Ch 15 MKTG
information sharing
_____ has reduced costs and increased speed, flexibility and cooperation
intermediaries
_____ provide valuable assistance because of their access to and control over important resources used in the proper functioning of marketing channels
10
_____% of companies total expenses are freight charges
industrial distributors
______ are used when product has broad market appeal, is easily stocked and serviced, is sold in small quantities, and is needed on demand to avoid high losses
technology
______ has improved supply chain management capabilities on a global basis
efficient materials handling
_______ can reduce costs, the number of times a good is handled, improve customer service and increase customer satisfaction
large size
_______ in horizontal channel integration may decrease flexibility, increase coordination problems and require additional research and planning
reducing cycle time while reducing costs
a winning combo in supply chains and ultimately leads to greater customer satisfaction?
channel power
ability of one channel member to influence another member's goal achievement; channel captain must possess this
channel management
all activities related to selling,service and the development of long term customer relationships
just in time (JIT)
an inventory management approach in which supplies arrive just when needed for production or resale; maintain low inventory, no safety stock; requires high coordination; ex: Chrysler, Harley Davidson, Dell Compouter
marketing information activity performed by intermediaries
analyze sales data and other information in databases and information systems. Perform or commission marketing research
administered VMS
channel members are independent but a high level of interorganizational management is achieved through informal coordination; may adopt uniform accounting or ordering procedures; ex: Intel, Kellogg, Magnavox have influence over distributors and manufacturers
containerization
consolidation of many items into single large container that is sealed at its point of origin and opened at its destination
outsourcing
contracting of physical distribution tasks to third parties
warehousing
design and operation of facilities for storing and moving goods
inventory management
developing and maintaining adequate assortments of products to meet customer's needs
Producer to Consumer
direct movement of products from producer to consumers; ex:Omaha Steaks
environmental forces
economic conditions, new technologies, government regulations have effects on what channel to use
ebay
example of marketing intermediary between Internet sellers and buyers
walmart, toyota, jcpenny
experts at logistics
customer relationship management
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
safety stock
extra inventory a firm keeps
channel partnerships
facilitate effective supply chain management when partners agree on objectives, policies and procedures for physical distribution efforts associated with the supplier's products; eliminate redundancies and reassign tasks for maximum systemwide efficiency
marketing mix
marketing channel decisions are a powerful influence on the rest of the ___________
long term commitments
marketing channel decisions are generally ________, that are difficult to change or undo
exchange efficiencies
marketing channels facilitiate _______
activities performed by marketing intermediaries
marketing information, marketing management, facilitating exchanges, promotion, price, physical distribution
marketing intermediaries
middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products; play key roles in customer relationship management
unit loading
one or more boxes are placed on a pallet or skid; these units can be loaded by forklifts, etc
operations management
organizational and systemwide coordination of operations and partnerships to meet customers product needs
freight forwarders
organizations that consolidate shipments from several firms into efficient lot sizes
materials handling
physical handling of tangible goods, supplies and resources; involves transportation from points of production to points of consumption
refusal to deal
producers have right to choose channel members they will do business with; but may not refuse to deal with wholesalers or dealers because these wholesalers or dealers resist policies that are anticompetitive
strategic channel alliance
products of one organization are distributed through the marketing channels of another; products of two firms are often similar; bottled water might be distributed through marketing channel for soft drink
radio frequency id
radio waves are used to track materials using scanners; used by Daisy dairy brand
usage rate
rate at which a product's inventory is used or sold during a specific time period
piggyback
shipping uses both truck trailers and railway flat cars
order entry, order handling, order delivery
three main tasks of order processing
cycle time
time needed to complete a process
marketing channel utilities
time utility, place utility, possession utility, form utility
behavior patterns of buyers
to achieve desired intensity of market coverage, distribution must correspond to ______
45%
transportation is what percentage of total distribution costs
exclusive distribution
using a single outlet in a fairly large geographic area to distribute a product; for specialty products purchased infrequently, consumed over a long period of time, or requiring service and information; only authorized dealers are used; ex: BMW dealers
intensive distribution
using all available outlets to distribute a product; for most convenience products, multiple channels may be used; ex: Gum, Coke
dual distribution
using two or more marketing channels to distribute same products to same target market; runs the risk of being viewed as anticompetitive;
stabilize prices and avaliability of seasonal items
warehousing helps _____
22%
warehousing is what percentage of total distribution costs
trucks
what provide the most flexible schedules and routes of all transportation modes?
channels for consumer products
Producer to Consumers; Producer to Retailers to Consumers; Producer to Wholesalers to Retailers to Consumers; Producer to Agents or brokers to Wholesalers to Retailers to Consumers
channels for business products
Producer to Organizational Buyers; Producer to Industrial Distributors to Organizational Buyers; Producer to Agents to Organizational Buyers; Producer to Agents to Industrial Distributors to Organizational Buyers
long channel
a ________ may be the most efficient distribution channel for some consumer goods
vertical marketing systems (VMSs)
a marketing channel managed by a single channel member to achieve efficient, low cost distribution aimed at satisfying target market customers; takes on corporate, administered or contractual forms
unified supply chain, common objectives
a marketing channel should be viewed as a _________; members should work toward ______
3%
administration is what percentage of total distribution costs
tying agreement
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
logistics management
all activities designed to move the product through the marketing channel to the end user, including warehousing and inventory management
supply chain
all the activities associated with the flow and transformation of products from raw materials through to the end customer
physical distribution
also known as logistics, refers to the activities used to move products from producers to consumers and other end users
functions
although wholesalers can be eliminated, their _____ cannot; other channel members must still perform functions and customers still have to pay for them to be done
bonded storage
an arrangement in which imported or taxable products are not released until the products' owners pay US customs, duties, taxes or other fees; enable firms to defer tax payments until they are delivered to customers
order lead time
average time lapse between placing the order and receiving it
product's market presence and buyer's accessibility to the product
channel decisions determine ________
wholesalers
channel leadership roles of _____ were more powerful decades ago
clearly defined
channel member tasks must be ______
waterways
cheapest method of shipping heavy low value goods
facilitating exchanges activity performed by intermediaries
choose product assortments that match the needs of customers. cooperate with channel members to develop partnerships
corporate VMS
combines all stages of marketing channel, from producers to consumers, under a single owner
horizontal channel integration
combining organizations at the same level of operation under one management; ex: owner of dry cleaning firm may buy other dry cleaning establishments
vertical channel integration
combining two or more stages of the marketing channel under one management; effective against competition because of increased bargaining power and shared information and responsibilities
characteristics of intermediaries
companies may choose other intermediaries to better promote their product
private warehouse
company operated facilities for storing and shipping products
strategic issues in marketing channels
competitive priorities; channel integration; channel leadership, coordination and conflict
electronic data interchange (EDI)
computerized means of integrating order processing with production, inventory, accounting and transportation
accept tying arrangements
courts only _________ when supplier is the only one able to provide products of a certain quality and the intermediary can also carry competing products
inefficient and parasitic
critics accuse wholesalers of being ______
factors affecting the selection of a marketing channel
customer characteristics, product attributes, type of organization, competition, marketing environmental forces, characteristics of intermediaries
6%
customer service is what percentage of distribution costs
possession utility
customers have access to the product to use now or store for future use; ex: lease or rental
distribution
decisions and activities that make products available to customers when and where they want to purchase them
raises costs in another area
decreasing costs in one area often ___
P&G and Walmart
effect partnership between 2 companies
organizational success
effective marketing channels required for ______
marketing orientation
effective supply chain management is linked to a _______
market orientation
effective supply chain managment is closely linked to ______
product flow
efficient order processing facilitates ___
channel cooperation
enables retailers, wholesalers, suppliers and logistics providers to speed up inventory replenishment, improve customer service, and cut costs of bringing products to the consumer
price activity performed by intermediaries
establish pricing policies and terms of sale
marketing management activity performed by intermediaries
establish strategic and tactical plans for developing customer relationships and organizational productivity
customer characteristics
ex: businesses buy in larger quantities and more complex products while consumers buy limited quantities and are more direct
type of organization
ex: larger firms may be able to negotiate better with other channel members; small firms may need more distribution centers to reduce delivery time
product attributes
ex: more complex and expensive products such as cars and perishable products like dairy employ short channels; less expensive more standardized products like soft drinks and canned goods can employ longer channels
air transportation
fastest but most expensive form of shipping; used for perishables, high value, low bulk, and emergency shipments
wholesalers and retailers
firms downstream in supply chain
competition
firms may be forced to adopt a strategy to stay competitive
suppliers
firms upstream in supply chain
form utility
formed by assembling, preparing or otherwise refining the product to suit customer needs; ex: assembling cut flowers
megacarriers
freight transportation firms that provide several models of shipments
field public warehouses
furnish security for products that are used as collateral for loans
Producer to Agents or brokers to Wholesalers to Retailers to Consumers
goods pass from producer to agents to wholesalers to retailers and then to consumers; used for mass distribution products such as processed foods
marketing channel
group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
time utility
having products available when the customer wants them; ex: movies on demand
economies of scale
horizontal channel integration creates ______
improving distribution
horizontal channel integration is not the best method for _________
direct channels
in contrast to consumer goods more than half of all business products are sold through _________
industrial distributor
independent business organization that takes title to industrial products and carries inventories; usually sell standardized items
manufacturer's agent
independent business person who sells complementary products of several producers in assigned territories and is compensated through commissions; acts as salesperson on behalf of producers; has little negotiating power
cost to manufacturer; financial burden
industrial distributors can perform at low ______ and reduce producer's
standardized items
industrial distributors usually sell
technology
information ______ has created almost seamless distribution processes
characteristics of product and target market
intensity of coverage depends on _______
24%
inventory carrying is what percentage of total distribution costs
reorder point
inventory level that signals the need to place a new order
operations management, supply management, logistics management, channel management
key tasks in supply chain management
distribution centers
large facilities used for receiving, warehousing, and redistributing products to stores or customers; designed for rapid flow of products; usually one story;
Producer to Wholesalers to Retailers to Consumers
longstanding distribution channel; goods from producer to wholesaler then to retailer and finally to customers; practical for producers that sell to hundreds of thousands of customers through thousands of retailers; ex: Wrigley's chewing gum
place utility
making products available in locations where customers wish to purchase them; ex: bowling ally with sock vending machine
physical distribution activity performed by intermediaries
manage transportation, warehousing, materials handling, inventory control and communication
managing supply chains
management of upstream and downstream activities is involved with
restricted sales territories
manufacturers may try to prohibit intermediaries from selling its products outside of designated sale areas; considered a restraint of trade among intermediaries handling the same brands; promotes competition among dealers handling different brands
pipelines
most automated transportation mode
contractual VMS
most popular type of vertical marketing system; channel members are linked by legal agreements spelling out each member's rights and obligations; ex: franchises such as McDonalds and KFC are this
transportation
movement of products from where they are made to intermediaries and end users; the most expensive physical distribution function
Producer to Retailer to Consumer
moves goods from producer to retailer to consumer; frequent choice of large retailers because allows them to buy in quantity from manufacturers; ex: J Crew, LL Bean, textbooks
intensity of coverage
number and kinds of outlets in which the product will be sold; depends on characteristics of product and target market
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 customer's needs and wants
order processing
receipt and transmission of sales order information
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
goals of physical distribution
right goods, right place, right price, right time, right quantity, right support system, cycle time
supply chain management
set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities to the right locations and at the right time
promotion activity performed by intermediaries
set promotional objectives. coordinate advertising, personal selling, sales promotion, publicity, and packaging
stockouts
shortages of products that can result in loss of customers, lower sales, brand switching
exclusive dealing
situation in which a manufacturer forbids an intermediary to carry products of competing manufacturers; three tests: if blocks competitors from 15% of market, if sales volume is large and if producer is larger than retailer than it is anticompetitive
supply management
sourcing of necessary resources, products, and services from suppliers to support all supply chain members
public warehouse
storage space and related physical distribution facilities that can be leased by companies
competitive advantage
supply chains can provide a _______ ;ex: Dell, Amazon, Toyota, WalMart
service
technology has improved _______; increasing the number of innovative goods and the involvement of firms in management supply chain
channel captain
the dominant leader of a marketing channel or a supply channel; may be a producer, wholesaler, or retailer; establish channel policies and coordinate development of marketing mix; ex: Walmart
providing customer satisfaction
the driving force behind marketing channel decisions
major role of marketing channels
to make products available at the right time at the right place in the right quantities
operations management
total set of managerial activities used by an organization to transform resource inputs into products
birdyback
truck trailers and air carriers
fishyback
truck trailers and water carriers
intermodal transportation
two or more transportation modes used in combination
private and public
two types of warehousing
acquire title or take possession of the products
unlike the industrial distributor, the manufacturer's agent does not ______
dual distribution
use of two or more marketing channels to distribute the same products to the same target market; ex: Kelloggs sells directly to retail chains who sell to the customer, as well as to wholesalers who then sell to retail chains and then the customer; firms who sell directly from their own website and from retailers
selective distribution
uses only some available outlets in an area to distribute a product; for shopping products, desirable when a special effort such as customer service is important to customers; ex: tvs, stereos, computers
large geographic area; highly seasonal demand
using a manufacturers' agent and an industrial distributor would be appropriate when producer wishes to cover a ________
channel conflict occurs
when: self interest creates misunderstanding about role expectations of channel members; communication is poor between channel members; increased use of multiple channels has increased the chance for miscommunication and conflict
intermediaries
who are the specialists in facilitating exchanges?
