Chapter 14 , 15 – Marketing Channels, Retailing – Flashcards

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Also the channel of distribution; A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer; a pipeline; represent the place or distribution in the marketing mix
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Marketing Channels
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The connected chain of all the business entities, both internal and external to the company, that perform or support the logistics function; connects business entities in the marketing channel; whole process
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Supply chain
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1) Specialization and division of labor 2) Overcoming discrepancies 3) Providing contact efficiency
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Marketing channel benefits
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-creates greater efficiency -provides lower costs -achieves economies of scale -aids producers who lack resources to market directly -builds good relationships with customers
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Specialization and Division of Labor
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The difference between the amount of product produced and the amount an end user wants to buy.
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Discrepancy of Quantity
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The lack of all the items a customer needs to receive full satisfaction from a product or products
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Discrepancy of Assortment
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A situation that occurs when a product is produced but a customer is not ready to buy it.
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Temporal Discrepancy
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The difference between the location of a producer and the location of widely scattered markets.
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Spatial Discrepancy
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Over __% reduction because efficiency of having a middle person
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50
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Retailers, Merchant Wholesalers, and Agents & Brokers
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Types of Channel Intermediaries
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A channel intermediary that sells mainly to customers; take title to goods
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Retailer
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An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them. ex. Sames Club
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Merchant Wholesaler
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Wholesaling intermediaries who facilitate the sale of a product by representing channel members; do not take title; contact buyers and sellers
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Agent and brokers
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1) Product characteristics 2) Buyer considerations 3) Market characteristics 4) Custom v. standardization
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Factors Suggesting Type of Wholesaling Intermediary to Use
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________ do well in complex, one off products, longer lead times between order and shipping, and when there is a low profit margin. ex. insurance
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Brokers
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_____ do well with standardization, simple products a lot of customers, and frequent ordering
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Wholesalers
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Transactional, Logistical, and Facilitating
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Types of channel functions
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1) Contacting & Promotion 2) Negotiating 3) Risk Taking
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Transactional Functions
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1) Physically distributing 2) Storing 3) Sorting
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Logistical Functions
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1) Researching 2) Financing
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Facilitating Functions
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The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption
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Logistics
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A distribution channel in which producers sell directly to consumers.
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Direct channel
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Channel where Retailer is between producer and consumer
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Retailer Channel
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goes Producer to Wholesalers to Retailers to Consumers
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Wholesalers Channel
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Goes from producer to agents/broker to wholesalers to retailers to consumers
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Agent/Broker Channel
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1) Agents link buyers and sellers 2) Companies drop the intermediary from the supply chain 3) "Private exchanges" with select suppliers automate the supply chain
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3 types of business to business exchanges on the internet
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1) Multiple channels 2) Nontraditional channels 3) Strategic channel alliances
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Alternative Channel Arrangements
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Channel that leads to one company's using another's marketing channel
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Strategic channel alliances
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1) Direct 2) Industrial 3) Agent/broker 4) Agent/broker industrial
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Types of business channels
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1) Marketing 2) Product 3) Producer
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Factors affecting channel choice
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1) Intensive 2) Selective 3) Exclusive
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Level of Distribution Intensity
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1) Customer profiles 2) Consumer or Industrial customer 3) Size of market 4) Geographic location
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Market Factors that affect channel choices
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1) Product Complexity 2) Product Price 3) Product Standardization 4) Product Life Cycle 5) Product Delicacy
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Product Factors that affect channel choices
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1) Producer Resources 2) Number of Product Lines 3) Desire for Channel Control
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Producer Factors
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A form of distribution aimed at having a product available in every outlet. Mass market selling. Convenience goods Ex. candy bars
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Intensive
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A form of distribution achieved by screening dealers to eliminate all but a few in any single area. Shopping and some specialty goods Ex. Ralph Lauren
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Selective
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A form of distribution that established one or a few dealers within a given area. Specialty goods and industrial equipment Ex. Rolex
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Exclusive
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Power, Control, Leadership, Conflict, and Partnering
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Social Dimension of Channels
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A channel member's capacity to control or influence the behavior of other channel members
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Channel Power
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A situation that occurs when one marketing channel member intentionally affects another member's behavior
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Channel Control
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A member of a marketing channel that exercises authority/power over the activities of other members
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Channel Leader
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A clash of goals and methods between distribution channel members
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Channel Conflict
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The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage
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Channel Partnering
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1) Have conflicting goals 2) Fail to fulfill expectations of other channel members 3) Have ideological differences 4) Have different perceptions of reality
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Conflicts may occur if channel members:
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occur among firms at the same level of the channel, e.g., two car dealers.
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Horizontal conflicts
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occur between different levels of the same channel, e.g., Black & Decker and Home Depot
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Vertical Conflicts
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Short-term, adversarial, independent, price is important, many suppliers, little info sharing, and little investment
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Transaction-Based Partnering
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Long-term, cooperative, dependent, value-added services, few suppliers, a lot of info sharing, and high investment required
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Partnership-Based
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All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use.
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Retailing
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1) Over 1.6 million U.S. retailers employ more than 24 million people 2) Retailers account for 11.6 percent of U.S. employment 3) Retailing accounts for 13 percent of U.S. businesses 4) Retailers ring up almost $4 trillion in sales—nearly 40 percent of the U.S. GDP 5) Industry is dominated by a few giant organizations, such as Wal-Mart
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Role of retailing
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1) Ownership 2) Level of Service 3) Product Assortment 4) Price
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Classification of Retail Operations
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1) Independent retailers 2) Chain stores 3) Franchises
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Classification of Ownership
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Owned by a single person or partnership and not part of a larger retail institution
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Independent Retailers
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Owned and operated as a group by a single organization
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Chain Stores
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The right to operate a business or sell a product
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Franchises
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1) Factory outlet/Warehouse clubs 2) Discount Stores 3) Exclusive Stores
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Levels of service
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The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
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Gross Margin
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Department, Specialty, Supermarkets, Drugstores, Convenience, Discount, Restaurants
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Types of retail operations
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Full-line discounters, specialty-discount stores, warehouse clubs, and off-price discount retailers
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Categories of Discount Stores
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Retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.
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Mass merchandising
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Retail store combining groceries and general merchandise goods with a wide range of services.
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Supercenter
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Retailer offering consumers very limited service and carrying a broad assortment of well-known, nationally branded "hard goods". ex. Walmart
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Full-line discounter
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Specialty discount stores that heavily dominate their narrow merchandise segment.
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Category killers
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Automatic vending, direct retailing, direct marketing, and electronic retailing
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Nonstore Retailing
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door-to-door, office-to-office, and home sale parties
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Direct retailing
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direct mail, catalogs and mail order, telemarketing, and electronic retailing
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Direct Marketing
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Dealer agrees to sell in products provided by a manufacturer or wholesaler.
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Product and Trade Name Franchising
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An ongoing business relationship between a franchiser and a franchisee.
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Business Format Franchising
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1) Define & Select a Target Market 2) Develop the 6 Ps
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Retail marketing strategy
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Demographics, Geographics, and Psychographics
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Segment Retail Marketing by
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Product, Place, Price, Personnel, Promotion, and Presentation
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Retailing Mix
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The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.
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Product Offering
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Advertising, Public Relations, Publicity, and Sales Promotion
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Promotion
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1) Community- economic growth potential, competition, and geography 2) Site- Freestanding store, shopping center, and mall
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Location
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Neighborhood socioeconomics, Traffic flow, Land costs, Zoning regulations, Public transportation, Site's visibility, parking, entrances and exits, accessibility, and safety, Fit with other stores
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Important factors for site choice
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1) Design attracts shoppers 2) Activities and anchor stores draw customers 3) Ample parking 4) Unified image 5) Sharing of common area expenses
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Shopping center advantages
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1) Expensive leases 2) Failure of common promotion efforts 3) Lease restrictions 4) Hours of operation 5) Anchor store domination 6) Direct competitors 7) Consumer time limits
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Shopping center disadvantages
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The overall impression conveyed by a store's physical layout, décor, and surroundings
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Atmosphere
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1) Employee type and density 2) Merchandise type and density 3) Fixture type and density 4) Sounds 5) Odors 6 ) Visual Factors
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Factors in Presentation
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1) Trading Up 2) Suggestion Selling
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Two Common Selling Techniques
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1) Easy-to-use websites 2) Product availability 3) Simple returns
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Customer Service for Online Retailers
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Product, Place, Promotion, Price, Presentation, Personnel
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Order of Retail Marketing Strategy
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Consumers are involved in the retail experience
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Interactivity
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Purchasing goods through mobile devices
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M-commerce
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Customer service and personal selling
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Personnel
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supports postioning
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Price
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