Chapter 15 Flashcards
Supply chain
All the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer
Supply chain management
The management of flows among firms in the supply chain to maximize total profiatbility
Insourcing
A practice in which a company with a specialist firm to handle all or part of its supply chain operations
Channel distribution
The series of firms or individuals that facilitates the movement of a product from the producer to the final customer
Channel intermediaries
Firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user. An older term for intermediaries is middlemen
Breaking bulk
Dividing larger quantities of goods into smaller lots in order to meet the needs of buyers
Creating assortments
Providing a variety of products in one location to meet the needs of buyers
Facilitating functions
Functions of channel intermediaries that make the purchase process easier for customers and manufacturers
Disintermediation (of the channel of distribution)
The elimination of some layers of the channel of distribution in order to cut costs and improve the efficiency of the channel
Knowledge management
A comprehensive approach to collecting, organizing, storing, and retrieving a firm’s information assets.
Online distribution piracy
The theft and unauthorized repurposing of intellectual property via the Internet
Wholesaling Intermediaries
Firms that handle the flow of products from the manufacturer to the retailer or business user
Independent intermediaries
Channel intermediaries that are not controlled by any manufacturers but instead do business with many different manufacturers and many different customers
Take title
To accept legal ownership of a product and assume the accompanying rights and responsibilities of ownership
Full service wholesalers
________________ provide a wide range of services for their customers, including delivery, credit, product-use assistance, repairs, advertising, and other promotional support–even market research. They often have their own sales force to call on businesses and organizational customers. Some general merchandiser wholesalers carry a large variety of different items, whereas specialty wholesalers carry an extensive assortment of a single product line.
Limited-service merchant wholesalers
In contrast, _______ provide fewer services for their customers. They also take title to merchandise but are less likely to provide services such as delivery, credit, or marketing assistance to retailers
Cash-and-carry wholesalers
__________ provide low-cost merchandise for retailers and industrial customers that are too small for other wholesalers’ sales representatives to call on.
Truck jobbers
________________ carry their products to small business customer locations for their inspection and selection, They often supply perishable items.
Drop shippers
_______ are limited-function wholesalers that take title to the merchandise but never actually take possession of it. They take orders from and bill retailers and industrial buyers, but the merchandise is shipped directly from the manufacturer.
Mail order wholesalers
___________ sell products to small retailers and other industrial customers, often located in remote areas, through catalogs rather than a sales force. They usually carry products in inventory and require payment in cash or by credit card before shipment
Rack jobbers
________ supply retailers with specialty items such as health and beauty products and magazines. They get their name because they own and maintain the product display racks in grocery stors, drugstores, and variety stores.
Merchandise agents or Brokers
Channel intermediaries that provide services in exchange for commissions but never take title to the product
Manufacturers’ agents, or manufacturers’ reps
____________ or ________ are independent salespeople who carry several lines of noncompeting products. They have contractual arrangements with manufacturers that outline territories, selling prices, and other specific aspects of the relationship but provide little if any supervision. Manufacturers normally compensate agents with commission based on a percentage of what they sell.
Selling agents, export/import agents
_________, including ___________, market a whole product line or one manufacturer’s total output. They often work like an independent marketing department because they perform the same functions as full-service wholesalers but do not take title to products. Unlike manufacturer’s agents, selling agents have unlimited territories and control the pricing, promotion, and distribution of their products
Commission merchants
_________ are sales agents who receive goods, primarily agricultural products such as grain or livestock, on consignment–that is, they take possession of products without taking title. Although sellers may state a minimum price they are willing to take for their products, commission merchants are free to sell the product for the highest price they can get. Commission merchants receive a commission on the sales price of the product
Merchandise brokers
______________, including export/import brokers, are intermediaries that facilitate transactions in markets such as real estate, food, and used equipment, in which there are lots of small buyers and sellers. Brokers identify likely buyers and sellers and bring the two together in return for a fee they receive when the transaction is completed.
Sales branches
____________ are manufacturer-owned facilities that, like independent wholesalers, carry inventory and provide sales and service to customers in specific geographic area. We find sales branches in industries such as petroleum products, industrial machinery and equipment, and motor vehicles
Sales offices
____________ are manufacturer-owned facilities that, like agents, do not carry inventory but provide selling functions for the manufacturer in a specific geographic area. Because they allow members of the sales force to locate close to customers, they reduce selling costs and provide better customer service.
Manufacturer’s showrooms
_________ are manufacturer-owned or leased facilities in which products are permanently displayed for customers to visit. Merchandise marts are often multiple buildings in which one or more industries hold trade shows and many manufacturers have permanent showrooms. Retailers can visit either a show or all year long to see the manufacturer’s merchandise and make business-to-business purchases.
Channel levels
The number of distinct categories of intermediaries that populate a channel of distribution.
Hybrid marketing system
A marketing system that uses a number of different channels and communication methods ti serve a target market
Slotting allowance
A fee paid in exchange for agreeing to place a manufacturer’s products on a retailer’s valuable shelf space
Develop Distribution Objectives
The first step in distribution planning
Evaluate Internal and External Environmental Influences
The second step in distribution planning
Choose a distribution strategy
The third step in distribution planning
Develop distribution tactics
The fourth step in distribution planning
Conventional marketing system
A multiple-level distribution channel in which channel members work independently of one another
Vertical Marketing System
A channel of distribution in which there is formal cooperation among members at the manufacturing, wholesaling, and reailing levels
Administered VMS
In an ________, channel members remain independent but voluntarily work together because of the power of a single channel member. Strong brands are able to manage this because VMS resellers are eager to work with the manufacturer so they will be allowed to carry the product
Corporate VMS
In _________, a single firm owns manufacturing, wholesaling, and retailing operations. Thus, the firm has complete control over all channel operations.
Contractual VMS
In a __________, cooperation is enforced by contracts (legal agreements) that spell out each member’s rights and responsibilities and how they will cooperate. This arrangement means that the channel members can have more impact as a group than they could alone.
Selective distribution
Distribution using fewer outlets than intensive distribution but more than exclusive distribution.
Channel Leader
A firm at one level distribution that takes a leadership role, establishing operating norms and processes based on its power relative to other channels
Logistics
The process of designing, managing, and improving the movement of products through the supply chain. It includes purchasing, manufacturing, storage, and transport.
Physical distribution
The activities that move finished goods from manufacturers to final customers, including order processing, warehousing, materials handling, transportation, and inventory control.
Order Processing
The series of activities that occurs between the time an order comes into the organization and the time a product goes out the door
Enterprise Resource Planning (ERP) systems
A software system that integrate information from across the entire company, including finance, order fulfillment, manufacturing, and transportation and then facilities sharing of the data throughout the firm
Warehousing
Storing goods in anticipation of sale or transfer to another member of the channel of distribution
Materials handling
The moving of products into, within, and out of warehouses
Transportatoin
The mode by which products move among channel members
Dependability
The ability of the carrier to deliver goods safely and on time
Cost
The total transportation costs to move a product from one location to another, including any charges for loading, unloading, and in-transit storage
Speed of delivery
The total time to move a product from one location to another, including loading and unloading
Accessibility
The number of different locations the carrier serves
Capability
The ability of the carrier to handle a variety of different products such as large or small, fragile, or bulky
Traceability
The ability of the carrier to locate goods in shipment
Inventory control
Activities to ensure that goods are always available to meet customers’ demands
Radio Frequency Identification (RFID)
Product tags with tiny chips containing information about the item’s content, origin, and destination
Just in time (JIT)
Inventory management and purchasing processes that manufacturers and resellers use to reduce inventory to very low levels and ensure that deliveries from suppliers arrive only when needed
Perfect order measurement
A supply chain metric that tracks multiple steps in getting a product from a manufacturer to a customer
