MKTG 350 - Test 4
Three types of specialty retailers
- Traditional - Category killers -
Problems that come with increased size of horizontal channel integration
- decreased flexibility - difficulties coordinating among members - need for additional marketing research and large-scale painting
Levels of market coverage
- intensive distribution - selective distribution - exclusive distribution
SCM key tasks
- operations management - logistics management - procurement - channel management
Variables that affect the intensity of market coverage
- replacement rate - product adjustment - duration of consumption - time required to find the product
Four utilities of the marketing channel
- time utility - place utility - possession utility - form utility
Characteristics of JIT
- usually there is not safety stock - requires a high level of coordination between producers and suppliers - eliminates waste - reduces inventory costs
Vertical marketing system (VMS)
A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers
Stockouts
A part of inventory management that involves a shortage of products
Supply chain
All the organizations and activities involved with the flow and transformation of products from raw materials through to the end consumer
JIT (Just-in-time)
An inventory-management approach in which supplies arrive just when needed for production or resale
Retailer
An organization that purchases products for the purpose of reselling them to ultimate consumers
Administered VMS
Channel members are independent, but informal coordination achieves a high level of inter-organizational management
Corporate VMS
Combines all stages of the marketing channel, from producers to consumers, under a single owner
Horizontal channel integration
Combining organizations at the same level of operation under one management
intensive distribution
Convenience products, such as Coca-Cola, Pringles, and Duracell batteries - available in many retail outlets
Multichannel retailing
Employing multiple distribution channels that complement their brick-and-mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews and make actual purchase.
wholesalers and retailers
Firms that are "downstream"
producers and suppliers
Firms that are "upstream" in the supply chain
longer channels with many intermediaries
Less-expensive standardized products with long shelf lives can go through
making products available at the right time at the right place in the right quantities
Major role of marketing channel is to
short channels
Marketers of complex and expensive products, perishable products, and fragile products that require special handling will likely employ
5.9%
Retailers contribute $1.1 trillion, or ____, directly to the US gross domestic product
Selective distribution
Shopping products, such as iPhone, televisions, smartwatches and shoes - available in some outlets
exclusive distribution
Specialty products, such as haute couture, Montblanc pens, BMWs, and Fendi handbags - available in very few outlets
1 million
There are more than ____ retail establishments in the US, and they employ nearly 16 million people
Creating utility & facilitating exchange efficiencies
What functions does the marketing channel provide
When one member of a marketing channel purchases the operations of another member or simply performs the functions of another member, eliminating the need for that intermediary
When does vertical channel integration occur?
against competition because of increased bargaining power and the ease of sharing information and responsibilities
When is vertical channel integration more effective and why?
EDI (electronic data interchange)
a computerized means of integrating order processing with production, inventory, accounting and transportation
Marketing channels
a group of individuals and organizations that direct the flow of products from producers to individuals and organizations that direct the flow of products from producers to customers within the supply chain
Contractual VMS
channel members are linked by legal agreements spelling out each member's rights and obligations
Vertical channel integration
combining two or more stages of the marketing channel under one management
Recycling
converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products
channel management
directing the flow of products
Specialty retailers
emphasize narrow and deep assortments; they do not sell specialty items but instead offer substantial assortments in a few product lines
Form utility
formed by assembling, preparing, or otherwise refining the product to suit individual customer needs
Superstore
giant outlet offering all food and non-food products found in supermarkets, as well as most routinely purchased products (general-merchandise retailers)
Time utility
having products available when the consumer wants them
procurement
involves the processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information
Warehouse club
large-scale, members-only establishments combining cash-and-carry wholesaling with discount retailing (general-merchandise retailers)
Place utility
making products available in locations where customers wish to purchase them
operations mangement
managing activities from production to final delivery through system-wide coordination
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 customers' needs and wants
Supermarket
self-service store offering complete line of food and non-food products and some non-food products (general-merchandise retailers)
Benefits of channel integration
stabilize supply, reduce costs, increase channel member coordination
Channel power
the ability of one channel member to influence another member's goal achievement
Purchasing
the act of negotiating and executing transactions to buy and sell goods, materials and purchasing
Supply chain management
the coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer.
Possession utility
the customer has access to the product to use or to store for future use
Channel captain
the dominant leader of a marketing channel or a supply channel (may be a producer, wholesaler, or retailer)
intensity of market coverage
the number and kinds of outlets in which a product will be sold
Sourcing
the process of determining what materials a firm needs, where those materials come from, and how the impact marketing integrity
Significance of marketing channel
they generally entail long-term commitments among a variety of firms