Define:

Marketing Channel

Define:

Supply Chain Management

- long term partnerships among marketing channel members that:

1. reduce inefficiencies

2. contain cost

3. redundancies in the marketing chain

Define:

Marketing Intermediary

Define:

Discrepancies of Quantity

Define:

Discrepancies of Assortment

1. Accumulating

2. Bulk-Breaking

3. Sorting

4. Assorting

Define:

Accumulating

- collecting products from many small producers

(assemblers)

Define:

Bulk-Breaking

Define:

Sorting

Define:

Assorting

Define:

Intensive Distribution

1. Appropriate for convenience products, with high turn over(replacement rate)

2. provides availability and reduces search time

3. selling through all responsible and suitable intermediaries who will stock and sell the product

Define:

Selective Distribution

- desirable when special effort and attention- such as customer service- is important

- appropriate for shopping products and durable goods with lower turnover (replacement rates)

- middlemen

1. they have poor credit

2. make too many returns

3. require too much service

4. place only small orders

5. can't or won't do a satisfactory job

1. less expensive than intensive distribution

2. better cooperation among channel members

Define:

Exclusive Distribution

1. Corporate Channel Systems

2. Administered Channel Systems

3. Contractual Channel Systems

Define and Explain:

Corporate Channel Systems

- corporate ownership all along the channel

- often involves vertical integration

ex. Sherwin-Williams

Define and Explain:

Administered Channel Systems

- informal agreements among channel members

- control maintained through economic power and leadership

ex. GE, Wal-Mart

Define and Explain:

Contractual Channel Systems

- legal contracts among channel members

ex. McDonald's, GM, IGA

Define:

Physical Distribution

- Also called Logistics

- activities used to move products from producers to consumers and other end users

1. order processing

2. material handeling

3. transportation

4. inventory management

5. warehousing

Define:

Outsourcing

What has the Highest Proportional Cost for Distribution?

What has the Lowest Proportional Cost for Distribution?

Highest:

- Transportation

Lowest:

- Administration

- Transportation: 48%

- Warehousing/Material Handeling: 19%

- Inventory Management:  23%

- Order Processing/Customer Service: 6% 

- Administration: 4% 

Define:

Order Processing

1. order entry

2. order handling

3. order delivery

Define:

Electronic Data Interchange (EDI)

Define:

Inventory Management

Define:

Stock Outs

Define:

Just-in-Time

Define:

Materials Handling

Define:

Unit Loading

- one or more boxes of product are placed on a pallet and handled by mechanical means

ex. fork lift

Define:

Containerization

Define:

Warehousing

1. enables compensation for dissimilar production and consumption rates

2. helps stabilize prices and availability of seasonal items

1. Public

2. Private

3. Distribution Centers

- marketers lease storage space and related physical distribution facilities to other firms

- bonded storage

Define:

Transportation

1. Railroads

2. Trucks

3. Waterways

4. Airways

5. Pipelines

- heavy, bulky full carloads of freight

- damage in transit, and transportation is needed to/from tracks

- flexible schedules, speed and access

- unforeseen delays, impact customer's satisfaction (route/tracking technology)

- heavy, low-value nonperishables

- security and theft, seasonal in major markets (freezing of water)

- fast delivery, high-value or perishable goods

- high cost

What are pipelines used for in transportation?

What are the concerns?

- bulk petroleum and chemicals

- very specialized

Define:

Intermodal Transportation

Name 3 modes of intermodal transportation?

What modes do they combine?

1. Piggyback

- combine rail with trucks

2. Fishyback

- combine water with trucks

3. Birdyback

- combine air with trucks

Define:

Reverse Channels of Distribution

- recall of unsafe products

- return of products from incorrectly filled orders

- return of products under warranty

- return of products customers order in error

- return of products customers order online

- return of products to be recycled (bottles, etc.)

1. Product

2. Price

3. Promotion

4. Place

5. Personnel

6. Presentation

- a viable target market for...

1. the present

2. the future

Retail Strategic Marketing:

The Product

- Retailers must have:

-  the right product, at the right time, in the right amounts

- the appropriate width (assortment) of products, and depth (different brands)

- the appropriate mix of national brands, designer brands, and private labels

Retail Strategic Marketing:

The Pricing

- The customer...

- compares pricing and shops between competing forms of retailers for many products

- needs to be focused on best value instead of searching for lowest cost of a product within a major product category

Retail Strategic Marketing:

The Promotion

- Includes...

- advertising, public relations, and sales promotion for traffic

- experimenting with new media and changing mixes of promotions to most effectively reach the customer

- increased used of direct/electronic mail, catalogue programs, frequent shopper plans, electronic promotions

Retail Strategic Marketing:

The Place

- the key to successful in-store retailing is location, location, location!!!

- choose a community based on level of economic growth, amount of competition, and geography

- shopping centers come in various sizes, from the small strip cluster to enormous super-regional centers containing over 850 stores

Retail Strategic Marketing:

The Personnel

- all retailers, including self service retailers, are emphasizing the importance of knowledgeable and friendly sales personnel

- personnel shortages, low wages, and a low image have made it difficult for retailers to attract and retain qualified sales personnel

- this difficult situation will become an increasing problem in the coming years

1. Trading Up

- upselling

2. Suggestive Selling

Retail Strategic Marketing:

- The Presentation

- relates to the visual impact of a store on customers and the ability to generate high sales per square foot

- retailers must think of their stores as a stage supporting the atmospherics and theme of the store and the message it is trying to convey

What are the determinants of a Store's Atmosphere?

- the appeal to emotions and encourage buying

1. employee type & density

- skills, appearance, quantity on hand

2. merchandise type & density

- quality, clutter

3. fixture type & density

- prevent theft

4. Sound

- type of sound/variety

5. Odors

- Fragrances and Restrooms

6. Visual Factors

- lighting (inside and out) , furnishings

- Department Stores

- Discount Stores

- Supermarkets

- trying to gain back market share from specialty stores

- stress services; turning to in-store boutique concept

- reduce prices and costs through consolidation and acquisitions

What are discount stores?

What are their current marketing strategies?

- mass merchandisers

- offer lower prices to get faster turnover and greater sale volume

- try appealing to larger markets

- They have 20-40k square feet

- and have 30k product items

- they are large stores specializing in groceries with self service and wide assortments

- scrambled merchanidising

- increased efficiency (offensive vs. defensive pricing)

- profits come from sales volume, not high markups

Define:

Scrambled Merchandising

- convert stores into one stop shopping centers

- generate more customer traffic

- realize higher profit margins

- increase impulse purchases

- carry all goods and services consumers purchase routinely

- carry 4x as many items as supermarkets

- sales volume is 2-3x that of supermarkets

- location, location, location

- up to 400k sq ft.

- 40-50% of space for groceries; remainder general merchandise

- lease space to non-competing businesses

- more successful in Europe and South America

- growth was fueled by sales to small business customers

- 60-70% general merchandise; grocery-related items make up the difference

- Club members tend to be more educated, affluent and have larger households

1. Traditional Specialty Retailers

2. Discounters (Category Killers)

3. Off-price Retailers

4. Extreme Value Retailers

- carry a narrow breadth product mix with more product lines

- also called "limited-line" and "single-line" retailers

- have higher costs and higher margins

- provide more product selection (first-line brands), product expertise and high levels of personal service

- also known as Category Killers

- they concentrate on a major product category and compete on the basis of low prices and product and assortment availability

- buy manufacturers seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts

* (usually paying cash without any return privileges)

- charge less than do department stores for comparable merchandise and offer few customer services

- have established long-term relationships with suppliers for continuing supplies of reduced-price goods

- TJ Maxx

- Stien Mart

- Burlington Coat Factory

- low prices build traffic and loyalty

* average transaction is under $10

* single-pricing-point helps create impulse purchases

ex. Dollar General

Dollar Tree

- added convenience and higher than conventional margins

- limited assortment food stores supplemented with "pick up or fill in items"

- often charge prices 10 to 30% higher than nearby supermarkets

- may also sell gas

Strategic Issues in Retailing:

-Retail Store Location

* Factors affecting Location

- intended target market

- kinds of products

- suitability of sit for customer access

- characteristics of existing retail operations

1. Free-Standing Structure

2. Shopping Malls and Centers

3. Traditional Business Districts

- automatic vending

- direct selling

- direct marketing

- electronic retailing

Define:

Direct Selling

Define:

Party Plans

Benefits:

1. personal attention to customer

2. convenience of time and place of presentation

Limitations:

1. high costs make it the most expensive form of selling

2. negative consumer view of direct selling

Define:

Direct Marketing

1. Direct Response

2. Catalogs & Mail Order

3. Telemarketing

Define:

Catalogue Marketing

Advantages and Disadvantages of:

Catalogue Marketing

Advantages:

- efficiency and convenience

marketer advantages are lower location, facility, selling, and operating costs

Disadvantages:

- inflexibility and limited selection and local service availability

Define:

Direct-Response Marketing

Define:

Telemarketing

- the performance of marketing-related activities by phone

-inbound vs. outbound

1. Shop-at-Home Networks

2. Online Retailers

1. Entertainment

2. Convenience & Efficiency

3. Customer Relation Management