Chapter 15: Distributing Products Flashcards
marketing intermediaries (middlemen)
organizations that assist in moving goods and services (B2B) and (B2C) (producer to businesses and business to consumer)
Ex: real estate agents
providing convenience
performing necessary activities such as storage and transportation
reducing the number of exchanges between producers and buyers
channel of distribution
whole set of marketing intermediaries (agents, brokers, wholesalers, retailers) who join together to transport or store goods and thus channel goods from producers to consumers
agents/brokers
bring buyers and sellers together and negotiate exchange of goods, but have no ownership over the product (to ponder: real estate)
wholesaler
sells, usually large quantities of goods at low prices, to other organizations such as manufacturers, hospitals, and retailers (B2B system)
**Selling products to specific stores so that each store has its own unique inventory
Selling products to a company for internal use in production is wholesaling.
Selling products to a school or hospital to run their business is considered a wholesale transaction
retailer
purchases from a manufacturer and then sells to ultimate consumers
utility
satisfies a want or need
form utility
juse of raw materials to form products
time utility
products are available when they are needed
place utility
products are placed where people want them
possession utility
transfer of ownership from one party to another (includes: providing credit, delivery, and installation)
information utility
two way flows between marketing participants
service utility
friendly service during and after the sale and providing customers with information on how to best use a product over time
merchant wholesalers
independently owned firms that take the title of gods they handle (ownership)
-full-service wholesalers: perform all distribution functions (maintain inventory, communicate advertising deals, transport good, provide capital, assume risk) -limited function wholesalers: perform select functions, but do them very well (rack jobbers, cash-and-carry wholesalers, drop shippers)
rack jobbers
furnish racks of shelves with merchandise and display products and keep them on consignment (have the title until the goods are sold and once they are, they share profits with the retailer)
Cash-and-carry wholesalers
serve smaller retailers with limited assortment of products (retialers pay these wholesalers in cash and afterwards take the products to their stores)
Drop shippers*
merchandise shipped directly from a producer to a buyer and solicit order from retailers/wholesalers (tend to handle bulky products like coal, lumber, and chemicals)
Intensive distribution
products are placed in as many retail outlets as possible and are considered wide-scale convenience goods like candy
Selective distribution:
Uses a preferred group of available retailers in an area to ensure
Quality of goods and services
Exclusive distribution
Only one retailer outlet in a given geographic area (retailers have exclusive rights to sell the product, carry a large inventory, and give exceptional service) monopoly? (example: skydiving equipment)
non store retailing
self-explanatory
Online retailing
selling goods and services to the ultimate customer online
telemarketing
sale of goods and services by phone
vending machines, kiosks (automated machines in McD’s, carts, pop ups)
types of non store retailing
direct selling
reaches customers in their homes and workplaces (ads at an event for example)
multilevel marketing
salespeople who act as independent contractors and create commissions from downliners (low cost of entry to those who recruited them) and receive commission from upliners
-have the incentive to recruit more salespeople in order to receive a commission on the sales made by the people that they recruit
cooperation distribution system
one firms owns all organizations in a channel (manufacturer for example)
contractual distribution system
members cooperate through contractual agreements (franchises, wholesale-sponsored chains like IGA that have a unified system but operate independently, retail cooperatives=focus on or buy one wholesaler)
Administered distribution system:
producers manage the marketing function at the retail level
All used to compete with online retailers to be more efficiency than them
Supply chain
linked activities of various organizations to move goods and services from the raw material form to the ultimate customer
Supply-chain management:
management of ^^ and using information to guage efficiency and recycling materials when necessary
Inbound logistics
raw materials, packaging, goods and services, and information form suppliers to producers
Material handling
movement of goods: warehouse>factory floor> various workstations
Outbound logistics:
manages the flow of finished products and information to business buyers and the ultimate customers
Reverse logistics:
goods back to the manufacturer due to defects or recycled materials
third party
outside firms help to move goods and services
freight forwarder
combines small shipments together to create a single large one that in transported cost effectively by truck or train (most used for volume)
-truck transport is good for smaller distances (2nd most used)
-pipleines are fast and efficienct (for coal?)
-air transportation is fast but expensive
-water transportation is inexpensive but slow
intermodal shipping
multiple modes of transportation: highway, air, water, rail to accomplish an efficient movement of freight over a long distance
Agents who represent producers are known as manufacturers agents or sales agents. As long as they do not __________, manufacturers can represent several manufacturers in a specific territory
Represent competing products
Category Killer
One store that sells a huge variety of one type of product in order to dominate a market for that product (barnes and noble)
