Chapter 15

Question 1

What is supply chain management

Answer 1

A set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels their customers require.

Question 2

What is the difference between direct and indirect marketing channels

Answer 2

Direct channels
Consumer buys directly from the producer

Indirect channels
Consumer buys from an intermediary (retailer)

Question 3

What are the 3 channel members and how do they add value

Answer 3

*suppliers, manufacturers, and retailers

Channels make buying easier for customers:
Use a distributor to sell the customers

Channel members perform valuable function:
Information, promotion, contact, matching, negotiation, physical distribution, financing, risk taking

Channel members add value:
Intermediaries offer producers greater efficiency and they offer customers more than the firm could achieve on its own through contacts, experience, specialization, and scale

Question 4

What makes a good relationship within the world of marketing

Answer 4

Mutual trust
Belief that partner is honest, reliable, and values your success

Open communication
Shares strategies and problems

Common goals
Incentive to cooperate

Interdependence
Recognizing it sustains relationship

Credible commitments
Spending money on the partnership

Question 5

What is a vendor managed inventory

Answer 5

Manufacturer is responsible for resellers inventory levels. Resellers share real-time inventory data with the supplier via EDI. Manufacturer replenishes inventory in qualities that meet retailers immediate demands. Can reduce vendors and retailers’ costs

Question 6

What is the difference between distribution centers and fulfillment centers

Answer 6

Distribution center
A facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists.

Fulfillment center
Warehouse facility used to ship merchandise directly to customers.

Question 7

What is a wholesaler

Answer 7

Firm engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users

Question 8

What is VMS and what are the 3 types of vertical marketing systems (VMS)

Answer 8

vertical marketing systems:
Provides channel leadership, producers, wholesalers, and retailers act as a unified system

1. Corporate marketing systems
   Single ownership (tesla)
2. Contractual marketing system
   Bound together by contracts (franchisers)
3. Administered marking systems
   Leadership based on size and power (Walmart)

Question 9

What is a radio frequency identification tag (RFIT)

Answer 9

Tiny computer chip that automatically transmits to a special scanner all the information about a container’s contents or individual products.

Question 10

What is a “Just in time inventory system” JIT

Answer 10

Inventory management system designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise “just in time” for it to be used in the manufacture of another product, in the case of parts or components, or for sale when the customer wants it, in the case of consumer goods