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18 Cards in this Set
- Front
- Back
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Channel functions
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1. Research information
2. Promotion 3. Negotiation 4. Financing 5. Contact with buyers 6. Matching 7. Physical distribution 8. Risk taking |
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Theory of total minimum transactions
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With no intermediary involved, contacts = the number of producers X the number of buyers
With intermediary the number of contacts = the number of producers + the number of buyers The difference of these two values is the efficiency |
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Types of channels
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Direct: (zero level channel) from the manufacturer directly to the consumer (most services, internet transactions)
Indirect channels: have an intermediary involved One level channel: 1 intermediary, manufacturer-retailer-consumer (cost co, outlets, Wal-Mart) Two level channel: most common type, 2 intermediary, manufacturer-wholesaler-retailer-consumer Three level channel: manufacturer-wholesaler-jobber-retailer-consumer or manufacturer-agent/broker-wholesaler-retailer-consumer |
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What is dual distribution and what are the pros/cons of this strategy
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The use of two or more channels to distribute the same product to the same target market, can cause dissatisfaction among wholesalers and small retailers when having to compete with larger chains
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Be able to compare and contrast the different types of vertical marketing systems
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Vertical marketing system: (VMS) a marketing channel managed by a single channel member. 3 types: corporate, administered, or contractual
Corporate VMS: combines all stages of the marketing channel from producers to consumer under a single owner (supermarket chains that own food processing plants) control, cost Administered VMS: independent but high level of interorganizational management is achieved through informal coordination, (Wal-Mart) sales and power, money gives channel power Contractual VMS: (most popular) linked by legal agreements (franchise organizations, wholesaler sponsored groups, retail co-op) |
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Intensity of market coverage
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The number and kinds of outlets in which it will be sold
Intensive distribution: using all available outlets to distribute a product (convenience products) Selective distribution: using only some available outlets to distribute a product (clothes, electronics) shop around products Exclusive distribution: using a single outlet in a fairly large geographic area to distribute a product (high quality, luxury) |
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Understand channel power and which members have the most
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Channel power: the ability of one channel member to influence another member’s goal achievment
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Legal issues in channels
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Exclusive dealing: legality depends on the size of the organization
Tying arrangements: tying two products together (buy this item if you want that item) Full line forcing: tying the whole line together Refusal to deal: illegal if it’s as a punishment Exclusive territories: reduce intraband competition, illegal |
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What is logistics or physical distribution?
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Logistics: activity used to move products from producers to consumers and other end users (order processing, inventory management, material handling, warehousing, and transportation)
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Types of warehouses
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Warehousing: the design and operation of facilities for storing and moving goods
Private warehouses: company operated facilities for storing and shipping products Public warehouses: Businesses that lease storage space and related physical distribution facilities to other firms Storage warehouse is for long-term storage / distribution warehouse is for sorting and immediately sending |
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Characteristics of alternative modes of transportation and know when to use each one
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Railroads: heavy bulky freight shipped a long distance over land
Truck: flexibility Waterways: cheapest, heavy freight, nonperishable Air: fastest but most expensive, perishable goods, high value, low bulk Pipeline: liquids Internet: software and music |
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Types of intermodal transportation
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Piggyback: rail/truck
Fishyback: water/truck Airtruck or birdyback: air/truck |
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Be able to identify and describe ALL of the different types of retail stores
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1. Department stores: wide variety of goods organized in departments
2. Discount stores: department store with lower prices 3. Supermarkets: food related goods 4. Supercenter: discount store + a supermarket 5. Warehouse club: pay a membership fee 6. Convenience stores: serves immediate area 7. Specialty store: sells all similar items 8. Category killers: (superstores) very big specialty store (REI, staples, pets mart) 9. Off price retailers: name brands at lower prices (outlet stores) 10. Variety stores: cheap crap (dollar store) |
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Types of shopping centers
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Neighborhood shopping centers: shopping centers usually consisting of several small convenience and specialty stores (strip mall)
Community shopping centers: shopping center with one or two department stores, some specialty stores and convenience stores (shopping center) Regional shopping center: a type of shopping center with the largest department stores, the widest product mix and the deepest product lines of all centers (most malls) |
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Understand how the wheeling of retailing works
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a hypothesis holding that new retailers usually enter the market as low-status, low-margin, low-price operators but eventually evolve into a high-cost, high-price merchant
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Be able to identify and describe ALL of the different types of wholesalers
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Merchant wholesalers hold title to goods, assume ownership risks, and buy and resale
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LIMITED SERVICE WHOLESALERS
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(provide some services and specialize in few functions)
Cash and carry wholesalers: limited service wholesalers whose customers pay cash and take care of their own transportation Truck jobbers: (truck wholesalers) limited service wholesalers that transport products directly to customers for inspection and selection Drop shippers: limited service wholesalers that take title to products and negotiate sales but never take actual possession of products Mail order wholesalers: limited service wholesalers that sell products through catalogs |
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FULL SERVICE MERCHANT WHOLESALER
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(provide the widest range of wholesaling functions)
General merchandise wholesaler: full-service wholesaler with a wide product mix but limited depth within the product (drugs, nonperishable foods, cosmetics, detergents, tobacco) Limited line wholesaler: full-service wholesaler that carries only a few product lines but many products within those lines (health and beauty lines) Specialty line wholesaler: full service wholesaler that carries only a single product line or a few items within a product line (company selling only nuts, seeds, and dried fruit) Rack jobbers: full service specialty line wholesalers that own and maintain display racks in store (greeting cards, magazines) |
