Distribution and Marketing Logistics

Question 1

Distribution Strategy

Answer 1

A firm’s overall plan for moving products from its facility to its customers.

Question 2

Marketing Intermediaries

Answer 2

Businesspeople and organizations that assist in moving and marketing goods between producers and consumers.

Service providers may use marketing intermediaries too

Intermediaries are a key part of distribution strategy since they assist by moving and marketing goods between producers and consumers

Question 3

The Distribution Channel

Answer 3

Producer -> Wholesaler -> Retailer -> Customer

Question 4

Wholesalers

Answer 4

Intermediaries that sell products to other intermediaries for resale

• Transport and store products
• break shipments into smaller units

Question 5

Retailers

Answer 5

Intermediaries that sell goods and services to individuals for their own personal use

• Provide promotional and sales support
• Assume risks
• Provide financing

Question 6

What do intermediaries do?

Answer 6

• transport and store products
• break shipments into smaller units
• Provide promotional support and sales support
• Assume risks
• Provide financing

Question 7

Retailing Formats:
Selection;
Department vs. Specialty Stores

Answer 7

Department Stores sell many categories of products and the selection within a category is relatively limited (aka Macy’s and Kohl’s)

Specialty Stores specialize in a product category (or a limited number of product categories) and offer a wider selection than you’d find in a department store (aka Foot Locker for sneakers has a better selection than Macy’s)

Question 8

Retailing Formats:
Price;
Discount Stores vs Off-price retailers

Answer 8

Discount Stores sell goods below market price by keeping their overhead low (Wal-Mart and Costco)

Off-price retailers offer low prices by buying surplus goods from producers and other retailers. Then, they pass the savings along to their customers. (Burlington and Marshalls)

Question 9

Retailing Formats:
Location;
Physical (bricks and mortar) vs Internet

Answer 9

Retailers vary in terms of location. Some retailers have physical locations while others are internet-based operations.

Question 10

Distribution Channel Design:

Channel Length

Answer 10

Channel Length addresses how many intermediaries are in the channel

Question 11

Distribution Channel Design:

Market Coverage

Answer 11

Market Coverage addresses how many wholesalers or retailers will carry a product

Question 12

Direct Channels go directly from the producer to the …

Answer 12

Consumer

Question 13

Indirect Channels go from the producer to the …

Answer 13

Intermediaries, then to the consumer

Question 14

Intensive Market Coverage

Answer 14

As many retail outlets as possible (ex: Candy bars and water bottles)

Question 15

Selective Market Coverage

Answer 15

A limited number of outlets (ex: Tv’s, phones, bikes)

Question 16

Exclusive Market Coverage

Answer 16

One (or very few) outlets in each geographic area (ex: Rolex watch)

Question 17

Convenience Good

Answer 17

A good consumers buy frequently (Usually has an intensive distribution strategy)

Question 18

Shopping Good

Answer 18

Consumers usually purchase these less frequently than convenience products (usually has a selective distribution strategy b/c quick and convenient access isn’t critical to consumers for these products)

Question 19

Specialty Good

Answer 19

A good that consumers make a special effort to find and buy and the consumer will not usually accept another brand. (Exclusive distribution)

Question 20

How many intermediaries are in MikesBikes?

Answer 20

One. The retailers.