Chapter 14 - Distribution Decisions
exclusive dealing
A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers
Restricted Sales Territories Tying Agreements Exclusive Dealing Refusal to Deal
Channel management practices frequently subject to legal restraint include:
recycling
Converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products
more dominant
Current marketing traditions have allowed retailers to become ...
shorter
For Organizational (Business to Business) Markets, Channels Tend to Be
producers
Making quantities Limited assortment Customers Tiny Q Vast Variety 2 Mismatches
time, rental, exchange
Marketing channels serve many functions. They create _______, place, and possession utilities by making products available when and where customers want them Providing customers with access to product use through sale or ________ Marketing intermediaries facilitate __________ efficiencies, often reducing the costs of exchanges by performing certain services and functions
wholesaler
Middleman whose customers are business
retailer
Middleman whose customers are people or consumers
place
Often misunderstood Taken for granted About half of marketing costs Least flexible of the four Ps
customer, product, environmental
Selecting an appropriate marketing channel is a crucial decision for supply chain managers. To determine which channel is most appropriate to use, managers must think about: _____________ characteristics ____________ attributes Type of Organization Competition _____________ forces Characteristics of Intermediaries
distribution
The _____________________ components of the marketing mix focuses on the decisions and activities involved in making products available to customers when and where they want to purchase them.
purchasing
The act of negotiating and executing transactions to buy and sell goods, materials, and services
keep the large customers for themselves
The bigger the customers, the more the manufacturers have more of an incentive to..
warehousing
The design and operation of facilities for storing and moving goods
multichannel distribution
The use of a variation of marketing channels to ensure maximum distribution Increasingly used to reach target customers wherever and whenever they may chose to interact with a company or its products
wholesalers
They buy and resell products to other wholesalers, retailers, and business customers
radio frequency identification
Using tags and readers that use radio waves to identify and track tagged materials
manufacturers
Which one, Wholesalers, retailers, or manufacturers had more dominance in the civil war period?
wholesalers
Which one, Wholesalers, retailers, or manufacturers had more dominance in the revolutionary period?
third party logistics firms
have special expertise in core logistics activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently.
inventory management
involves developing and maintaining adequate assortments of products to meet customers' needs.
logistics management
involves planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and information from the point of origin to consumption in order to meet customers' needs and wants
logistics
involving physical distribution, relates to planning, implementing, and controlling the effectivie flow and storage of products.
selective distribution
only some outlets in an area are chosen to distribute a product.
intensive distribution
producers strive to make a product available to all possible dealers.
retailers
purchase products and resell them to ultimate consumers
supply chain management
refers to coordination of all the activities involved with the flow and transformation of supplies, products, and information through the supply chain the ultimate consumers. Integrates the functions of operations management, logistics, procurement, and marketing channel management so that goods and services are produced and distributed in the right: Quantities Locations Time
procurement
refers to the processes that enable the progress of value from raw material to final customer and back to redesign and final disposition.
electronic data interchange
A computerized means of integrating order processing with production, inventory, accounting, and transportation
tying agreements
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
costs, customer satisfaction
An efficient logistics systems is an important component of an overall marketing strategy because it can decrease ___________ and increase ________ _____________
just in time
An inventory management approach in which supplies arrive just when needed for production or resale
vertical integration
Combines two or more stages of the marketing channel under one management
direct distribution channels
Commonly used in marketing Also used are channels containing industrial distributors, manufacturers' agents, and a combination of agents and distributors
private warehouses
Company operated facilities for storing and shipping their own products
digital distribution
Delivering content through the internet to a computer or other device It is important to recognize that the line between different marketing channels is becoming increasingly blurred
inventory management
Developing and maintaining adequate assortments of products to meet customers' needs
channel captain
Each channel member performs a different role in the system and agrees to accept certain rights, responsibilities, rewards, and sanctions for nonconformance. Although many marketing channels are determined by consensus, some are organized and controlled by a single leader, or ...
transit
Efficient logistics systems can decrease costs and __________ time while increasing customer service
megacarriers
Freight transportation firms that provide several modes of shipment
retailers and wholesalers
In most channels of distribution, producers and consumers are linked by marketing intermediaries Two types are:
distribution center
Large, centralized warehouses hat focus on moving rather than storing goods
freight forwarders
Organizations that consolidate shipments from several firms into efficient lot sizes
materials handling
Physical handling of tangible goods, supplies, and resources
public warehouses
Storage space and related logistics facilities that can be leased by companies
true
T or F: Channels of distribution are broadly classified as channels for consumer products and channels for business products Within these two categories, different channels are used for different products
true
T or F: Distribution of business products differs from that of consumer products in the types of channels used
true
T or F: Federal, state, and local laws regulate channel managers to protect competition and free trade. Courts may prohibit or permit a practice depending on whether it violates this underlying principle.
true
T or F: Logistics managers must strive to find the optimal level of inventory to satisfy customers needs while keeping costs down. Materials handling the physical handling of products is a crucial element in warehousing and transporting products
true
T or F: Most producers have multichannel distribution systems that can be adjusted for various target markets
channel captain
The dominant leader of a marketing channel or a supply channel A marketing channel functions most effectively when members cooperate. When they deviate from their roles, channel conflict can arise
transportation
The movement of products from where they are made to intermediaries and end users
sourcing
The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity
order processing
The receipt and transmission of sales order information
intermodal transportation
Two or more transportation modes used in combination
intensive distribution
Using all available outlets to distribute a product A marketing channel is managed such that products receive appropriate market coverage.
illegal
When these practices strengthen weak competitors or increase competition among dealers, they may be permitted. In most other cases, when competition may be weakened considerably, they are deemed ........
retailers
Which one, Wholesalers, retailers, or manufacturers has more dominance in the current market?
Middlemen can often perform functions more efficeintly
Why Not Just Eliminate Middlemen?
larger quantity and at a lower cost
Why Not Just Eliminate Middlemen? Number of transactions Economies of scale - Cost efficiencies Middlemen are performing at a ....
There's a smaller number of customers that are larger and tend be located near each other
Why are the fewer amounts of middlemen in business to business markets?
wholesaler, producer, third party
Within the marketing channel, logistics activities are often performed by a _____________, but they may also be performed by a ___________ or retailer or outsource to a ________ ______________
marketing channel
a group of individuals and organizations that direct the flow of products from producers to customers Major role is to make products available at the right time, at the right place, and in the right amounts
vertical marketing system
a marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers
order processing
a series of steps from receipt of a sales order to the successful delivery of the product or service It consists of three main tasks Order entry Order handling Order delivery That may be done manually but are more often handled through electronic data interchange systems
strategic channel alliance
an agreement whereby the products of one organization are distributed through the marketing channels of another
physical distribution
an important part of logistics and includes activities used to move products from producers to customers and other end users.
industrial distributor
an independent business organization that takes title to industrial products and carries inventories
horizontal integration
combines institutions at the same level of channel operation under a single management
supply chain
includes all the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer
operations management
the total set of managerial activities used by an organization to transform resource inputs into goods, services, or both.
exclusive distribution
usually gives a single dealer rights to sell a product in a large geographic area