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
