mktg 409 Exam 4 (Marketing Channels)

Strategic Issues in Marketing Channels

-Competitive Priorities -Channel Integration -Channel Leadership, Coordination, and Conflict

Marketing information

Analyze sales data and other information in databases and information systems. Perform or commission marketing research.

Channel Conflicts:

Can cause: Self-interest of members Poor communication use of multiple channels

Facilitating exchanges

Choose product assortments that match the needs of customers. Cooperate with channel members to develop partnerships.

Supply-Chain Management

Coordination of all activities involved with the flow and transformation of supplies, products, and information through the supply chain to ultimate consumers. •Integrating functions •Right quantities •Right locations •Right times

Question: Does eliminating the middle man cut costs?

Depends, does not matter how many middle man you have, the activities of logistics from manufacturer to end consumer must still be done by someone.

Inventory Management

Developing and maintaining adequate assortments of products Stock outs: shortages of products Reorder point: Inventory level Lead time: Time between placing the order and receiving it Usage rate: the rate at which inventory is used/sold Safety stock: the extra inventory a firm keeps JIT: just in time system SKU: stock keeping unit (bluebell: one bown label icecream, and one gold label icecream)

Warehouse Robots Video

How it all works: inventory items, Idetifying target pod: match the station with robot. Fetch, Tunneling the robot. Highway driving, Crossing over, and arrive in time for the queue next pick. returning to storage.

Marketing Intermediaries

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

Materials Handling

The physical handling of tangible goods, supplies, and resources. Radio Frequency ID (RFID) Tracks materials using scanners

Channels Create utility

Time Utility: When Possession Utility: How access Place Utility: Where Form Utility: In what format

Proportional cost of components

Transportation 45% Inventory carrying 24% Warehousing 22% Customer service/order entry 6% Administration 3%

What is a primary difference between an industrial distributor and a manufacturers' agent?

a. A manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does.

A goal of logistics is to reduce ____ or how long it takes to complete a process.

cycle time

_______ involves developing and maintaining adequate assortments of products to meet customers' needs.

d. Inventory management

Cassy and James both are buying new iPhones this week. Cassy goes to the Apple store because she wants to actually see the phone before she makes a final decision. James knows that he does not need to see the phone, because he just wants an upgrade from his older version. He simply orders it online from apple.com. Cassy is purchasing her phone through _____, while James is purchasing his through _____.

d. a retailer; a direct-marketing channel

Tesco is a large U.K. supermarket. The firm's supply chain operates using a number of _______ to receive, store, and redistribute its many goods. Two of these facilities are used for frozen food. Many of the facilities are designed for the rapid flow of food products. They use automation such as forklifts and hoists to collect and move products to loading docks.

d. distribution centers

The Significance of Marketing Channels entail long-term commitments

difficult to change/undo marketing channel decisions

When Bud Light Orange beer was introduced as part of the Anheuser-Busch product line, the company most likely used ____ distribution.

intensive

Intensity of Market Coverage

intensive distribution (convenience products, such as coca-cola, pringles, and Duracell batteries, available in many retail outlets), selective distribution (shopping products, such as iphones, televisions, smartwatches, and shoes, available in some outlets), exclusive distribution (specialty products, such as haute couture, montlbanc pens, BMWs, and Fendi handbags, available in very few outlets)

Logistics

manage transportation, warehousing, material handling, inventory control, and communication.

Channel alliance

members cooperate to distribute each other's products.

Procurement

processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information

When Jennifer buys organic produce for her household using a channel with just one intermediary, that intermediary is classified as a

retailer

Goals of physical distribution

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

Channel Leadership Channel Captain

the dominant leader of a marketing channel or a supply chain; may be a producer, wholesaler, or retailer

Exchange Efficiencies

4 x 4 or 16 transactions or intermediary, which producers sell to retailers to consumes

Channel Integration

Combines two or more stages of marketing channel under one management Can be vertical or horizontal

Legal Issues in channel Management

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

Channel Cooperation

Enables retailers, wholesalers, suppliers, and logistics providers to: •Speed up inventory replenishment •Improve customer service •Reduce costs

Multiple Marketing Channels Video

Farmer's Insurance Continuation of the strategy since 2006, strategy and vision, and it is vital to our business. Past 8 years, made 3 acquisitions. Starts with customers, and how they want to be approached. Present themselves different ways to maximize customer reach. Matter of customers and how they should be approached.

Logistics management

Mangaging the efficient and effective flow of materials, products, and information from the point of origin to consumption

Marketing Channel

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

Warehousing and transportation

amazion "get It today" locations where you can get items at a flat rate the same day you order them.

A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances?

b. When the marketer wishes to enter a new geographic market but does not wish to expand the existing sales force

When a single channel member manages an integrated marketing channel to achieve low-cost, effective distribution for satisfying target markets, ____ exists.

b. a vertical marketing system

Because of the significant investment many companies have in the products they sell to customers, they must develop and maintain adequate varieties of products to meet their customers' needs. This is called

b. inventory management.

Emerging technologies

cloud cognitive services Digital assistants: siri, alexa Bots Speech recognition. Robotic tasks, tell a business customer where an order is.

horizontal channel integration

combining organizations at the same level of operation under one management (dr. pepper acquired snapple) (at&t to cricket)

Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping through

containerization

The driving force behind marketing channel decisions should be

customer satisfaction

Channel management

direction the flow of products

Companies that sell products with high profit margins are more likely to use _______. Companies selling products whose sales are directly related to product availability will most likely use _______.

e. exclusive distribution; intensive distribution

Eliminating a wholesaler from a marketing channel will

e. not eliminate the functions performed by that wholesaler.

price

establish pricing policies and terms of sales.

Marketing management

establish strategic and tactical plans for developing customer relationships and organizational productivity

Aaron Whitley's company buys machine tools from large producers and sells them to several Midwestern manufacturing companies. The company Aaron works for carries inventories of the tools, which reduces capital requirements for the producers. Aaron's company is an example of a(n) ____ in a distribution channel.

industrial distributor

operations management

managing activities from production to final delivery through system-wide coordination

Assuming everything else is equal, the most cost-efficient way for ConocoPhillips to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be

pipelines

Promotion

set promotional objectives. Coordinate advertising, personal selling, sales promotion, publicity, and packaging.

Marketing Channel Selection

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

The Significance of Marketing Channels Channel decisions determine:

A product's market presence Buyer's accessibility to the product

Key Supply Chain Management Issues

Technology •Seamless distribution processes •Reduced costs •Increased speed, flexibility, cooperation •Improved service •More innovative goods •Increased cooperation Linked to market orientation

Suppose that Faust Distributing has been told that it cannot carry the beers made by Anheuser-Busch because it also carries the products of the competitor, Miller Brewing Company. Faust is then told that it must drop the Miller brands in order to carry the Anheuser-Busch products. If this were true, Anheuser-Busch would be engaging in which of the following channel management practices?

a. Exclusive dealing

Which of the following is an advantage of using an industrial distributor?

a. Inventory holding costs are minimized because they can store inventory very cheaply. b. These firms are easy to control because they work directly for the producers. c. They are closer geographically to all of the producers' customers. d. They possess a high level of technical knowledge about their products. e. They help reduce a producer's financial burdens by extending credit to customers.

For which of the following products would exclusive distribution be most appropriate?

a. Ray-Ban sunglasses b. Rolls Royce automobile c. Gasoline d. Bananas e. Harley-Davidson motorcycle

When produce companies such as Dole Bananas bypass wholesalers and sell directly to retailers, it is likely to

a. increase the vertical integration of the channel intermediaries. b. show that Dole is integrating its channel intermediaries. c. create horizontal integration between channel members. d. increase cooperation between Dole and the wholesalers. e. create channel conflict between Dole and these wholesalers.

The notion of logistics is

a. the activities used to move products from producers to end users.

Multichannel distribution is characterized as

a. the use of a variety of marketing channels to ensure maximum distribution.

Channel Power

ability to influence another channel member's goal achievement

Disney sells apparel, cookie jars, puzzles, photo albums, and other items featuring its popular characters directly through its own retail outlets. This is an example of

b. vertical channel integration.

Vertical channel integration

c. is made possible by purchasing the operations of a channel member.

The main reason a manufacturer will prohibit intermediaries from selling its products outside designated sales territories is to

c. tighten its control over distribution of its products.

Vertical Channel Integration

combining stages at different levels of the channel under one management Backward integration (when a channel member acquires another channel member, or directly takes over our managers channels activities affects supply chain) Forward integration (when a channel member takes over the activities that are down the supply chain closer to the retailer, ex. heb (backward vertical integration)