Chapter 14&15 exam review Flashcards
all the activities associated with the flow and transformation of production from raw materials through to the end consumer
Supply Chain
(sometimes called operations management ) involves the processes used to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information
procurement
concerned with what materials a firm needs and where materials come from
Logistics management
is the act of negotiating and executing transactions to buy and sell goods, materials, and services
Supply Management
converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products
Recycling
planning, implementing and controlling the efficient and effective flow and storage of products and information from the point or origin to consumption
Supplier
a set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products and produced and distributed in the right quantities, the right locations and at the right time
Supply-Chain Management
a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
Marketing Channel (channel of distribution, distribution channel)
middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangement or through the purchase and reselling of products
marketing intermediaries
having products available when the customer wants them
time utility
making products available in locations where customers wish to purchase them
Place utility
customers have access to the product to use now or store for future use
Possession Utility
formed by assembling, preparing, or otherwise refining the product to suit customer needs
Form Unity
an independent business that takes title to products and carries inventories
industrial distributor
an independent businessperson who sells complementary products and is compensated by commissions
Manufacture Agents
the use of two or more marketing channels to distribute the same product to the same target market
dual distribution
The products of one organization are distribute the same product to the same target market
Strategic Channel Alliance
delivering content through the internet to a computer or other devices
digital distribution
customer market or business market?; business customers often prefer to deal directly with procedures; are more likely to buy complex products and in large quantities
- Customer Characteristics
complex/expensive or standardized?; durable or fragile?
- Product Attributes
large or small
large firms are often in a better position to have more distributions centers, which reduce delivery times
smaller firms may be in a better position to serve smaller-scale regional needs
3.Type of Organizations
high or low
highly competitive markets require companies to keep costs and prices low
- Degree of competition
economic considerations will force organizations to make compromises
technology may help a firm modify/ improve its channel strategy
government regulations and trade agreements can affect channel strategy
Environmental Forces
if an intermediary is not adequately promoting an organization’s products, it may reconsider channel choices
characteristics of intermediaries
what are the 3 types of intensities of market coverage
intensive, selective distribution, exclusive
uses all available outlets to distribute a product
for most convenience products
multiple channels may be used
Intensive
uses only some available outlets to distribute a product
for shopping products
desirable when a special effort is important to customers
Selective distribution
uses a single outlet in a fairly large geographic area
for products purchased infrequently, consumed over a long period of time, or requiring service and information
only authorized dealers are used
Exclusive
supply chains can provide a competitive advantage for many marketers
supply chain decisions cut across all functional areas of a business
an effective and efficient supply chain can sustain a business in a variety of competitive environments
Competitive Priorities in Marketing Channels
the dominant leader of a marketing channel or supply chain; may be a producer, wholesaler, or retailer
Channel Captain (Channel Leader)
the ability of one channel member to influence other channel members’ goal achievements
Channel Power
vital if each channel member is going to gain something from the others
Cooperation
channel cooperation enables retailers, wholesalers, suppliers, and logistics providers do what 3 things?
1) speed up inventory replenishment
2) Improve Customer service
3) Cut the costs of bringing products to customers
self interest creates misunderstanding about role expectations of channel members
communication is poor between channel members
there is increased use of multiple channels has increased the chance for miscommunication and conflict
Channel Conflict
combines two or more stages of the marketing channel under one management
Vertical Channel Integration
a single channel member coordinates or manages channel activities to achieve low-cost distribution aimed at satisfying target market customers
Vertical Marketing Systems (VMSs)
combines organizations at the same level of operation under one management
creates economics of sale
Horizontal marketing
activities used to move products from producers to consumers and other end users
Physical Distribution (logistics)
the contracting of physical distribution tasks to third parties; most distribution activities can be outsourced to firms with expertise in specific areas
Outsourcing
the time needed to complete a process
cycle time
the receipt and transmission of sales order information
order processing
what are the 3 main tasks of order processing
order entry, order handling, order delivery
begins when customers place orders
order entry
product availability and customer credit-worthiness is verified; order assembly occurs
order handling
delivery is scheduled with a carrier
order delivery
a computerized means of integrating order processing with production, inventory, accounting and transportation
Electronic Data Interchange (EDI)
developing and maintaining an adequate assortment of products to meet customers’ needs
inventory management
shortages of products that can result in loss of customers
stockouts
the inventory level that signals the need to place a new order
Reorder Point
the average time lapse between placing the order and receiving it
order lead time
the rate at which inventory is used/sold
usage rate
the extra inventory a firm keeps
Safety Stock
Reorder point=
(order lead time X usage rate) + safety stock
an inventory-management approach in which supplies arrive just when needed for production or resale
Just-in-time (JIT)
the physical handling of tangible goods, supplies and resources; also involves transportation from points of production to points of consumption
Materials Handling
can reduce costs, the number of times a good is handled, improve customer service and increase customer satisfaction
efficient materials handling
radio waves are used to track materials using scanners
radio frequency ID
the design and operation of facilities for storing and shipping products
Warehousing
3 types of warehouses:
Private, public, distribution centers
Company-operated facilities for storing and shipping products
Private Warehouses
Storage space and related to physical distribution facilities that can be leased by companies
Public Warehouses
Large, centralized warehouses that focus on moving rather than storing goods
Distribution Centers
the movement of products from where they are made to intermediaries and end users; the most expensive physical distribution function
Transportation
5 Basic Transportation modes:
Railroads Trucks Waterways Airways Pipelines
two or more transportation modes are used in combination
Intermodal Transportation
organizations that consolidate shipments from several firms into efficient lot sizes
Freight Forwarders
freight transportation firms that provide several modes of shipment
Megacarriers
runs the risk of being viewed as anti-competitive
dual distribution
courts have conflicting opinions on restricting intermediaries to certain sales territories
restricted sales territories
a supplier furnishes a product to a channel member with the stipulation that the channel member purchases other products
Tying Agreement
a manufacturer forbids an intermediary to carry products of competing manufacturers
Exclusive dealing
producers have the right to choose channel members
Refusal to deal
all the transaction in which the buyer intends to consume the products through personal, family, or household use; can occur in stores, through direct selling, vending machines, and online
Retailing
an organization that purchase products for the purpose of reselling them to ultimate customers
Retailer
2 major types of retailers
General-Merchandise Retailers, Specialty Retailers
offer a variety of product lines, stocked in considerable depth
General-merchandise retailers
9 types of general-merchandise retailers
department stores, discount-stores, extreme-value stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, warehouse showrooms
large retail organizations with wide product mixes; employ at least 25 people ex: Macy’s, Sears, J.C. Penney
Department Stores
self-service, general merchandise outlets that regularly offer brand name and private brand products at low prices ex: walmart, kmart, target
Discount-Store
Retailers that are a fraction of the size of conventional discount stores ex:dollar tree
extreme-value stores
small self-service stores that are open long hours and carry a narrow assortment of products, usually convenience items, as well as services such as ATMs ex: 7/11 , circle K
Convenience Store
large self-service stores that carry a complete line of food products as well as some nonfood products ex: Kroger, Safeway, Publix
Supermarkets
giant retail outlets that carry products ordinarily found in supermarkets, but also routinely purchased consumer products ex:Walmart supercenter
Superstores
combine supermarket and discount store shopping in one location ex:carrefore
Hypermarkets
large-scale, members-only selling operations combining cash-and-carry wholesaling and discount retailing. ex: sams club, costco
Warehouse clubs
retail facilities in large, low-cost buildings with warehouse materials-handling technology, verticle merchandise displays, large on-premises inventories, and minimal services. ex:ikea
Warehouse Showrooms
3 types of specialty retailers
traditional specialty retailers, category killers, off-price retailers
carry a narrow product mix with deep product lines. They are sometimes called “limited-line retailers”
Traditional Specialty Markets
a very large specialty store concentrating on a major product category and competing on the basis of low prices and product availability
Category Killers
buy manufacturer’s seconds, overruns, returns and off-season production runs at below-wholesaler prices for resale to consumers at deep discounts
Off-Price Retailers
the least flexible of the strategic retailing issues, but very important
location of retail stores
factors affecting the retail store location are
location of intended target market
kinds of products sold
availability of transportation and ease of movement to/from site
competitors’ locations
Freestanding structures, shopping malls and centers, and business districts are all
types of locations
usually consist of several small convenience and specialty stores
Neighborhood centers
contain one or two department stores, some specialty stores and convenience stores
community shopping centers
feature the largest department stores, widest among product mixes and deepest product lines of all shopping centers
regional shopping centers
contain the widest and deepest product mixes
superregional shopping centers
typically open-air and feature upscale stores
lifestyle shopping centers
combine off-price stores with category killers
Power shopping centers
an arrangement in which a supplier or franchiser, grants a dealer, or franchisee, the right to sell products in exchange for some types of consideration
franchising
identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of the consumers in that segment
retail positioning
projecting a functional and psychological picture that appeals to the target market
Store Image
The physical elements in a store’s design that appeal to consumers’ emotions and encourage buying
Atmospherics
storefront, displays, entrances
exterior atmospherics
lighting, wall and floor coverings, store fixtures
interior atmospherics
a retail strategy of managing groups of similar, often sustainable, products produced by different manufacturers
Category management
the use of telephone, internet and nonpersonal media to communicate product and organizational information to customers
Direct marketing
the selling of products outside the confines of a retail facility
Nonstore retailing
occurs when an organization provides a catalog from which customers make selections and place orders via mail, telephone, or the internet
catalog marketing
occurs when a retailer advertises a product and makes it available through mail or telephone orders
direct response marketing (Scholastic marketing)
the performance of marketing-related activities by telephone; can help generate sales leads, improve customer service, accelerate payments on past-due accounts, rais funds for nonprofit organizations and gathering marketing data
Telemarketing
makes products available through computer connections
Online retailing
it is the marketing of products to ultimate consumers through face-to-face at home or in the workplace
Direct Selling
The use of machines to dispense products selected by customers
Automatic Vending
all transactions in which products are bought for resale, for making other products, or for general business operations
Wholesaling
an individual or organization that sells products which are bought for resale, for making other products, or for general business operations
wholesaler
wholesalers serve as an extension of the products sales force and act as a conduit of information
provides financial assistance
reduces a producer’s warehousing expenses and inventory investment by holding goods in inventory
can be a source of working capital
Services Provided by Wholesalers: To Producers
assist with marketing strategy, especially distribution
help retailers select inventory
are often specialists on market conditions and experts at negotiating final purchases
can reduce a retailer’s burden of looking for and coordinating supply sources
Services provided by wholesalers: to retailers
independently owned businesses that take title to goods, assume risks associated with ownership and generally buy and resell products to other wholesalers, business customers, and retailers
Merchant Wholesalers
perform the wildest possible range of wholesaling functions; handle either consumer or business products and provide various marketing services to their customers
full-service wholesalers
carry a wide product mix but offer limited depth within product lines
general-merchandise wholesalers
carry few product lines but offer and an extensive assortment of products within those lines
Limited-Line Wholesalers
offer the narrowest range of products
specialty-line wholesalers
full service, specialty-line wholesalers that own and maintain display racks in supermarkets, drugstores, and variety stores
Rack Jobbers
provide fewer marketing services than full-service wholesalers and specialize in just a few functions, passing on the rest of the functions to customers or other intermediaries
limited-service wholesalers
intermediaries whose customers pay cash and furnish transportation
cash-and-carry wholesalers
transport a limited line of products directly to customers for on-the-spot inspection and selection
Truck wholesalers
take title to goods and negotiate sales but never take actual possession of products
Drop Shippers
use catalogs instead of sales forces to sell products to retail and business customers
Mail-order
intermediaries temporarily employed by buyers or sellers in order to unite buyers and sellers
Brokers
represent either buyers or sellers on a permanent basis
Agents
independent intermediaries who represent sellers and usually offer customers complete product lines
manufacturers’ Agents
market either all of a specified product line or a manufacturers’ entire output; perform every wholesaling function except taking title of product
selling agents
receive goods on consignment from local sellers and negotiates sales in large, central markets
Commission Merchants
manufacturer-owned intermediaries that sell products and provide support to the manufacturers’ salesforce
Sales Branches
manufacturer-owned operations that provide services normally associated with agents
sales offices
