Ch 12, 13, 14 – Flashcards
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What is line extension?
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Closely related to an existing product (coke and cherry coke).
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What is Product modification?
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We change one or more characteristics of a product (cars)
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What is the main difference between line extension and product modification?
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Product modification gets rid of the old product.
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What are the three different kinds of product modification?
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-quality modification -functional modification -aesthetic modification
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What is quality modification?
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change durability and dependability
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What is functional modification?
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change what the product does and how it works
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What is aesthetic modification?
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looks, tastes, sounds, smells, feels, etc.
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What are line extension and product modification used for?
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existing products.
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What can "new" be?
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- first on the market -new to a company -new to a market
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What are new products?
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risky and expensive.
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What is important to realize about the product development process?
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a product can be dropped at any stage.
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Is it possible to skip stages in the development process?
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Yes.
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What happens as you move from stage to stage?
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everyone is more expensive than the one before it.
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What are the stages in the product development process?
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1) idea generation 2) idea screening 3) concept testing 4) business analysis 5) product development 6) test marketing 7) commercialization
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What is idea generation?
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come from inside or outside a company
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What is idea screening?
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Have to meet checklist
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What is concept testing?
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expensive- write out in great detail and ask people about it.
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What is test marketing?
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have a real product at a real price in a real market.
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What is commercialization?
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launch the product.
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At what stage are most products dropped?
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idea screening.
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What is product differentiation?
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is the process of creating and designing products so customers perceive them as being different from competition- if no difference they compete on the price.
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What is product deletion?
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although it is more exciting to develop new products, we must also delete old products.
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What does a systematic product review consist of?
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-phase-out -run-out -delete -divest
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What does it mean to phase-out?
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no change- let die natural death
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What does it mean to run out?
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selectively withdrawal (coupons, advertising)
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What does it mean to divest?
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sell to another company
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What are the organizational structures needed to develop and manage products?
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-product manager -brand manager -market manager -venture team
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What is a product manager?
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manager in charge of the marketing of a product line, or of a product in that line
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What is a brand manager?
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handling the marketing of a brand
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What is a market manager?
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the manager who manages the activities of marketing to a specific market
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What is a venture team?
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a team from various functional areas in a company
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What happens to the people that are a part of a venture team?
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They are relieved of all duties in their functional area
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What would you call someone who was hired by Kraft to market cheese products?
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a product manager
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What are the six characteristics of services?
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-intangibility -inseparability -perishability -heterogeneity -client based relationships -customer contact
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What is intangibility?
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not physical, cannot be perceived/ evaluated by the senses
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What is inseparability?
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produced and consumed at the same time (ex. customer is involved in a haircut)
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What is perishability?
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cannot produce in advance and store
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What is heterogeneity?
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variation in quality (bad?, good?) so, it is difficult to standardize quality
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What is client based relationships?
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often develop a relationship
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What is customer contact?
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may require a high level of contact.
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What is the marketing mix for services?
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-product -place -promotion -price
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What is a product?
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core product is room, supplemental is phone, cable TV, free breakfast, etc.
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What is place?
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usually direct from provider to customer
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What is promotion?
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Allstate "your in good hands", Prudential "rock of Gibraltar" (tangible)
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What is service quality?
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Customers perception of how well a service meets, or exceeds expectations
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What are the three evaluation attributes?
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search, experience, and credence
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What is search quality?
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Tangible attribute that can be judged before the purchase of a product (hard with services)
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What is experience quality?
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come from experiencing the attributes during the purchase and consumption of a service
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What is a credence quality?
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attributes that we cannot judge even during the purchasing and consuming of a service (dentist)
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What are four factors that affect service quality?
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-customer expectations -quality specifications -employee performance (lowest paid, least trained) -management of service expectations- NMU add card
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What is nonprofit marketing goal?
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-to achieve goals other than normal business goals -there are differences from for-profit marketing -nonprofit objectives -marketing strategies
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What is a nonprofits marketing strategy?
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-target markets -develop a marketing mix
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What are the three different kinds of target markets?
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-target public -client public -general publics
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What is opportunity cost?
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what you give up to do something else
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What is a brand?
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name, term, symbol, or design
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what is a brand name?
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can be spoken- chevy, nike
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What is a brand mark?
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can not be spoken- the nike "swoosh"
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What is a trademark?
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legal ownership of the brand
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What is the trade name?
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the full legal name of an organization
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What is the value of branding to buyers?
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-identify specific brands -evaluate quality -reduces time shopping -reduces perceived risk -psychological reward
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What is the value of branding to sellers?
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-makes promotion easier -allows for more price stability -allows for brand loyalty- which then gets repeat purchases
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What is brand loyalty?
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degree of favorable attitude toward the brand
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What is brand insistence?
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no change- the consumer wont take sprite if they don't have sierra mist
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What is brand equity?
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marketing and financial value of a brand
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What are the three types of brands?
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-manufacturer -private distributor -generic brands
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What is a manufacturer brand?
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produces brand- levi
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What is a private distributor brand?
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store brands (mossimo, faded glory)
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What are people looking for when selecting a brand?
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- easy to say -indicate benefits and uses -distinctive -allow for translation into other languages (in Russia mist from sierra mist means trash or manure)
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What must you do to your brand name?
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you must protect it
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What are three branding policies?
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-individual branding -family branding -brand extensions
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What is individual branding?
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individual brand for each product- can go after different market segments
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What is family branding?
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are name for all products- easy product launch (campbells, heinz)
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What is brand extensions?
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keep brand and come up with extensions- coke- diet coke, cherry coke
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What is co-branding?
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using two or more brands on one product- oscar mejer and kraft make lunchables
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What can you license the right for people to use your name?
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when your brand is perceived as having equity
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What is licensing?
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agreement to allow another company to use our brand in return for a licensing fee
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What are the functions of packaging?
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-protect -convenience -promote -communicate
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What should packaging be?
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a silent sales rep
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What should you consider with packaging?
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-tamper resistant (tylenol murders with cyanide) -degree of package consistency (company should have a look) -must consider package size, shape, color, graphics, texture (want it to be light) -transportation (cost can be high) -storage -handling -environmentally friendly
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What are marketing strategies that can be used for packaging?
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-changing (altering) the package- update but don't confuse the customer -secondary- use package -category consistent- green olives in glass -innovations -multiple packaging- tennis balls in tubes of 4 -handling- improved packaging- milk in glass to plastic to with handle
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What does packaging receive?
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It gets and deserves much criticism
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What does labeling do?
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-identifies, promotes, contains other info (contents, weight, servings) -legal/ ethical issues persist- move to green marketing
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What is a UPC?
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Universal Product code- hundreds of millions of them
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What is distribution?
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making products available to customers when and where they want them
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What is a supply chain?
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all the flow and transformation activities from raw materials to the final customer
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What is logistics mgmt?
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planning and controlling the flow and storage of the products from origin to consumption
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What is supply-chain mgmt?
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integrates all operations, functions, and activities to get the right products, in the right quantities, to the right places, at the right time
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What is a supply-chain mgmt supposed to be?
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a long-term partnership among channel members
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What is a supply-chain mgmt supposed to do?
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reduces costs and develops innovative approaches to satisfy customers
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What is a marketing channel?
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the group that directs the flow of products from producers to consumers
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What are channels?
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long term commitments- they are the least flexible of the 4 p's
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What do marketing intermediaries do?
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link producers to other middlemen or to the final product user (they buy and resell)
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Who does a wholesaler sell to?
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wholesalers, retailers, or industrial customers
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Who does retailers sell to?
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the customer
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What are the activities that cannot be eliminated?
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-marketing information -marketing management -facilitating exchanges -promotion -price -physical distribution
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What utility do channels create?
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-time -place -possession -form
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What will eliminating wholesalers do?
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It will not do away with the need for the services they perform
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What are the different channel types?
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channels for consumers and businesses
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What are channels for consumer?
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products can be long (indirect) or short (direct)
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What are channels for businesses?
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products can be long or short
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What channels are normally longer?
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customer channels
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What is multiple channel strategy?
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manufacturers may use several channels at the same time to reach different target markets
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What are examples of multiple channel strategy?
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-dual distribution -strategic channel alliance
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What is dual distribution?
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two or more channels to same target market- barnes and noble- in store and online
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What is strategic channel alliance?
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products of one company are distributed through the channel of another- bottled water work with pepsi
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What is intensive distribution?
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all available outlets (convenience)
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What is selective distribution?
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some available outlets (shopping)
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What is exclusive distribution?
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only one outlet in a large area (specialty)
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What are strategic issues on marketing channels?
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channels have a channel captain
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How do you become the channel captain?
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in order to be the leader, the channel member must be able to influence others (have power)
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What is vertical channel integration?
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combines two or more stages under one management- pepsi
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What is horizontal channel integration?
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combines companies at the same level retailer-retailer-retailer-retailer
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What is the same thing as logistics?
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physical distribution
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What is physical distribution?
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activities to move products from producers to consumers, from point of origin to point of consumption
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What is increasingly common?
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outsourcing
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What does physical distribution activities include?
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-order processing -inventory management -materials handling -warehousing -transporting
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What is the main objective of physical distribution?
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reduce cost while increasing services
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How do we view physical distribution?
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as a system to reduce overall cost- we use a total cost approach
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What are stockouts?
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out of inventory conditions
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What is just-in-time?
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supplies arrive just before they are needed (dell computer, harley davidson)
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What is unit loading?
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boxes onto a pallet
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What is containerization?
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many items into a single large container
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What are transportation modes and what are they good for?
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-rail: heavy, bulk -trucks: most flexibility -water: cheapest for heavy, low value, non perishable (salt, coal) -air: fast, expensive, high value, emergency -pipeline: most automated (oil)
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what is an intermodal?
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combining modes (most common is piggy-back)
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What is freight forwarders?
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consolidate shipments from several organizations into efficient lots
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What is dual distribution?
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using two or more marketing channels (could break the law)
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what is tying agreements?
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supplier sells a product with the stipulation that the customer must buy other product
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What is exclusive dealing?
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forbid an intermediary to carry competing products
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What is restricted sales territories?
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no other reseller can sell in a specific geographic area (coors beer)
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what is refusal to deal?
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when producers reject channel members (is alright in most cases)
