Chapter 10 – Fashion Marketing Channels & Supply Chain Management – Flashcards

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Marketing Channels / Distribution Channels
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-Set of independent business organizations that help make a product available
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What are Intermediaries
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-Members of the marketing channel that work with manufacturers, other intermediaries and/or ultimate consumers
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Retailers *type of intermediaries
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-Organizations that sell mainly to consumers
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Merchant Wholesales *type of intermediaries
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-Businesses that own the goods they sell to other intermediaries
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Agents & Brokers *type of intermediaries
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-Represent wholesalers, retailers, or manufacturers to customers -Make buying & selling easier
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The Purpose of Marketing Channels
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-To accomplish what a manufacturer may not be willing or able to afford to do alone -Tasks satisfy customers & profits
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Channel of Distribution - 5 Stages (map of how raw materials become products then get into the hands of customers as goods)
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Raw Materials > Manufacturers > Wholesaler/Distributor > Retailer > Consumer
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Channel Conflict
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-Disagreements over which member should do what and how should each be compensated - can occur b/c members are often separate & often independent organizations
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Marketing Consumer Goods
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-4 marketing channels for consumer goods *1 Direct Marketing Channel *3 Indirect Marketing Channels
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Direct Marketing Channels *Marketing Consumer Goods
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-A promotional strategy in which the seller initiates direct contact to carefully chosen individual customers by one or more channels in order to cultivate a relationship & solicit a response, usually in the form of a purchase -Work directly w consumers
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Indirect Marketing Channels *Marketing Consumer Goods
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-A marketing channel that contains one or more intermediary -The shortest selling channel from manufacturer to retailer (used by large marketers)
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Business Marketing Channels
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-Can be direct or indirect -Services often marketed thru direct channels
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Conventional Marketing Channels
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-Independent manufacturers, intermediaries -Each transaction is unique -Doesn't maximize profitability opportunities because lack of coordination leads to inefficiency
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Vertical Marketing System (VMS)
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Arrangement in which manufacturers ; intermediaries work together to coordinate marketing efforts -3 types of VMS [corporate, contractual, administered]
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Corporate Marketing Systems *Type of VMS
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-Brings the entire channel under 1 ownership
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Contractual Marketing Systems *Type of VMS
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-Exists thru written agreements between manufacturers and intermediaries
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Administered Marketing System *Type of VMS
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-When 1 member of a of a marketing channel wields more power than the others
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Franchise
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An agreement between a large well known marketing organization and a local business to market the franchisers product exclusively
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Multi-Channel Marketing
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The use of marketers of a variety of channels in order to reach a wide range of customers
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Channel Decisions
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-Marketers need to consider a number of factors to choose the most appropriate channel to maximize profitability
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Analyzing Customer Demand *Channel Decisions
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Fashion marketers analyze customer needs
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Establishing Channel Goals *Channel Decisions
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3 factors when establishing channel goals *customer service levels *the size of the company *external marketing factors
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Determining Distribution Intensity *Channel Decisions
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Exclusive Distribution Strategy - using 1 or a few retailers in a certain area (expensive/luxury goods) Selective Distribution Strategy -when marketing goods need some explination or that customers want to compare w similar goods (popular priced items) Intensive Distribution Strategy -Place products in many locations (cheaper products)
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Channel Management
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Companies decide on the most useful marketing channels for their purposes, they first select, then motivate, and continually evaluate their choices
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Marketing Logistics
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Include planning, initiating ; controlling the physical flow of products form producers to consumers
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Supply Chain
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The combination of businesses that perform the marketing logistics activities necessary in moving products from producers to consumers
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Marketing Logistics Activities
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Supply chain managers work to provide logistics systems that meet the levels of service at the cost each customer is willing to incur *include a series of things
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Transportation *Marketing Logistics Activities
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Intermodal Transportation -combining more than 1 type of transportation such as truck and train or ship Containerization -shipping goods in standardized containers Radio Frequency Identification -tiny electronic chips that can be scanned with special equipment to provide detailed info about the product at any point thru the supply chain
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Warehousing ; Storage *Marketing Logistics Activities
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Marketers need to store goods for as short as possible to gain a profit
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Inventory Management *Marketing Logistics Activities
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Maintaining an assortment of goods to fulfill store requirements ; meet customer needs
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Information Processing *Marketing Logistics Activities
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Receiving merchandise orders, locating the goods, and tracking their shipment to the retailer Order processing - receiving ; transmitting info concerning merch orders such as quantity, style ; price Exporting - the marketing of a company's products in other countries
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