Module 9-12 Flashcards
(28 cards)
What is a distribution channel?
All activities involved in getting products from where they are made, to where customers purchase them
What are middleman?
Any intermediary between manufacturer & end-user
What are intermediates?
a chain between producers and consumers
What are two main goals of distribution?
Logistical
Moving products from manufacturers to end users
Strategic
Achieving logistics goal in such a way that: i) value is created for customers; and ii) advantage is gained over competitors
What are direct channels?
is straight to the consumer
What are indirect channels?
has to go to the middlemen before it gets to the consumer
Why are the channels of distribute efficient?
Reduce overall cost of market exchanges
Reduce search costs for customers
Maintain order in the marketplace
What is Intensive Distribution?
Using all available outlets to distribute a product.
What is Selective Distribution?
Using only some available outlets to distribute a product
What is Exclusive Distribution?
Single outlet in geographic area to distribute a product
What is Channel Integration?
Two or more stages of the channel under one
management. Channel members coordinate their
efforts to reach a target market.
What is wholesaling?
Transactions where products are bought for resale, for making other products, or for general business operations
What do wholesalers do?
facilitates & expedites wholesale transactions
Handles the physical distribution of goods
Furnishes channel information to facilitate & manage channel
What is retailing?
Final stage in a channel of distribution
All activities involved in sale of goods & services to final consumer for personal, family, or household use.
Retailing functions performed by any firm selling merchandise or providing services to final consumer.
What do retailers do?
Create strategic & attractive product mixes
Provide information
Store products, mark prices, & pay for goods & services
Conclude transactions with final consumers
Types of wholesalers?
Merchant Wholesalers
Brokers & Agents
Manufacturers’ & retailers’ branches & offices
What is the product mix?
Retail target marketing
Competitive differentiation
Staying relevant & attractive to customers
What is price?
Price Value exchanged for products in a marketing exchange
Why is price so important?
Most easily changed marketing mix tool
Symbolic value to customers
Affects revenue generation directly
What are two basic types of competition?
-Price Competition
Fast competitive response
Focused on matching or beating competitors’ prices
Lowest-cost firm will be most profitable.
Effective in markets with standardized products
However, price wars can hurt all firms.
- Non-price Competition
Branding, service, quality, etc., to differentiate products
Unit sales can be increased without changing price.
Effective when product features are difficult to imitate
Basis for long term loyalty
The Demand Curve tells us?
Shows the quantity of products expected to sell at various prices
Slopes down & to the right, showing that decreases in price lead to increases in quantities sold.
Increased demand = larger quantities sold at same price.
Prestige items sell best in higher price ranges.
What is price elastically of demand?
Price elasticity = measure of sensitivity of demand to changes in price—greater the change in demand for a specific change in price, the more elastic demand is:
What is a fixed cost?
cost that do not vary in the changes of units produced or sold
what is a variable cost?
cost that vary directly with changes in the number of units produced or sold
