Contractual VMS

What are 3 forms of Vertical Marketing Systems?

Downstream

Wholesalers, retailers

homesourcing

a practice that has gained popularity among a number of U.S. businesses.. customer-contact jobs, especially at call centers, are outsourced into the homes of workers

four factors of service quality

analysis of customer expectations, service quality specifications, employee performance, and management of service expectations

tying agreements

are agreements where the dealer must take most or all of the line.

experience qualities

attributes that can be judged only during purchase or consumption of a service

client-based relationship

interactions that result in satisfied customers who use a service repeatedly over time.. develop long-term relationships with "clients".. quality services build relationships and customers become loyal and won't switch to competitors

intangibility

means a service is not physical and therefore cannot be perceived by the senses (cannot be seen, touched, tasted, or smelled, cannot be physically possessed)

Disintermediation

occurs when product or service producers cut out intermediaries and go directly to final buyers, or when radically new types of channel intermediaries displace traditional ones.

When a theater entices customers to see movies during the daytime by offering tickets at a reduced price, it is trying to solve the services marketing problem of

off-peak demand

Third-party logistics

outsourcing of logistics functions to third-party logistics providers.

Functional Modifications

product's versatility, effectiveness, convenience, or safety Benefits: Makes a product more useful and enlarges its market, Places a product in a favorable competitive position by providing benefits that competing brands do not offer, Helps an organization achieve a progressive image Modifications sometimes are made in response to product shortcomings and potential lawsuits

inseparability

production and consumption cannot be separated.. they are simultaneous, because of this customers not only want a specific type of service but also expect it to be provided in a specific way by a specific individual

Vertical Marketing Systems (VMSs)

provide channel leadership and conflict of producers, wholesalers, and retailers acting as a unified system and consist of (Corporate, Contractual, administered marketing systems).

Aesthetic Modification

sensory appeal of a product by altering taste, texture, sound, smell, or appearance Can help a firm: Differentiate its product from competing brands, Gain market share Drawback is that what is aesthetically appealing is subjective and varies between consumers

When service companies change high-contact services into low-contact services, the

service becomes less personalized.

zone of tolerance

the difference between a desired level of service and an acceptable level of service

client public

the direct consumer of the product; most of the attention in developing a marketing strategy is directed toward the client public

general public

the indirect consumer of the product

Service marketers are less concerned with:

warehousing and transportation than are goods marketers. They ARE concerned about inventory management, especially balancing supply and demand for services

In service marketing, the most important link to the customer is

well-trained contact employees.

Demand Chain

"Sense and respond" view suggests that planning starts with the needs of the target customer, and the firm responds to these needs by organizing a chain of resources and activities with the gal of creating customer value.

Marketing logistics

(physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of orgin to points of consumption to meet consumer requirements at a profit

Dimensions of service quality

*Tangibles: Physical evidence of the service* -Evaluation: Appearance of physical facilities and service personnel, tools or equipment used to provide the service -Examples: Clean and professional-looking docs. office, clean and neatly attired repairman, freshness of food in a restaurant, equipment used in a medical exam *Reliability: Consistency and dependability in performing the service* -Evaluation: Accuracy of billing or recordkeeping, performing services when promised -Examples: An accurate bank statement, a confirmed hotel reservation, an airline flight departing and arriving on time *Responsiveness: Willingness or readiness of employees to provide the service* -Evaluation: Returning customer phone calls, providing prompt service, handling urgent requests -Examples: A server refilling a customer's cup without being asked, and ambulance arriving within 3 minutes *Assurance: Knowledge/competence of employees and ability to convey trust and confidence* -Evaluation: Knowledge and skills of employees, company name and reputation, personal characteristics of employees -Examples: A highly trained financial adviser, a known and respected service provider, a doctor's bedside manner *Empathy: Caring and individual attention provided by employees* -Evaluation: Listening to customer needs, caring about customer's interests, providing personalized attention -Examples: A store employee listening to and trying to understand a customer's complaint, a nurse counseling a heart patient

Packaging

-A $50 billion a year industry -Can help differentiate your product

Product

-A bundle of tangible and intangible attributes that a seller offers (intangible-buying status)

LIne Extension

-A product that is closely related to existing products in the line, but meets different customer needs

Theater metaphor

-A way that might help you view services is using the metaphor of a theater -A play features production elements (actors, audience, a setting) and a performance. The actors (service workers) create a performance (service) for the audience (customers) in a setting (service environment) where the performance unfolds. -Costumes (uniforms), props (devices, music, machines), and the setting (f2f or indirect through telephone or Internet) help complete the metaphor. -A service provider such as Disney World illustrates the metaphor: Employees wear costumes, there is an entertainment setting, and more service contact with employees involves playing roles and engaging in planned skits

The growth and importance of services

-All products (whether goods, services, or ideas) are to some extent intangible. -Services as products should not be confused with the related topic of customer service. -The importance of services in the US economy led the US to be known as the world's first service economy -A major catalyst in the growth of consumer services has been long-term economic growth (slowed by a few recessions) in the US, which has led to increased prosperity and interest in financial services, travel, entertainment, and personal care.

Product Deletion- Phase-out approach

-Allows the product to decline without changing the marketing strategy

Channel Design Decisions

-Analyze consumer needs -Setting channel objectives -indentifying major channel alternatives -evaluation

Jamming

-Anything a competitor does to screw up competitors test market

Product Classification

-Based on consumer search characteristics, 4 categories

Product Modification

-Changing one or more characteristics of the product. The original product does not stay on the line.

Category Consistent packaging

-Done the same for all competitors -Ex. peanut butter

Multiple

-Ex. Pepsi Cube -marketers sometimes use twin packs, six packs, etc...

Product Deletion- Run-Out Policy

-Exploits any strengths left in the product

Things you can do to stay in growth stage

-Get customers to buy more -Find new uses for products -Find new customers for product

How channel members add value

-Information. promotion, contact, matching, negotiation, physical distribution, financing, risk taking.

Characteristics of services

-Intangibility -Inseparability or production and consumption -Perishability -Heterogeneity -Client-based relationships -Customer contact

Product Classification- Shopping Product

-Items for which buyers are willing to expend considerable effort in planning and making purchases

Product Classification- Specialty Product

-Items with unique characteristics that buyers are willing to expend considerable effort to obtain -Ex. $700 glassware

Product Life Cycle- Introduction Stage

-Its first appearance in the marketplace, when sales start at zero and profits are negative

Inventory management

-Just in time systems -RFID (knowing exact product location) -Smart shelves (placing orders automatically)

How is nonprofit marketing different from for-profit?

-Many nonprofit organizations strive for effective marketing activities -Nonprofit organizations have greater opportunities for creativity than most for-profit business organizations, but trustees or board members of non profit organizations are likely to have difficulty judging the performance of the trained professionals they oversee -Nonprofit is sometimes quite controversial

Product Classification- Unsought Product

-Products purchased to solve a sudden problem, products of which customers are unaware, and products that people do not necessarily think of buying

The tangibility continuum

-Pure good, if they exist at all, are rare because practically all marketers of goods also provide customer services -Even a tangible product like sugar must be delivered to the store, priced, and placed on a shelf before a customer can purchase it. -Intangible, service-dominant products such as education or health care are clearly service products -Most products fall somewhere in the middle of this continuum -Products such as a restaurant meal or a hotel stay have both tangible and intangible dimensions

Brand Extension

-Putting your brand name on completely different product category -Ex. Bic made pen then lighters

Product Classification-Convenience Product

-Relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort -Ex. Soda

Product Life Cycle

-Represents the stages a product moves through from its introduction to the market to its disappearance from the market

Product Manager

-Responsible for a product, a product line, or several distinct products that make up a group

Product Life Cycle- Growth Stage

-Sales rise rapidly, profits reach peak, and then they start to decline -Ex. Sports drinks

Pricing of services

-Services should be priced with consumer price sensitivity, the nature of the transaction, and its costs in mind -Other service prices are based on time spent on the task (attorneys charge by the hour or day) -Some services use demand-based pricing. When demand for a service is high, the price is also high -In cases where customers tend to purchase services in a bundle, marketers must decide whether to offer the services at one price, price them separately, or use a combo of both methods -Because of the intangible nature of services, customers sometimes rely heavily on price as an indicator of quality -For certain types of services, market conditions may limit how much can be charged for a specific service, especially if the services in this category are perceived generic in nature.

Time-sensitive services

-Some services are time sensitive, meaning that a significant number of customers desire the service around the same time. This point in time is called *peak demand.* A provider of time-sensitive services brings in more of its revenue during peak demand -Providers of time-sensitive services can use demand-based pricing to manage the problem of balancing supply and demand. They charge tip prices during peak demand and vise versa

New Product Venture Team (Matrix)

-Take people from different departments and have them work on individual products

Product Deletion- (Immediate) Drop

-Taking an unprofitable product off the market when losses are too great to prolong the products life -Ex. McDonald's onion rings

Adoption Process

-The 5 series of steps a buyer goes through in deciding to try and then regularly use a new product

Promotion of services

-The intangibility of services results in several promotion-related challenges to service marketers. Because it may not be possible to depict the actual performance of a service in an advertisement or display it in a store, explaining a service to customers can be a difficult task -The make service more tangible, promotions for services may show pictures of facilities, equipment, and service personnel -Branded marketing can help service firms hone their messages for maximum impact -Compared with good marketers, service providers are more likely to promote price, guarantees, performance documentation, availability, and training and certification of contact personnel -Through their actions, service contact personnel can be directly or indirectly involved in the personal selling of services -Because of the heterogeneity and intangibility of services, word-of-mouth communication is particularly important in service promotion

Brand Equity

-The marketing and financial value associated with a brand's strength in a market -Ex. Nike

Product Audit

-The regularly scheduled evaluation of the existing products in the product mix -Checking to see if your products are redundant

Family Branding

-What Kellogg's does -Uses brand names on all products

Product Life Cycle- Declined Stage

-When the sales fall rapidly -Ex. Typewriters

Product Life Cycle- Maturity Stage

-When the salve curve peaks and starts to decline, and profits continue to fall -Stabilized -Ex. Soda

Advantage Manufacturing Agent

1. Considerable technical and market information 2. Established set of customers 3. Paid on commission basis

Customers usually have 2 levels of expectations:

1. Desirable: What the customer really wants 2. Acceptable: What the customer views as adequate The difference between the 2 levels of expectations is called the customer's zone of tolerance.

Disadvantages of Industrial Distributor

1. Difficult to control 2. Stock competing brands 3. Incur numerous expenses 4. Lack Technical knowledge

Disadvantage Manufacturing Agent

1. Little control over agents 2. Concentrate on larger accounts 3. Don't follow up with customers after sale 4. Limited ability to provide customer with parts/ repairs

1. Create Utility 2. Facilitate Exchange Efficiencies

2 significances of Marketing Channels?

Manufacturer's Brand

A brand initiated by producers to ensure that producers are identified with their products at the point of purchase -Heinz, Levi

Generic Branding

A brand that indicating only the product category -1992 really caught on -10% of sales, but now much less

Venture team

A cross-functional group that creates entirely new products that may be aimed at new markets.

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. The major role is to make products available at the right time, at the right place in the right quantities

Trademark

A legal designation of exclusive use of a brand -Ex. Coke

Test marketing

A limited introduction of a product in geographic areas chosen to represent the intended market

Brand

A name, term, design, symbol, or other feature that identifies one seller's product as distinct from those of other sellers

Homesourcing

A practice that has gained popularity among US businesses as telecommunications technology has improved is *homesourcing*, in which customer-contact jobs, such as call centers, are outsourced to the homes of workers -Staffing agencies like Rhema Business Solutions are dedicated to providing homesourcing employees to organizations in a variety of industries, including nursing, marketing and sales, advertising, Web development, and writing. -Companies as diverse as 1-800-FLOWERS, J.Crew, and Office Depot all utilize homesourcing for some tasks

Intangibility

A service is not physical and therefore cannot be touched -Example: It is impossible to touch the education that students derive from attending classes - the intangible benefit is become more knowledgeable in a chosen field of study -Services cannot be physically possessed. Students cannot physically tough knowledge as they can an iPod or a car -The level of intangibility of a service increases the overall importance of the brand image when a customer is deciding which to purchase -Resulting marketing challenges: difficult for customer to evaluate, customer does not take physical possession, difficult to advertise and display, difficult to set and justify prices, service process is usually not protectable by patents -To cope with the problem of intangibility, marketers employ tangible cues (such as well-groomed, professional-appearing contact personnel and clean, attractive physcal facilities) to assure customers about the quality and professionalism of the service -Makes it difficult for customers to evaluate a service prior to purchase so it requires service marketers such as stylists or attorneys, to market promises to customers

Exclusive Dealing

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

Bonded Storage

A warehousing arrangement in which imported or taxable products are not released until the products owners pay US customs duties, taxes or other fees

Adoption Process 5- Adoption

Actually Make the purchase

Intermediaries (Channel members)

Add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them.

Adoption Process 2- Interest

After aware, become interested

Phase-Out

Allows the product to decline without a change in the marketing strategy

Tying agreements

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

Supply Chain

An important function of distribution which refers to all the activities associated with the flow and transform of products from raw materials through to the end customer.

Industrial Distributor

An independent business that takes title to products and carries inventories, which usually sell standardized items

Consistency of Product Mix

Are the product lines interrelated

Form Utility

Assembling, preparing, or otherwise refining the product to suit individual customer needs.

Experience qualities

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

Credence qualities

Attributes that customers may be unable to evaluate even after purchasing and consuming a service -Surgical operations, automobile repairs, and legal representation -Most consumers lack the knowledge or skills to evaluate the quality of these services so they must place a great deal of faith in the integrity and competence of the service provider -Successful service marketers must understand how consumers judge service quality

NPD Stage 4

Business Analysis -Can it be done profitably, look at the $ and cents -Ride at Disney cannot cost over $70 million

Functional Modifications

Changes affecting a product's versatility, effectiveness, convenience, or safety

Product Modifications

Changes in one or more characteristics of a product

Product Modifications

Changes in one or more characteristics of a product original product does not remain in the line Some requirements: Product must be modifiable, Customers must be able to perceive a difference, Modifications should produce greater customer satisfaction Drawback is that consumers accustomed to the original may resist the modified version

Quality Modifications

Changes relating to a product's dependability and durability

Aesthetic Modifications

Changes relating to the sensory appeal of a product

Administered VMS

Channel members are independent, but a high level of inter-organizational management is achieved through informal coordination Ex: Intel, Kellogg, Magnavox

Vertical Channel Integration

Combines 2 or more stages of the channel under one management. Occurs when one member of a marketing channel purchase the operations of another member or simply performs the functions of another member, eliminating the need for the intermediary.

NPD Stage 7

Commercialization -The product is introduced to the market -Full Scale production

Private Warehouse

Companies use this for shipping and storing their own products. Usually for special handling and storage and that want control of warehouse design and operates.

NPD Stage 3

Concept Development -Make sure people like the idea, before money is spent

Conventional Distribution Systems

Consists of one or more independent producers, wholesalers , and retailers. Each seeks to maximize its own profits, and there is little control over the other members and no formal means for assigning roles and resolving conflict.

Place Utility

Created by making products available in locations where customers wish to purchase them Ex: Shopping malls with ATM

Product Differentiation

Creating and designing products so that customers perceive them as different from competing products

Service quality

Customers' perceptions of how well a service meets or exceeds their expectations. -Forces service marketers to examine quality from the customer's viewpoint

Product Development

Determining if producing a product is technically feasible and cost effective

Line Extension

Development of a product that is closely related to existing products in the line but is designed specifically to meet different customer needs.

Client publics

Direct consumers of the product in nonprofit marketing -The client public for a university is its student body, and its general public includes parents, alumni, and trustees -Usually receives most of the attention when an organization develops a marketing strategy

Product Deletion

Eliminating a product from the product mix when it no longer satisfies a sufficient number of customers.

Product Deletion

Eliminating a product from the product mix, usually because it no longer satisfies a sufficient number of customers

Field public Warehouses

Established by public warehouses at the owners inventory location

Business Analysis

Evaluating the potential impact of a product idea on the firm's sales, costs, and profits

Strategic Channel Alliance

Exist when the products of one organization are distributed through the marketing channels of another. The products of the 2 firms are similar with respect to target markets but they are not direct competitors

Run-Out

Exploits any strengths left in the product

Channel Partnerships

Facilitate effective supply-chain management when partners agree on objectives, policies and procedures for physical distribution efforts associate with the suppliers products. Eliminate redundancies and Reassign tasks for maximum system wide efficiency

Reasons for Line Extensions

Focus on a different segment satisfy needs of current segment Capture market share from competitors

Goal-Driven Supply Chains

Focus on the "competitive priorities" of speed, quality, cost, or flexibility as the performance objective

Distribution

Focuses on the decisions and activities involved in making products available to customers when and where they want to purchase them.

Megacarriers

Freight transportation companies that offer several shipment methods including rail, truck, and air service, Ex: CSX

Intermediaries (Economic view value)

From an economic view, intermediaries transform the assortment of products into assortments wanted by consumers.

Time Utility

Having products available when the customer wants them. Ex: Movies on Demand

Product design

How a product is conceived, planned, and produced

New Product Organization

How companies structure

Upstream Partners

Include raw material suppliers, components, parts, information, finances, and expertise to create a product or service.

Business services

Include support and maintenance, consulting, installation, equipment leasing, marketing research, advertising, temporary office, personnel, and janitorial services

Manufacturing Agent

Independent Businessperson who sells commentary products of several producers in assigned territories and is compensated through commission. Does not acquire title to the products and usually does not take possession.

General publics

Indirect customers in nonprofit marketing

Intermodal Transportation

Integrated approach in combining and coordinating two or more modes. Easier because of new developments within the transportation industry.

Vertical Marketing System (VMS)

Integration has been successfully institutionalized in a marketing channel, in which a single channel member coordinates or manages channel activities to achieve efficient low-cost distribution aimed at satisfying target market customers. Also, they are competitive accounting for a large share of retail sales in consumer goods

Client-based relationships

Interactions that result in satisfied customers who use a service repeatedly over time -Success of many services depends on creating and maintaining client-based relationships -Lawyers, accountants, and financial advisors call their customers clients and often develop and maintain close, long-term relationships with them... it is not enough to attract customers -Social media have made it easier for customers to share information about service companies -Word-of-mouth (or going viral, which is the online equivalent) is a key factor in creating and maintaining client-based relationships -The service provide must take steps to build trust, demonstrate customer commitment, and satisfy customers so well that they become very loyal to the provider and unlikely to switch to competitors -Resulting marketing challenges: Success depends on satisfying and keeping customers over the long term, generating repeat business is challenging, relationship marketing becomes critical

Customer service

Involves any human, mechanical, or electronic activity that adds value to the product.

Inventory Management

Involves developing and maintaining adequate assortments of products to meet customers needs. It is a key component of an effective physical distribution system

Physical Distribution

Known as logistics, refers to the activities used to move products from producers to consumers and other end users. Must meet the needs of both supply chain and customers

Distribution Centers

Large facilities used for receiving, warehousing and redistributing products to stores or customers. Designed for rapid flow of products

Public Warehouse

Lease storage space and related physical distribution facilities to other companies. Provide distribution services, such as receiving and unloading, inspecting and reshipping products. Useful to firms that have seasonal production or low volume storage needs, inventories in many location and testing new products.

Managing Existing Products

Line Extensions, Product Modifications, Quality Modifications, Functional Modifications, Aesthetic Modifications

Adoption Process 3- Evaluate

Look at different alternatives

Ubiquiti Networks

Makes wireless networking equipment, outsources its entire sales function. Maintain some of the highest profit margins in the industry

Possession Utility

Means that the customer has access to the product to use or to store for future use. Can occur through ownership or through arrangements

Marketing Intermediaries

Most channels that link producers to other intermediaries or to ultimate consumer through contractual arrangements or through the purchase and reselling of products

Adoption Process 1- Awareness

Not selling because people are not aware of the product

Breadth of Product Mix

Number of different Product Lines

Nonprofit marketing objectives

Obtain a desired response from a target market -The response could be a change in values, a financial contribution, the donation of services, etc. -Objectives shaped by the nature of exchange and the goals of the organization

Intermediaries

Offer producers greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operations, intermediaries usually offer the firm more than it can achieve on its own.

Independent Grocers' Alliance (IGA)

One of the best known wholesalers leaders in the United States. Its power is based on its expertise in advertising, pricing, and purchasing knowledge that it makes available to independent business owners.

Unit Loading

One or more boxes are placed on a pallet or skid, and can then be loaded efficiently by mechanical means such as forklifts, trucks.

Channel Captain "Channel Leader"

Organized and controlled by a single leader, which may be a producer, wholesaler or retailer. May establish channel policies and coordinate development of the marketing mix

Perceptual Mapping

Perceptual maps are created by questioning a sample of consumers about their perceptions of products, brands, and organizations with respect to two or more dimensions.

Materials Handling

Physical handling of tangible goods, supplies and resources, is an important factor in warehouse operations and transportation from points.

NPD Stage 5

Product Development -Actually developing the product

Roll-out

Products are not launched nationwide overnight but are introduced through a process. With roll-out, a product is introduced in stages, starting in one set of geographic areas and gradually expanding into adjacent areas.

Social marketing

Promotes social causes, such as AIDS research or recyling

Computerized order Processing

Provides a database for all supplychain members to increase their productivity

Channel conflict

Refers to disagreement over goals, roles, and rewards by channel members.(Horizontal conflict, vertical conflict)

Nonprofit marketing

Refers to marketing activities that are conducted by individuals and organizations to achieve some goal other than ordinary business goals like profit, market share, or ROI -Divided into 2 categories: nonprofit organization marketing and social marketing

Order Lead Time

Refers to the average time laps between placing the order and receiving it.

Inseparability of production and consumption

Refers to the fact that the production of a service cannot be separated from its consumption by customers -For instance, an airline flight is produced and consumed simultaneously, that is, services are produced, sold, and consumed at the same time -Customers often must be present at the production of a service (such as investment consulting or surgery) and cannot take the service home -Both the service provider and the customer must work together to provide and receive the service's full value -Because of inseparability, customers not only want a specific type of service but expect it to be provided in a specific way by a specific individual -Example: The production and consumption of a medical exam occur simultaneously, and the patient knows in advance who the physician and generally understands how the exam will be conducted -Inseparability implies a shared responsibility between the customer and the service provider

Commercialization

Refining and finalizing plans and budgets for full-scale manufacturing and marketing of a product

NPD Stage 2

Screening -Take bad ideas out

Concept testing

Seeking a sample of potential buyers' responses to a product idea

Idea generation

Seeking product ideas to achieve organizational objectives

Channel Management process

Selecting channel members, managing channel members, motivating channel members, evaluating channel members.

Screening

Selecting the ideas with the greatest potential for further review

Heterogeneity

Services delivered by people are susceptible to heterogeneity, or variation in quality -Usually increases as the degree of labor intensiveness increases -Auto repair, education, and hair-styling rely heavily on human labor -Resulting marketing challenges: service cannot be stored, balancing supply and demand is very difficult, unused capacity is lost forever, demand may be very time sensitive

Piggyback

Shipping that uses both truck trailers and railway flatcars

Birdyback

Shipping that uses truck trailers and air carriers

Fishyback

Shipping that uses truck trailers and water carriers

Intermediaries

Some services use them for distribution -Travel agents facilitate the delivery of airline services, independent insurance agents participate in the marketing of a variety of insurance policies, and financial planners market investment services

Freight Forwarders

Specialized outsourcing agencies provide organizations that consolidates shipments from several firms into efficient lot sizes. Small loads: 500 pounds Profits come from the margin between the higher, less than carload rates, they can speed delivery and determine the most efficient carriers and routes Ex: Fracht

Product Features

Specific design characteristics that allow a product to perform certain tasks

Just-In-Time (JIT)

Supplies arrive just as they are needed for use in production for resale. Maintain low inventory levels and purchase products and materials in small quantities Ex: Honda, Harley Davidson, Dell

Customer Relationship Management (CRM)

Systems that exploit the information from supply chain partners' information systems to help all channel members make marketing strategy decisions that develop and sustain desirable customer relationships

Search qualities

Tangible attributes that can be judged before the purchase of a product -Trying on a new coat and taking a car for a test drive

Although it has a strong customer base, Sato Japanese Restaurant rarely attracts customers by methods other than word-of-mouth communication. The manager believes this can be explained by the restaurant's location in a rough area in the city and its run-down appearance. In other words, potential customers are most concerned about

Tangibles

Setting channel objectives

Targeted levels of customer service, balance customer needs not only against the feasibility and costs of meeting these needs but also against customer price preferences.

NPD Stage 6

Test Marketing -Finding a representative community, such as Peoria Illinois, to introduce the product for a short time

Adoption Process 4- Trial

Test product to see quality -Ex. trying different cheeses

Safety Stock

The amount of extra inventory a firm keeps to guard against stock outs resulting from above average usage rate/ longer than expected lead times

Level of quality

The amount of quality a product possesses.

Immediate Drop

The best strategy when losses are very great

Containerization

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

Consistency of quality

The degree to which a product has the same level of quality over time.

Warehousing

The design and operation of facilities for storing and moving goods. Provides time utility by enabling firms to compensate for dissimilar production and consumption rates. Also helps stabilize prices and the availability of seasonal items.

Value delivery network

The firm's suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system.

Adoption Categories- Innovators

The first to buy the new product -Typically younger and well-educated, cosmopolitan and more money

Trade Name

The full legal name of an organization

Adoption Categories -Laggards

The last 15% to adopt -are orientated toward the past

Contractual VMS

The most popular type of vertical marketing system, channel members are linked by legal agreements spelling out each members rights and obligations. Ex: Franchising organization; McDonalds, Wholesalers-sponsored groups, such as IGA and Retailer sponsored groups

Transportation

The movement of products from where they are made to intermediaries and end users. This is the most expensive physical distribution function. 10% are freight charges

Adoption Categories -Early Adopters

The next 13.5% -Tend to be younger an wealthier -uses sales force more than any other group

Adoption Categories -Late Majority

The next 34% -Older, more conservative -Reach them by targeting their children

Adoption Categories -Early Majority

The next 34% -Uses mass media more than any other group

Intensity of Coverage that a product gets

The number and kinds of outlets in which it will be sold, which depends on the characteristics of the product and target market. This must correspond to behavior patterns of buyers.

Depth of Product Mix

The number of items within each product line

Quality

The overall characteristics of a product that allow it to perform as expected in satisfying customer needs

Product Differentiation

The process of creating and designing products so customers perceive them as different from competing products Customer perception is critical in differentiating products Perceived differences include Quality, Features, Styling, Price, Image

Product Deletion

The process of deleting a product from the product mix when it no longer satisfies a sufficient number of customers

Direct Marketing Channels

The product goes directly from the producer to the customer

Usage Rate

The rate at which a products inventory is used or sold during a specific time period

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.

Product Mix

The total set of products a company sells

Perishability

The unused service capacity of one time period cannot be stored for future use -Empty seats on an airline flight today cannot be stored and sold to passengers at a later date, unsold basketball tickets, unscheduled dentists' appointment times, and empty hotel rooms -Goods are generally less perishable than services -Resulting marketing challenges: service provider cannot mass-produce services, customer must participate in production, other consumers affect service outcomes, services are difficult to distribtue

Dual Distribution

The use of 2 or more marketing channels to distribute the same products to the same target market but can cause dissatisfaction among wholesalers and smaller retailers when they must compete with large retail grocery chains

Nonprofit organization marketing

The use of marketing concepts and techniques by organizations whose goals do not include making profits

Opportunity cost

The value of the benefit given up by selecting one alternative over another -If a nonprofit organization persuades someone to donate time to a cause or ta change his or her behavior, the alternatives given up are a cost to (or a price paid by) the individual -Example: Volunteers give up the time they could spend studying or doing other things as the income they might earn from working at a for-profit business organization

Reseller's Brand

The wholesaler or retailer

Channel Power

To attain desired objectives, the captain must possess the ability to influence another channel members goal achievements.

Reorder Point

To determine when to order, marketers calculate _____, which is the inventory level that signals the need to place a new order

RFID

Track materials through radio waves and improve the tracking of shipments and reduces cycle time. Half of all US retailers utilize this.

Suppliers Partnership for the Environment

U.S. auto industry partnered with Environmental Protection Agency, which is a forum for companies and their supply chain partners to share environmental practices and optimize supply chain productivity Improve productivity and help reduce waste and pollution

Intensive Distribution

Use all available outlets for distributing a product. Is appropriate for most convince products like bread, chewing gum, soft drinks, coke, pringles and newspaper. Available in many retail outlets

Manual Processing

Used for small value orders and are more flexible in certain situations

Electronic Data Interchange (EDI)

Uses compute technology to integrate order processing with production, inventory, accounting and transportation. Also functions as an information system that links marketing channel members and outsourcing firms together

Target public

We must revise the concept of target markets slightly to apply it to nonprofit organizations -Whereas a business seeks out target groups that are potential purchases of its product, a nonprofit organization may attempt to serve many diverse groups -Target public: a collective of individuals who have an INTEREST in or a CONCERN about an organization, a product, or a social issue

Individual Branding

What Proctor and Gamble does -Problem with the product doesn't hurt the whole line -Tide, Crest, Downy

Unit Loading Containerization

What are 2 common methods used in materials handling?

Speed of Delivery Flexibility Quality of Service

What are 3 important costs to customers.

1. Stabilize Supply 2. Reduce Cost 3. Increase coordination

What are 3 results of channel integration

Time Place Possession Form

What are 4 types of utility?

Dual Distribution Restricted Sales Territories Tying Agreements Exclusive Dealing Refusal to Deal

What are 5 examples of legal issues in channel management?

Railroads Trucks Waterways Airways Pipelines

What are 5 most common transportation modes for moving physical goods?

1. Competitive Priorities 2. Channel Leadership 3. Cooperation 4. Management of Channel Conflict 5. Consolidation of Marketing Channel

What are 5 strategic focuses on marketing channels?

Marketing Information Marketing Management Facilitating Exchanges Promotion Price Physical Distribution

What are 6 examples of activities in Marketing Intermediaries?

1. Customer Characteristics 2. Product Attributes 3. Type of Organization 4. Competition 5. Marketing Environmental Forces 6. Characteristics of Intermediaries

What are 6 factors that affect the channel selection decisions?

Order Entry Order Handling Order Delivery

What are the 3 main tasks for order processing?

Intensive Distribution Selective Distribution Exclusive Distribution

What are the 3 major levels of market coverage?

1. Connivence of Products 2. Shopping Products 3. Specialty Products 4. Unsought Products

What are the 4 categories of Consumer Products?

1. Account Replacement Rate 2. Product Adjustment 3. Duration of Consumption 4. Time Required to find the product 5. Similar Factors

What are the 5 ways to consider products for purchase? Which directly affect the intensity of market coverage.

Customer Satisfaction

What is the driving force behind marketing channel decisions?

Stock Outs

When too few products are carried in inventory "Shortage" can cause brand switching, lower sales and loss of customers

target public

a collective of individuals who have an interest in or concern about an organization, a product, or a social cause

Transportation

affects the pricing of products, delivery performance, and condition of the goods when they arive. (Truck, rail, water, pipeline, air, internet)

service

an intangible product involving a deed, a performance, or an effort which cannot be physically possessed, usually provided through the application of human and/or mechanical efforts directed at people or objects

Horizontal marketing systems

are when two or more companies at one level join together to follow a new marketing oppertunity. Companies combine financial production, or marketing resources to accomplish more than any one company could do.

credence qualities

attributes that consumers are unable to evaluate even after purchasing and consuming a service because of lack of knowledge or skill

Line Extension

closely related to existing products in the line designed to meet different customer needs Many "new products" are really these Are less expensive, lower-risk and more common than new products

Marketing Channel

consists of firms that have partnered for their common good with each member playing a specialized role.

Contractual Vertical marketing system

consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact than each could achieve alone. The most common form is the franchise organization.

Any human or mechanical effort that adds value to a product is called

customer service

service quality

customers' perception of how well a service meets or exceeds their expectations; marketers are thus forced to examine quality from the customer's POV

Quality Modifications

dependability and durability Reducing a product's quality may allow for a lower price and appeal to a new target market Higher quality may allow a company to charge a higher price through building loyalty and lowering sensitivity to price Many firms look for ways to increase quality while also cutting costs

Prudential Insurance uses "the rock" symbol to communicate stability and security to customers. This is Prudential's attempt to help customers better understand its services by

emphasizing tangible cues in promoting the service.

Developing New Products

enhance a firm's product mix and add depth to a product line "New" can mean: Innovative benefits, Different and better than existing products, Never been sold by any organization before, Never been sold by a particular firm or in a market before

Administered VMSs

has a few dominant channel members without common ownership. Leadership comes from size and power.

The fact that the first massage Gretchen gives each day is better than the last massage demonstrates

heterogeneity

Downstream Partners

include the marketing channels or distribution channels that look toward the customer.

nonprofit marketing

includes marketing activities conducted by individuals and organizations to achieve some goal other than ordinary business goals of profit, market share, or return on investment.

Corporate Vertical marketing systems

integrates successive stages of production and distribution under single leadership.

Logistics information management

is the management of the flow of information, including customer orders, billing inventory levels, and customer data. (EDI-electronic data interchange), (VMI-vendor-managed inventory_

Integrated logistics management

is the recognition that providing customer service and trimming distribution costs requires teamwork internally and externally.

Franchise organization

links several stages in the production distribution process. (Manufacturer-sponsored retailer franchise system, Manufacturer-sponsored wholesaler franchise system, service firm-sponsored retailer franchise system.

Marketing channels of services usually are:

short and direct, meaning the producer delivers the service directly to the end user

characteristics of services

six distinguishing characteristic that differentiate services from goods- intangibility, inseparability, perishability, heterogeneity, client-based relationships, and customer contact

supplementary service

supportive service related to the core service that is used to differentiate the service bundle from competitors

search qualities

tangible attributes that can be evaluated before the purchase... all goods possess them

core service

the basic service experience or commodity a customer expects to receive

customer contact

the level of interaction between the provider and the customer needed to deliver the service. varies depending on the service.

Supply chain management

the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, re-sellers, and final consumers.

perishability

the unused service capacity from one time period cannot be stored for future use. service providers and marketers cannot handle supply-demand problems through production scheduling and inventory techniques. service providers can plan for demand that fluctuates according to day of week/time of day/season

opportunity cost

the value of the benefit given up by selecting one alternative over another, which applies to the time donated to a nonprofit

Distribution for nonprofit organizations is

typically characterized by short channels.

heterogeneity

variation in quality- harder to control with services. variations occur among organizations, within organizations, even with the same person. this increases as degree of labor-intensiveness increases because services are people-based and susceptible to fluctuations in quality

Multichannel Distribtuon systems (Hybrid marketing channels) .

when a single firm sets up two or more marketing channels to reach one or more customer segments

exclusive territorial agreements

when producer or seller limit territory

Exclusive Distribution

when seller allows only certain outlets to carry its product

Exclusive dealing

when seller requires that the sellers not handle competitors products