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supply chain

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set of institutions that move goods from the point of production to the point of consumption

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supply chain consists of 5 things

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o Consumer behavior o Competitive behavior o Socioeconomic environment o Technological environment o Legal and ethic enviroment

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logistics network

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consists of all the firms throughout the supply chain that are involved in moving physical inventory from it intitial source to the retail store

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logistics inventory

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physical inventory that is in the logistics network • Total cost of business- process when costs beyond simpoly producing a product are considered and includes all of the direct and indirect costs of manufacturing, distributing, and marketing a product

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• Primary marketing institutions

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channel memebers who take title to the goodsa s they move through the marketing channel.

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• Facilitating marketing insititutions-

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do not actuyally take title but assist in the marketing process by specializing in the performance of certain marketing functions o Manufacturers o Wholesalers o Retailers

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Drop-ship retailer

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- retailer does not hold inventory, but instead transmits customers orders and shipping details to either to manufacturer or whole sales

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public warehouse

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- facility that stores goods for safekeeping for any owner in return for a fee, usually based on space occupied

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third party logistics provider

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• Thirs-party logistics provider- firms that provide service to retailers, and other customers, of oursourced logistics services for part, or all, of their storage, transporting, sorting, infor gatherinh, and risk management

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o Direct supply chain

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channel that results when a manufacturer sells its goods directly to the final consumer or end user

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intensive distibution

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means that all possible retailers are used in a trade area

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selective distribution

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means that a moderate number of retailers are used in a trade area

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exclusive distribution

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means only one retailer is used to cover a trading area.

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o Conventional marketing channel-

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one in which each channel member is loosely aligned with the others and take a short-term orientation

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vertical marketing channels

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capital-intensive networks of severeal levels that are professionally managed and centrally programmed to realize the techonological, managerial, and promotional economies of a long-term relationship orientation

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types of vertical marketing channels

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corp, contractual, administered

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corporate vertical marketing channels

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using a contract to govern the working relationship between channel members and include voluntarty groups, retailer-owned cooperatives, and franchised retail programs

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wholesales sponsored voluntary groups

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wholesaler that brings together a group of independently owned retailers and offeres them a coordinated merchandising and buying program that will provide them with economies like those their chain store rivals are able to obtain

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retailer-owned cooperatives

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wholesale institutions, organized and owned by member retailors, that offer scale economies and services to member retailers, which allows them to competet with larger chain buying organizations

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franchise

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form of licensing by which the owner of a product service, or business method obtains distribution through affiliated dealers

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administered vertical marketing channels

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when one of the channel members taked the initiative to lead the channel by applying the principles of effective interorganizational management

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types of contracual marketing channels

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wholesale sponsored voluntary groups, retailer owned cooperatives, franchise

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quick response systems

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(efficient consumer response) intergrated info, production, and logistical systems that obtain real time info on consumer actions by capturing sales data at point of purchase terminals and then transmitting this info back through the entire channel to enable efficient production and distribution scheduling

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interorganizational management consists of...

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dependency, power, conflict, collaboration

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power

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ability of one channel member to influence the decision of the other channel members

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reward power

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based on B's perception that A has the ability to provide rewards for B

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expertise power

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is based on B's perception that A has some special knowledge

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referent power

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is based on the identification of B with A

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coercive power

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is based on B;s belief that A has the capability to punish or harm B if B doesn't do what A wants

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legitimate power

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is boased on A's right to influence B, or B's belief that B should accept A's influence

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types of power

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reward expertise referent coercive legitimate

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perceptual incongruity

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occurs when the retailer and supplier have different perceptions of reality

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goal incompatability

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occurs when achieving the goals of either the supplier or the retailer would hamper the performance of the other

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dual distribution

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occurs when a manufacturer sells to independent retailers and also through its own retail outlets

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domain disagreements

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when there is disagreement about which member of the marketing channel should make decisions

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diverter

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unauthorized member of a channel who buys and sells excess merchandise to and from authorized channel members

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gray marketing

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when branded merchandise flows across national boundaries and through authorized channels

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freeriding

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when a consumer seeks info from a full store and buys online for cheaper

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mutual trust

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when both the retailer and its suppliers have faith that each will be truthfyl and fair in their dealing with the other

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two-way communication

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occurs when both retailer and supplier communicate openly their ideas, concerns, and plans

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solidarity

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high value is placed on the relationship between a supplier and retailer

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category management

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process of managing all SKU within a product category and involves the simultaneous management of proce, shelf space, merchandising strategy, promotional effort, and other elements of the retail mix within the category based on the firms goals, the changing environment, and consumer behvaior

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horizonatl price fixing

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occurs when group of competing retailers establishes a fixed price at which to sell certain brands of products • illegal

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vertical price fixing

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occurs when a retailer collaborates with the manufacturer or wholesaler to resell an item at an agreed upon price

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price descrimination

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occurs when two retailers buy an identical amount of like grade and quality merchandise from the same supplier but pay different prices • Interstate commerce • Potential for a substantial lessening must exist

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deceptive pricing

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when a misleading price is udes to lure customers into the store and then hidden charges are added

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predatory pricing

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exists when a retail chain charges different prices in different geographic area to eliminate competition in selected geographic areas

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palming off

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when a retailer represents that merchandise is made by a firm other than the true manufacturer

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what law does decepting pricing break

answer

wheeler lea

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what law does predatory pricing break

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robinson-patman

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price discrimination is only illegal if 2 things...

answer

interstate commerce, potential for substantail lessening

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promotional contraints break what law

answer

FTC, wheeler lea

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deceptive advertising

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when a retailer makes false or misleading advertising claims about the physical makerup of a product, the benefits to be gained by its use, or the appropriate uses for the product

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bait and switch advertising

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advertising or promoting a product at an unrealistically low price to serve as bat and then trying to switch the customer to a higher priced product

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deceptive sales practice included

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failing to be honest or ommiting key facts; using deceptive credit concepts

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product contraints

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safety, liability laws, warranties

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product liability laws

answer

deal with the sellers responsibility to marker safe products

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expressed warranties

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either written or verbalized agreemeings about the performance of a product and can cover all attributes of the merchandise or only one attribute

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implied warranty of merchantability

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made by every retailer sellds goods and implies that the merchandise sold is fit for the ordinary purpose for which such goods are typically used

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impled warranty of fitness

answer

warranty that implies that the merchandise is fit for a particular purpose and arises when the customer relies on the retailer to assist or make the selection of goods to serve a particular purpose

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warranties is covered in what act..

answer

magnuson moss wanranty act

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territorial contraints

answer

attempts by the supplier to limit the geographice area in which a rateiler may resell its merchandise

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dual distribution.

answer

when a manufacturer sells to independent retailers and also through its own retail outlets

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one way exclusive dealing

answer

occurs when the supplier agrees to give the retailer the exclusive right to sell the suppliers product in a particular trade area

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two way exclusive dealing

answer

occurs when the suppliers offers the retailer the exclusive distribution of a merchandise line or product in a particular trade area if in return the retailer will agree to do something for the manufacturer such as heavily promote the supplier's products or not handle competing brands

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tying agreement

answer

exists when a seller with a strong product or service requires a buyer to purchase a weak product or service as a condition for buying the strong product or service

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full line policy

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having to hold all inventory in order to hold the best products

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ethics

answer

set of rules for human moral behavior

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what does the two way exclusive dealing break?

answer

clayton act is they substantially lessen competition or tend to create a monopoly

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The full line policy breaks what act?

answer

sherman, clayton, and ftc

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explicit code of ethics

answer

cosnsists of a written policy that states what is ethical and unethical behavior

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implicit code of ethics

answer

unwritten but well understood set of rules or astandars of moral responsibility

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slotting files

answer

fees paid by a vendor for space or a slot on a retailers shelves, as well as having its UPC number given a slot in the retailers computer system

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markdown money

answer

what retailers charge to cuppliers when merchandise does not sell at what the vendor intended

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buying merchandise consists of what qulatities

answer

product, sourcing, sustainability, slotting fees, bribery

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selling merchandise consists of what qualities

answer

products sold, selling practices

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retailer employee relationships consists of what qualities

answer

missuse of company assets, job switching, employee theft

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home page

answer

introductory or first material viewrs see when they access a retailers internet site

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virtual store

answer

otal collection of all the pages of info on the retailers internet site

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ease of access

answer

consumer ability to easily and quickly find a retailers web site in cyberspace

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target market qualties

answer

measurable substantial accessable

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store-based retailers

answer

operate from a fixed store location that requires customers to travel to the store to view and select merchandise or services

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central business districts

answer

consists of an unplanned shopping area around the geographic point at which all public transportation systems converge

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strengths of cbd

answer

easy access to transp wide product assortment variety in store images prices services

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weakenesses of cbd

answer

inadequate parking older stores higher rents and taced traffic congestion high crime rate decaying conditions of cities

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secondary business district

answer

hopping area that is smaller than the CBD and that revolved around at leaset one department or variety store at a major street intersection

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neighborhood business district

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shopping area that evolves to satisfy the convenience oriented shpping needs of a neighborhood, generally contains several small stores and is located on a major atery of a residential area

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anchor stores

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stores in a shopping center that are the most dominant and are expected to draw customers to the shopping center

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freestanding retailer

answer

generally locates along major traffic arteries and does not have ny adjacent retailers to share traffic

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nonstore base retailers

answer

intercept customers at home, work, or at a place other than a store where they might be susceptible to purchasing

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geographic info system

answer

computerized system that combines physical geography with cultural geography

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culture

answer

buffer that people have created between themselves and the raw physical environment and includes the characteristics of the population, man-made objects, and mobile physical structures

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thematic maps

answer

use visual techniques such as colors, shading, and lines to display cultural characteristics of the physical space

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uses of GIS

answer

market selection site analysis trade and definition new store cannibilization advertising management merchandise management evaluation of store managers

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trading area

answer

geographic area from which a retailer, group of retailers, or community draws its customers

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retail gravity theory

answer

suggests that there are underlying consistencies in shopping behavior that yield to mathematical analysis and prediction based on the notion or concept of gravity

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reillys law of retail gravitation

answer

based on Newtonian gravitational principles, explains how large urbanized area attract customers from smaller rural communities

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point of indifference

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breaking point between two cities where customers are indifferent to shopping in either city

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retail store saturation

answer

condition where there are just enough store facilities for a given type of store to efficiently and satisfactorily serve the population and yield a fair profit to the owners

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understored

answer

where the number of stores in relation to houselholds is relatively low so that engaging in retailing is an attractive economic endeavor

question

overstored

answer

number of stores in relation to households is so large that to engage in retailing is usually unprofitable or marginally profitable

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index of retail saturation

answer

• Index of retail saturation- ration of demand for a product (households in the geographic area multiplied by annual retail expenditures for a particular line of trade per househole) divided by the available supply (square footage of retail facilities of a particular line of trade in the grographic area) o IRS = (H X RE)/RF

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market demand potential

answer

pop charach buyer behavior charach household income househole age profile household composition community life cycle population density mobility

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market supply factors

answer

square feet per store square feet per employee growth in store quality of competition

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site analysis

answer

evaluation of the density of demand and supply within each market with the goal of identifying the best retail site

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demand denisty

answer

extent to which the potential demand for the retailers goods and services is concentrated in certain census tracts, ZIP cod areas, or parts of the community

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eminent domain law

answer

inherent power of the government to seize private property without the owner's consent in order to benefit the community

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100 percent location

answer

when there is no better use for a site than the retail store that is being planned for that site

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store comatibility

answer

exists when two similar retail businesses locate next to or nearby each other and they realize a sales volume greater than what they would have achieved if they were located apart from eachother

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retail clusters

answer

group of stores closely located that share similar characteristics such as product category, store format, or customer demographics.

Mktg 325 – Flashcard

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