Chapter 7: Place Flashcards
0
Q
What do you call how you get products to customers?
A
Distribution channel
1
Q
What is place also called?
A
Distribution
2
Q
What is a distribution channel?
A
Means of getting products to customers
3
Q
There are various functions a distribution channel needs to perform to be
A
Effective
4
Q
What are the types of functions of a distribution channel?
A
Transactional
Logistical
Facilitating
5
Q
What are the transactional functions?
A
Transfer of ownership
Taking risk
6
Q
What is the transfer of ownership?
A
Arranging for title of the goods to be transferred from producer to the customer
7
Q
The transfer of ownership differs for
A
Simple purchases
Complex products
8
Q
For simple purchases, the title is transferred when
A
Physical goods are passed over
9
Q
For complex products, what is required for the title to be handed over?
A
Formal processes by distributor
10
Q
Why do distributors take risk?
A
They buy in bulk from manufacturer
11
Q
To lessen risk, what do distributors have to do ?
A
Protect goods
12
Q
What kinds of risks do distributors face?
A
Spoilage
Obsolescence
13
Q
Spoilage of goods can be due to
A
Weather
Theft
Accidents
14
Q
What is obsolescence of goods?
A
Remaining products not sold off in time
Outdated
15
Q
What are the logistical functions performed by distributor?
A
Handling, storage, transportation
Sort, provide assortment, and grading
Providing pre and post sale service
16
Q
What are the locations a product goes through after manufacturing
A
Factory
Warehouse (other country)
Retailers
17
Q
The transportation of a product from factory to other counties is
A
Shipping
18
Q
What kind of products need to be handled specially?
A
Products with special product requirement
19
Q
Goods that have special requirements need what kind of handling?
A
Fragile handing
Refrigeration
Higher security
20
Q
What does the distribution channel need to ensure at the end of handling, storage and transporting?
A
Goods arrive at retail store in saleable condition
21
Q
When does sorting occur?
A
Product leaves the factory
22
Q
Why does the distribution channel is sort the product?
A
Separate and group them from other products
23
Q
When does providing assortment occur?
A
Before they reach the consumer
24
What is adding assortment also known as?
Giving more variety
25
How do distribution channels provide assortment?
Buy from other producers
26
Why is grading necessary?
defective products discarded
27
When do distribution channels need to provide pre-sales service?
Before consumers use product
28
What pre sales services do distribution channels provide?
Inspection for compatibility
Training courses
Installation services
29
What kind of post sales service do distribution channels provide?
Servicing and repairs for defects
30
What are the facilitating functions?
Providing information
Financing the product
Enhancing the attractiveness
31
For what kind of product do distribution channels need to provide information?
Complex
32
What kind of information can distribution channels provide?
Technical guidance
| Specific situational instructions
33
How do distribution channels provide information?
Consider carefully
Plan
Available sources to provide them
34
Why is providing information by distribution channels so important?
customers would feel dissatisfied
| Switch to buy from other companies
35
For simple products, information can be found
Pasted on label
Inserted into packaging
Download from the website
36
Why do distribution channels need to finance the product?
First payment to manufacturer
Different payment options
Payment plans
37
Why do distribution channels need to pay the manufacturer for the product first?
Take time for it to be sold to end customers
| From factory to retail outlets
38
Why are different payment options offered?
To make it easier for customer to own the product
39
What are the types of payment options?
Cash
NETS
Flashpay
40
Why are payment plans provided?
Products are costly and customers cannot pay in full
41
What are the payment plans?
Credit terms
| Installment
42
Why do distribution channels need to enhance the attractiveness of a product?
To make it more appealing to the customer
43
How do distribution channels enhance the attractiveness of a product?
```
Repackage
Add labels
Pretty carrier bags
Advertising banners, posters
Design retail display shelves or area
```
44
What are the members in the distribution channel also known as?
Intermediaries
| Middlemen
45
What are the members in the distribution channel?
Agents
Wholesalers
Retailers
46
Who do agents work for?
Acts of behalf of manufacturers
47
How are agents different from manufacturers?
They never take possession of the goods
48
What do agents do?
Assist in transfer of title of goods
| Provide services
49
What services do agents provide?
Credit
Shipping options
Advice
50
What are the two kinds of wholesalers?
Merchant wholesalers
| Licensed distributors
51
What do merchant wholesalers do?
Buy in bulk from manufacturers/agents
Takes title and possession of goods
Stores and transports them
Resells to retailers
52
What is the difference of a licensed distributor?
They are wholesales and retailers
53
What are the types of retailers?
Exclusive
Specialist
General-merchandise
Discount
54
What does an exclusive retailer sell?
products from one manufacturer or brand
55
What does a specialist retailer sell?
Selling products in a specialised category
56
What are general merchandise retailers?
Sell products from a mixture of categories
57
What do discount retailer sell?
Products from a mixture of categories
Do not carry specific products permanently
Rely on sourcing for cheaper merchandise to price at lower prices
58
What are the two broad categories of distribution channel designs?
Direct
| Indirect
59
How do manufacturers behave in direct distribution?
Go directly to consumers
| Without intermediaries
60
What is the advantage of direct distribution?
More control over how products are marketed
61
What is the disadvantage of direct distribution?
Incurs more cost
Fund all operations
Organisation of marketing activities
62
How does the manufacturer behave in indirect distribution?
Sells to consumers
| With the help of one or more levels of intermediaries
63
What is the advantage of indirect intermediaries?
Incur less cost
Cost is shared
Funds needed to operate
Organising of marketing activities
64
What is the disadvantage of indirect distribution?
Less control of how products are marketed
65
How many combinations are there for indirect distribution?
Many
66
The choice of channels can be categorized as?
Single
| Multiple
67
What is the advantage of single channel?
Less complexity
| Less potential conflict when scope overlaps
68
When is there a single channel?
When manufacturer takes on 1 alternative
69
When is there multiple channels?
When the manufacture takes on multiple alternatives
70
When do manufacturers use multiple channels?
Reach 2 or more markets
| Avoid complete dependency
71
How do companies reach 2 or more target markets with multiple channels?
Different service level
Different prices
Different customer segment
72
Why do companies avoid being too dependent on a single distribution arrangement?
Too limited to reach out to sufficient customers
73
What makes up a traditional distribution channel?
Firms that are independent
| Focused on its own interest
74
What are the downsides of traditional distribution channel?
Not effective channels
| Contributed to conflict (optimize their obj)
75
What is a VMS?
Vertical marketing system
76
How are members in a vertical marketing system?
Tightly coordinated
77
What are the advantages of VMS?
Operating efficiencies
| Marketing effectiveness
78
What are the types of VMS
Corporate
Administered
Contractual
79
When is it a corporate VMS?
Successive levels of a channel that are owned by one organisation
80
What is it an administered VMS?
One member in the channel has more power to dictate
81
When is it a contractual VMS?
Channel members enter into contracts based on how they want to distribute
82
What are the broad considerations in choosing the right distribution channel?
Market
Product
Middleman
Company
84
What are the market considerations?
Frequent & amount
Number of potential customers
Geographical concentration
85
What distribution is used for high frequent purchase pattern and large purchase amounts
Wide distribution
Indirect channels
Various intermediaries
86
When the number of potential customers (big in size purchase) are few, what distribution is required?
Great control on marketing
Direct channel
Or fewer intermediaries
VMS
87
What are the product considerations?
Unit value
Perishableness
Technically complexity
88
What is the distribution for high unit value products? Why?
Direct channel, fewer intermediaries
VMS
More control over marketing of product
89
For perishable products, what channel is better? Why?
Direct channel, fewer intermediaries
Reach end consumer quickly
90
Other than goods, what is considered perishable too?
Services
91
The higher the technical complexity, what is the distribution channel? Why?
Direct, or fewer intermediaries
More detailed knowledge required
Pre and post sales
92
What are the middlemen considerations?
Ability
| Availability
93
How is a middleman more able?
Provide marketing services that manufacturer cannot
| Or cannot do economically
94
When is a middleman available?
Intermediary engaged with competitive product (don't want to take up another line or brands)
Middleman have incompatible marketing policies
95
What are the company considerations?
Financial resources
Management ability
Channel control
96
The more financially stronger a manufacturer is, the
Less they depend on intermediaries
| Build their own direct channel
97
What is management ability is based on?
Marketing know how
98
If there is good marketing know how, what channel is better? Why?
Direct
VMS
More control
99
What are the products that require high channel control?
Fresh
Controlled prices
Follow strict promotional standards
100
Manufacturers that desire more control use what channel?
VMS
| Direct, shorter channels
101
What are the levels of intensity of distribution?
Intensive
Selective
Exclusive
102
What is the highest level of distribution?
Intensive
103
Where do manufacturers sell their product in intensive distribution?
Every available market outlet
104
When is an intensive level of distribution required or more effective?
Immediate satisfaction
Low value, bought frequently
Insignificant proportion of consumer life
105
What will the customer not do when the product is for immediate satisfaction?
Will not make special effort to purchase it
| Or defer purchase
106
When a product contributes insignificantly to a consumers life, what does it mean?
Used for a short time
| Inconspicuous
107
What type of products are intensively distributed?
Convenience products
108
When customers are geographically concentrated, what channel is required? Why?
Direct channel
More effective
109
Where does selective distribution fall?
In between exclusive and intensive
110
Through whom does the manufacturer sell at in selective distribution?
Multiple wholesalers and retailers in market
| Where customer can reasonably look for it
111
When is selective distribution used?
Shopping goods, mid to high value, not bought so frequently
Brand preference (effort to locate and purchase)
Significant proportion of consumers life
112
How is a product contributing significantly to a consumer's life?
Use a few hours
| Seen in public, conspicuous
113
Because a product contributes significantly to a persons life, how does he make a purchase?
Time and effort into purchase
Product searched online
Visit several retailers
114
How does a manufacturer sell in exclusive distribution?
Sell product through one wholesale or retailer in each market area
115
What is the 2-way exclusivity?
Middleman cannot sell directly competing product
116
What is the advantage of the exclusive distribution?
Manufacturer have more control over marketing
117
Why will retailer or dealer be cooperative in an exclusive distribution?
Future tied to success of product (only one)
| Aggressive promoting
118
When is exclusive distribution used?
```
Specialty products
Strong brand preference
Exceptionally high value
Bought infrequently
Significant contribution to persons life
```
119
Because there is strong brand preference for exclusive goods, what do customers do?
Spend a lot of time and effort
Researching
Talking to opinion leaders or salespeople
120
What are the different types of retailing?
```
Self service retailing
Convenience stores
Discount stores
In-store full service retailer
Automatic vending
```
121
What are the characteristics of self service retailers?
```
Big department stores
Many product lines
Minimum customer service
Low prices
Centralized checkouts
```
122
What are convenience stores?
```
Stores similar to supermarkets
Smaller in size
Carry a limited product range
Higher prices
Longer shopping hours
More convenient locations
```
123
What are discount stores?
Sell products below listed price
Advertise widely
Offer minimum customer service
124
What are in-store full-service retailers?
Offer wide variety of services
| Add to core product
125
In-store full service retailers provide services like?
```
Information
Advice
Fitting
Filling special orders (customazation)
Handling and delivery
Credit
```
126
What is automatic vending?
Through automatic vending machines
Coin operated
Payment through prepaid cards
Mobile phones
127
What kinds of products are sold in vending machines?
```
Low in value, low mark up
Sold higher than in stores
Well-known, familiar, trusted
Convenience goods
Small, uniform in size and weight
Limited amount of processing
```
128
What are the levels of service retailers can offer?
Self service
Limited service
Full service
129
What do customers do in self service?
Perform most of the functions themselves
| Nonessential services are eliminated
130
What is provided in limited service?
Essential services
Salespeople available in store
Financing and technical help
131
What are customers still expected to do in limited service stores?
Perform most of shopping tasks
132
Where do you have full-service retail stores?
Specialty stores
| Department stores
133
What do full-service stores provide?
Many services
134
What are the general considerations for choosing the type of distribution channel?
How customers want to buy?
Where customers want to buy?
When do customers want to buy?
What information, advice and service do customers need to make their choice?
What storage and transportation requirements will the product require to make it from factory to the retail store
