Chapter 13 Flashcards
(29 cards)
Channel of distribution (marketing channel)
A sequence of marketing organizations that directs a product from the producer to the ultimate user.
Middleman (marketing intermediary)
A marketing organization that links a producer and user within a marketing channel:
> Merchant middleman—takes title to products by buying them.
> Functional middleman—helps in the transfer of ownership of products but does not take title to the products.
>
Retailer—buys from producers or other middlemen and sells to consumers
Wholesaler middleman—sells products to other firms.
Producer to consumer (direct channel)
- No intermediaries.
- Used by all services and by a few consumer goods
- Producers can control quality and price, do not have to pay for intermediaries, and can be close to their customers.
Producer to retailer to consumer
- Producers sell directly to retailers when retailers (Walmart) can buy in large quantities.
- Most often used for bulky products for which additional handling would increase selling costs, and for perishable or high-fashion products that must reach consumers quickly.
Producer to wholesaler to retailer to consumer
- The traditional channel.
- Used when a producer’s products are carried by so many retailers that the producer cannot deal with them all.
Producer to agent to wholesaler to retailer to consumer
- Agent—functional middlemen that do not take title to products and are compensated by commissions paid to the producers.
- Often used for inexpensive, frequently purchased items, for seasonal products, and by producers that do not have their own sales forces.
A manufacturer may use multiple channels
- To reach different market segments.
> When the same product is sold to consumers and businesses. - To increase sales or capture a larger market share
Producer to business user
- Usually used for heavy machinery, airplanes, major equipment.
- Allows the producer to provide expert and timely services to customers.
Market coverage
=> Intensive
The use of all available outlets for a product to saturate the market.
- Convenience products - coke, Pringles
- Available in many retail outlets
=> Selective
The use of only a portion of the available outlets for a product in each geographic area.
- Shopping products such as DVD, shoes
- available in some retail outlets
=> Exclusive
The use of only a single retail outlet for a product in a larger geographic area.
- Specialty products - BMW, Fendi
- available in few outlets
Wholesalers
=> Justifications for marketing intermediaries
- Intermediaries perform essential marketing services.
- Manufacturers would be burdened with additional record keeping and maintaining contact with numerous retailers.
- Costs for distribution would not decrease and could possibly increase due to the marketing inefficiencies of producers.
Independent retailer
A firm that operates only one retail outlet.
Chain retailer
A company that operates more than one retail outlet.
Department store
A retail store that:
- Different sections under one roof
- Sells at least home furnishing, appliances, family apparel, and household linens and dry goods, each in a different part of the store
Discount store
A self-service, general-merchandise outlet that sells products at lower-than-usual prices.
Warehouse showroom
A retail facility in a large, low-cost building with large on-premises inventories and minimal service.
Convenience store
A small food store that sells a limited variety of products but remains open well beyond normal business hours.
Supermarket
A large self-service store that sells primarily food and household products.
Superstore
A large retail store that carries not only food and nonfood products ordinarily found in supermarkets but also additional product lines.
Traditional specialty store
A store that carries a narrow product mix with deep product lines.
Category killer
A very large specialty store that concentrates on a single product line and competes on the basis of low prices and product availability.
Types of non-store retailing
A type of retailing whereby consumers purchase products without visiting a store
=> Direct selling
The marketing of products to consumers through face-to-face sales presentations at home or in the workplace.
=> Direct marketing
The use of the telephone, Internet, and non-personal media to introduce products to customers, who can then purchase them via mail, telephone, or the Internet.
=> Catalog marketing
An organization provides a catalog from which customers make selections and place orders by mail, telephone, or the Internet.
=> Direct-response marketing
A seller advertises a product and makes it available, usually for a short time period, through mail, telephone, or online orders.
=> Telemarketing
The performance of marketing-related activities by telephone
=> Television home shopping
Products are presented to television viewers, who can buy them by calling a toll-free number and paying by credit card.
=> Online retailing
Makes products available to buyers through computer connections.
=> Automatic vending
The use of machines to dispense products.
Integrated Marketing Communications
Coordination of promotion efforts to ensure maximal informational and persuasive impact on customers
Results in a consistent message to customers, long-term customer relationships, and the efficient use of promotional resources
- Mass media advertising has given way to targeted promotional tools (e.g., cable TV, direct mail, and the Internet)
- The overall cost of marketing communications has risen significantly, pressuring managers to make the most efficient use of marketing resources
Promotion
Commonly the object of two misconceptions
- Promotional activities make up the entire field of marketing
- Promotional activities are unnecessary and cause higher prices
=> Role of promotion
To facilitate exchanges directly or indirectly by informing individuals, groups, or organizations and influencing them to accept a firm’s products or to have more positive feelings about the firm
> Convey product and service information directly to target market segments
> Provide information to interest groups, regulatory agencies, investors, and the general public
- To maintain positive relationships between a company and various groups in the marketing environment
Promotion Mix
The particular combination of promotion methods a firm uses to reach a target market
=> Advertising
A paid non-personal message communicated to a select audience through a mass medium
=> Personal selling
Personal communication aimed at informing customers and persuading them to buy a firm’s products
=> Sales promotion
The use of activities or materials as direct inducements to customers or salespersons
=> Public relations
Communication activities used to create and maintain favorable relations between an organization and various public groups, both internal and external
