MARK 201 exam 3
Terms
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- merchant middlemen
- Take title to the products they help to market. 2 groups: Wholesalers, retailers
- agent middlemen
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never own the products, but they do arrange the transfer of title
•examples: real estate brokers, manufacturer’s agents, and travel - disintermediation
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⬢how middlemen are eliminated from channels
⬢HOWEVER lower costs may not always be achieved
⬢You can eliminate middlemen, but you cannot eliminate the essential distribution activities they perform. - distribution channel
- ⬢Consists of the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user.
- gray marketing
- ⬢items are sold through distribution channels that are not authorized by the manufacturer
- direct distribution
- ⬢a channel consisting only of producer and final customer, with no middlemen providing assistance
- multiple distribution channels
- ⬢when the producer uses more than 1 channel of distribution for reasons such as achieving broad market coverage or avoiding total dependence on a single arrangement.
- vertical marketing system
- ⬢tightly coordinated distribution channel designed specifically to improve operating efficiency and marketing effectiveness
- contractual vertical marketing system
- ⬢Independently owned firms join together under a contract specifying how they will operate
- administered vertical marketing system
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⬢Coordinates distribution activities through:
o1. The market and/or economic power of one channel member
o2. The willing cooperation of channel members - intensive distribution
- ⬢Producer sells its product through every available outlet in a market where a consumer might reasonably look for it
- selective distribution
- ⬢Producer sells its product though multiple, but not all possible, wholesalers and retailers in a market where a consumer might reasonably look for it.
- exclusive distribution
- ⬢The supplier agrees to sell its product only to a single wholesaling middleman and/or retailer in a given market
- channel conflict
- ⬢Exists when one channel member perceives another channel member to be acting in a way that prevents the first member from achieving its distribution objectives.
- chargeback
- ⬢Penalty that a retailer or wholesaler assesses to a vendor that actually or allegedly violates an agreed upon dist. Policy or procedure.
- horizontal conflict
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⬢Occurs among firms on the same level of dist.
⬢Ex: toys r us VS walmart - scrambled merchandising
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⬢Primary source of horiz. Conflict
⬢Middlemen diversify by adding product lines not traditionally carried by their type of business
⬢Ex: supermarkets expanded beyond food and now carry health and beauty aids, small appliances, etc. - verticle conflict
- ⬢Occurs b/w producer and wholesaler or b/w producer and retailer
- slotting fee
- ⬢Fee that some retailers charge a manufacturer in order to place its product on store shelves
- channel control
- ⬢The actions of a firm to regulate the behavior of other companies in its distribution channel
- channel power
- ⬢The ability of a firm to influence or determine the behavior of another channel member
- category management
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⬢Retailer allows a large supplier to manage an entire product category
⬢Ex: Borders put HaperCollins Publishing in charge of their cookbooks section - exclusive dealing
- •Manufacturer that prohibits its dealers from carrying products offered by the producer’s competitors. (((basically….stores don’t carry competing brands)))
- trying contract
- ⬢When a supplier sells a product to a middleman only under the condition that the middlemen buy another (possibly unwanted) product from the supplier
- refusal to deal
- ⬢Producer may refuse to sell to certain middlemen
- exclusive-territory policy
- ⬢Producer requires each middleman to sell only to customers located w/i an assigned territory
- retailing (retail trade)
- ⬢Consists of the sale, and all activities directly related to the sale, of goods and services to ultimate consumers for personal, non-business use.
- retailer
- ⬢A firm engaged primarily in retailing
- physical facilities
- •Represent the distribution element of a retailer’s marketing mix
- shopping center
- ⬢A planned grouping of retail stores that lease space in a structure that is typically owned by a single organization
- corporate chain
- ⬢An organization of 2+ centrally owned and centrally managed stores that generally handle the same line of products
- independent retailer
- ⬢A company w. a single store that is not affiliated w/ a contractual vertical mark. sys.
- retailer cooperative
- ⬢Formed by a group of small retailers that agree to est. and operate a wholesale warehouse.
- voluntary chain
- ⬢Sponsored by a wholesaler that enters into a contract w/ interested retailers
- franchising
- ⬢Involves a continuing relationship in which a parent company provides management assistance and the right to use its trademark in return for payments by the from the individual business unit
- product and trade name franchising
- •Dist. Agreement under which a supplier authorizes a dealer to sell a product line, using the parent company’s trade name for promotional purposes,
- business format franchising
- ⬢An agreement covering an entire method (or format) for operating a business, under which a successful business sells the right to operate the same business in different geographic areas.
- department store
- ⬢Seeks a differential advantage through a combination of distinctive, appealing merchandise and numerous customer services, such as alterations, credit plans, and bridal registry
- discount retailing
- ⬢Involves comparatively low prices as a major selling point combined w/ reduced costs of doing business.
- discount store
- ⬢Large-scale retail institution that normally carries a broad assortment of soft goods (apparel) and hard goods (appliances, home furnishings).
- supercenter
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⬢Combines discount store and grocery store
⬢Ex: target or walmart - limited line store
- ⬢Typically sell products such as clothing, baked goods, and furniture and seek to maintain full, or non-discounted, prices.
- specialty store
- ⬢Concentrates on a particular product line (baked goods) or part of a product line (cinnamon rolls)
- off-price retailer
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⬢Positioned themselves below discount stores w/ lower prices on selected product lines
⬢Ex: payless shoes - category-killer store
- ⬢Aims to capture a large portion of sales in a specific product category and, in so doing, kill the competition
- supermarket retailing
- ⬢Features several related product lines, a high degree of self service, largely centralized checkout, and competitive prices
- supermarket
- ⬢Offers a moderately broad, moderately deep product assortment spanning goceries and some nonfood lines
- convenience store
- ⬢A type of retail institution that concentrates on convenience-oriented groceries, nonfoods, typically has higher prices than grocery stores, and offers a few customer services
- warehouse club
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•Combined retailing and wholesaling operation
•Members pay an annual fee
•Ex: Costco, Sam’s Club - nonstore retailing
- ⬢Retailing activities resulting in transactions that occur away from a physical store
- direct selling
- ⬢Personal contract b/w a sales person and a consumer away from a store that results in a sale
- telemarketing
- A form of nonstore retailing in which a sales person initiates contact with a shopper and also closes the sale over the telephone.
- automatic vending
- ⬢Sale of a product through a machine w/ no personal contact b/w buyer and seller
- online retailing
- ⬢Consists of electronic transactions in which the purchaser is an ultimate consumer
- direct marketing
- ⬢Using advertising to contract consumers who, in turn, buy products w/o visiting a retail store
- wholesaling
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⬢The sale, and all activities directly related to the sale of goods and services to businesses and other organizations for:
oResale
oUse in producing other goods or services
oOperating an organization - wholesaling middlemen
- ⬢Firms engaged primarily in wholesaling
- merchang wholesaler
- ⬢An independently owned firm that engages primarily in wholesaling and takes title to (that is, owns) the products being dist.
- agent wholesaling middlemen
- ⬢An est. that engages primarily in wholesaling by actively negotiating the sale or purchase of products on behalf of other firms but that does not take title to the prod. Being dist.
- manufacturers sales facility
- ⬢An est. that engages primarily in wholesaling and is owned and operated by a manufacturer but is physically separated from manufacturing plants.
- manufacturers sales branch
- ⬢Carries an inventory of the product being sold
- manufacturers sales office
- •Doesn’t carry a stock of the product being sold
- full-service wholesaler
- ⬢An independent merchant middleman that performs a full range of wholesaling functions
- truck jobber
- ⬢Carries a ltd. Line of perishable prod. And delivers them by truck to stores. (AKA truck distributor)
- drop shipper
- ⬢Sells merch. For delivery directly from the producer to the customer but does not physically handle the product. (AKA desk jobber)
- manufacturers agent
- ⬢A independent agent wholesaling middleman that sells part or all of a manufacturers product mix in an assigned geographic territory
- broker
- ⬢An independent agent wholesaling middleman that brings buyers and sellers together and provides market information to one party or the other.
- selling agent
- •Essentially substitutes for a marketing dept. my marketing a manufacturer’s entire output.
- auction company
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⬢Helps assembled buyers and sellers complete their transactions.
oTraditional provide auctioneers to do the selling and facilities - import-export agent
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⬢Brings together sellers and buyers from different countries.
oExport agents work in the country where to prod. Is made
oImport agents based in the country where the product will be sold - physical distribution
- ⬢Consists of all activities involved in moving the right amount of the right products to the right place at the right time
- fulfillment
- ⬢Entails having the merchandise that is ordered by a customer in stock and then packaging and shipping in an efficient, timely manner
- online category manager
- ⬢Handle e-commerce fulfillment in a particular product area for manufacturers and conventional retailers
- supply chain management
- ⬢Represents a total system perspective of distribution channels and physical dist.
- total cost concept
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⬢Integral to effective supply chain management
⬢In physical dist the recognition that the best relationship b/w costs and profit must be est. for the entire physical dist. System, rather than for individual activities. - contract logistics
- ⬢An arrangement under which a firm outsourcers various business tasks to one or more independent firms
- physical distribution management
- ⬢the development and operation of process resulting in the effective and efficient physical flow of products.
- electronic data interchange (EDI)
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⬢order processing⬦orders, invoices, and perhaps other business information and transmitted by computer rather than by mail
⬢speeds up the process and reduces paperwork - economic order quantity (EOQ)
- ⬢is the volume at which the sum of inventory-carrying costs and order-processing costs are at a minimum.
- just-in-time (JIT)
- combines inventory control, purchasing, and production scheduling.
- radio frequency identification (RFID)
- ⬢tags allow constant monitoring of the whereabouts of products in various locations including manufacturing plants, warehouses, retail storerooms and selling floors.
- market response system
- ⬢A form of inventory control in which a purchase by a final customer activates a process to produce and deliver replacement items
- collaborative planning, forecasting and replacement (CPFR)
- ⬢method by which a producer or a wholesaler and a customer, ordinarily a retailing chain, jointly develop sales forecasts through a shared website and also design marketing plans
- enterprise resource planning system (ERP)
- ⬢strategy in which the various business functions of sales, manufacturing, purchasing, dist., financial management and human resources are integrated through the use of computer programs; also called enterprise software.
- private warehouse
- ⬢owned and operated by the firm whose products are being stored and handled by the facility
- public warehouse
- ⬢an independent firm that provides storage and handling facilities for individuals or companies for a fee
- distribution center
- •a facility that has under 1 roof an efficient, fully integrated system for the flow of prod.—taking orders, filling them, and preparing them for delivery to customers.
- containerization
- •a cargo-handling system which shipments of products are enclosed in large metal or wood receptacles that are then transported unopened from the time they leave the shipper’s facilities until they reach their destination.
- intermodal transportation
- ⬢use of 2+ modes of transportation to move a shipment of frieght
- one-stop shipping
- ⬢a transportation firm offers multiple modes of transportation of goods to its consumers
- freight forwarder
- ⬢specialized marketing institution that serves firms by consolidating less-than-carload or less-than-truckload shipments into carload or truckload quantities and arranging for door to door shipping service.
- package delivery firms
- ⬢companies that specialize in the delivery of small packages and high-priority mail.
- promotion
- all personal and impersonal efforts by a seller or the seller’s representative to inform, persuade, or remind a target audience.
- advertising
- All activities involved in presenting to an audience a nonpersonal, sponsor-identified, paid-for message about a product or an organization.
- sales promotion
- Demand-stimulating devices designed to supplement advertising and facilitate personal selling.
- Trade Promotion
- when sales promotion is directed to the members of the distribution channel.
- integrated marketing communication (IMC)
- a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive communications with an organization’s internal and external audiences.
- communication
- the verbal or nonverbal transmission of information between someone wanting to express an idea and someone else expected or expecting to get that idea.
- promotion mix
- an organization’s combination of personal selling, advertising, sales promotion, and public relations.
- push strategy
- Promotional efforts directed primarily at middlemen that are the next link forward in the distribution channel for a product.
- pull strategy
- Promotional effort directed primarily at end users so they will ask middlemen for the product.
- hierarchy of effects
- The stages a buyer goes through in moving toward a purchase, specifically awareness, knowledge, liking, preference, conviction, and purchase.
- viral marketing
- Strategy of spreading positive information about a company from one person to another, often utilized by smaller firms.
- weblogs
- Personalized websites that are frequently updated and linked to other sites. Same as blog.
- promotional budgeting methods
- The means used to determine the amount of dollars allocated to promotion in general and/or to specific forms of promotion.
- federal trade commission act
- A federal law, passed in 1914, prohibiting unfair competition and establishing the Federal Trade Commission
- Wheeler-Lea Amendment
- A federal law, passed in 1938, that amended the Federal Trade Commission Act by strengthening the prohibition against unfair competition, especially false or misleading advertising.
- Robinson-Patman Act
- A federal law passed in 1936 that was intended to curb price discrimination by large retailers and the granting by manufacturers of proportionally unequal promotional allowances to large retailers or wholesalers.
- Lanham Trademark Act
- A federal law passed in 1946 that made it illegal for organizations to make false claims about their own products.
- Trademark Law Revision Act
- A federal law passed in 1988 that broadened the Lanham Trademark Act to encompass comparisons made in promotional activity.
- Telephone Consumer Protections Act
- A federal law that requires telemarketers to keep a “do-not-call†list of consumers who request that they not receive telephone solicitations, it restricts the indiscriminant use of automatic telephone dialing systems, and it prohibits marketers from sending advertising to a facsimile machine without first obtaining the recipient’s permission.
- Printers' Ink statutes
- State legislation intended to punish “untrue, deceptive, or misleading†advertising.
- Green River ordinance
- Law that restricts door-to-door salespeople by requiring them to register and purchase a license.
- inside selling
- Situation where the customer comes to the sales person; includes retail stores and telephone order takers.
- outside selling
- The kind of personal selling group in which sales people go to the customers, making contact by mail, telephone, or face-to-face.
- selling center
- A group of people representing a sales department as well as other functional areas in a firm (such as finance, production, and research and development) that work cooperatively to achieve a sale. Sometimes called a sales team or team selling.
- systems selling
- Providing a total package of related goods and services to solve a customer’s problem (needs).
- global sales teams
- A type of personal selling where a team of sales people is responsible for all of its company’s sales to an account anywhere in the world.
- relationship selling
- An attempt by a sales person or organization to develop a deeper, longer-lasting relationship built on trust with key customers—usually larger accounts.
- Internet selling
- The offering of goods or services to customers over the Internet.
- Sales-force automation (SFA)
- A strategy of equipping sales people with laptop computers, cellular phones, fax machines, and pagers to give them access to databases, the Internet, and e-mail to help them manage accounts more effectively.
- personal selling process
- The logical sequence of prospecting, preapproach, presenting, and postsale services that a salesperson takes in dealing with a prospective buyer.
- AIDA
- A sequence of steps in various forms of promotion, notably personal selling and advertising, consisting of attracting Attention, holding Interest, arousing Desire, and generating buyer Action.
- methods of sales-force compensation
- The three types of compensation plans are straight salary, straight commission, and a combination plan.
- quantitative evaluation bases
- In sales-force evaluation, specific, objective criteria for appraising the performance of salespeople.
- qualitative evaluation bases
- In sales-force evaluation, subjective criteria for appraising the performance of salespeople.
- business-to-consumer advertising
- Advertising that is directed at consumers.
- primary-demand advertising
- Advertising that is designed to stimulate demand for a generic category of a product.
- selective-demand advertising
- Advertising that is intended to stimulate demand for individual brands.
- comparison advertising
- A form of selective-demand advertising in which an advertiser either directly (by naming a rival brand) or indirectly (through inference) points out the differences among competing brands.
- product advertising
- Advertising that focuses on a particular product or brand.
- institutional advertising
- Advertising that presents information about the advertiser’s business or tries to create a favorable impression—build goodwill—for the organization.
- advertising campaign
- All the tasks involved in transforming a theme into a coordinated advertising program to accomplish a specific goal for a product or brand.
- cooperative advertising
- Advertising promoting products of two or more firms that share its cost.
- advertising media
- The communications vehicles (such as newspapers, radio, and television) that carry advertising as well as other information and entertainment.
- cost per thousand (CPM)
- The media cost of gaining exposure to 1,000 persons with an ad.
- direct tests
- Measuring or predicting the sales volume attributable to a single ad or an entire advertising campaign.
- indirect tests
- Measuring or predicting the effects of advertising by using a factor other than actual behavior.
- advertising agency
- An independent company that provides specialized advertising services and may also offer more general marketing assistance.
- public relations
- Communications efforts that are designed to favorably influence attitudes toward an organization, its products, and its policies.
- publicity
- A special form of public relations that involves any communication about an organization, its products, or its policies through the media that is not paid for by the sponsoring organization.