Domain 7: Deliver the Value Offering

Question 1

A set of connections between organizations and/or individuals interacting with each other to benefit the entire group.

Answer 1

Value network

Question 2

Premised on the notion that the firm is no longer the sole arbiter of value as consumers take increasingly active roles in the creation of their own value.

Answer 2

Value co-creation

Question 3

A group of legally independent companies or subsidiary business units that use various methods of coordinating and controlling their interaction in order to appear like a larger entity.

Answer 3

Network organization (virtual organization)

Question 4

A chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. It can include wholesalers, retailers, distributors and even the internet. Channels are broken into direct and indirect forms: A direct channel allows the consumer to buy the good from the manufacturer, and an indirect channel allows the consumer to buy the good from a wholesaler or retailer.

Answer 4

Channel of distribution

Question 5

Firm or person (such as a broker or consultant) who acts as a mediator on a link between parties to a business deal, investment decision, negotiation, etc.

Answer 5

Intermediaries

Question 6

Buy products from manufacturers in bulk and then resell them, usually to retailers or other businesses.

Answer 6

Merchant intermediaries

Question 7

In most cases, these serve as an intermediary on a permanent basis between buyers and sellers, while brokers do this on a temporary basis only. Both are paid in commission for each sale and do not take ownership of the goods being sold. Generally the two are nearly synonymous though.

Answer 7

Agent intermediaries

Question 8

Distribution channel in which a producer supplies or serves directly to an ultimate user or consumer, without any middleman (agent, distributor, wholesaler, retailer).

Answer 8

Direct channel

Question 9

A chain of intermediaries through which a product moves in order to be made available for purchase by a consumer. This type of channel of distribution typically involves a product passing through additional steps as it moves from the manufacturing business via distributors to wholesalers and then retail stores.

Answer 9

Indirect channel

Question 10

Standardization and grading, finance management, and risk taking are the important facilitating functions of marketing:

Answer 10

Facilitating functions

Question 11

Reduction in the use of intermediaries between producers and consumers, for example by investing directly in the securities market rather than through a bank.

Answer 11

Disintermediation

Question 12

System in which the main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs.

Answer 12

Vertical marketing system (VMS)

Question 13

One member of the distribution channel be it a producer, a wholesaler or a retailer owns all the other members of the channel, thereby having all the elements of production and distribution channel under a single ownership.

Answer 13

Corporate VMS

Question 14

A strategy where a firm acquires business operations within the same production vertical. It can be forward or backward in nature

Answer 14

Vertical integration

Question 15

A channel system formed by individual firms operating as different channel players, integrating their operations on contractual basis.

Answer 15

Contractual VMS

Question 16

It’s a type of contractual VMS (Vertical Marketing System) in which a producer licenses a wholesaler to distribute its products.

Answer 16

Franchise organization

Question 17

A type of cooperative which employs economies of scale on behalf of its retailer members.

Answer 17

Retailer cooperative

Question 18

An organization that buys goods in large quantities to sell to the group of members that each have a share in it.

Answer 18

Wholesaler cooperative

Question 19

One member of the channel is large and powerful enough to coordinate the activities of the other members without an ownership stake.

Answer 19

Administered VMS

Question 20

The individual or organization responsible for managing a particular distribution channel and overseeing channel partnerships.

Answer 20

Channel captain

Question 21

The chain of individuals and organizations involved in getting a product or service from the producer to the consumer. The basic distribution channel consists of a manufacturer, a wholesaler and a retailer.

Answer 21

Distribution channel

Question 22

The ability of any one channel member to alter or modify the behavior of other members in the distribution channel, due to its relatively strong position in the market.

Answer 22

Channel power

Question 23

Occurs when manufacturers (brands) disintermediate their channel partners, such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers through general marketing methods and/or over the Internet.

Answer 23

Channel conflict

Question 24

The expectation that the one member will be able to punish another upon failure to conform to the former’s influence attempts.

Answer 24

Coercive power

Question 25

Refers to the capacity of one channel member to reward another if the latter conforms to the influence of the former.

Answer 25

Reward power

Question 26

Power based upon channel members’ perception that another channel member has a high level of knowledge or a specialized set of skills that other members of the channel do not possess.

Answer 26

Expert power

Question 27

Refers to the ability of a leader to influence a follower because of the follower’s loyalty, respect, friendship, admiration, affection, or a desire to gain approval.

Answer 27

Referent power

Question 28

Power you derive from your formal position or office held in the organization’s hierarchy of authority.

Answer 28

Legitimate power

Question 29

Involves taking the product directly to the customer via whatever means, ensuring the customer is aware of your brand at the point of purchase.

Answer 29

Push strategy

Question 30

Involves motivating customers to seek out your brand in an active process.

Answer 30

Pull strategy

Question 31

A lump sum paid to a retailer by food and beverage suppliers to have their products featured on its store shelves and stored in its warehouse.

Answer 31

Slotting allowance (shelf fee)

Question 32

Is concerned with inventory control, as well as with packaging and handling.

Answer 32

Physical distribution (logistics)

Question 33

The process of dividing larger quantities into smaller quantities in the transportation-warehousing system as goods get closer to the final market.

Answer 33

Breaking bulk

Question 34

This involves collecting products from many small producers.

Answer 34

Accumulating bulk

Question 35

This involves separating products into grades and qualities desired by different target markets.

Answer 35

Sorting

Question 36

This involves putting together a variety of products to give a target market what it wants. This usually is done by those closest to the final consumer or user – retailers or wholesalers who try to supply a wide assortment of products for the convenience of their customers. A grocery store is a good example.

Answer 36

Creating assortments

Question 37

Provides the physical means of carrying goods and persons from one place to another. In other words, it is concerned with carrying the goods from the places of production to the places of their consumption.

Answer 37

Transportation and storage

Question 38

The process concerned with retaining and preserving the goods.

Answer 38

Storage

Question 39

The level of a product’s availability in a market selected by a marketer. This is often dependent on factors such as the size of the target market, pricing and promotion and production capacity, in addition to the amount of service the product will need after its purchase if applicable.

Answer 39

Distribution intensity

Question 40

A marketing strategy under which a company sells through as many outlets as possible, so that the consumers encounter the product virtually everywhere they go: supermarkets, drug stores, gas stations, and the like. Soft drinks are a good example.

Answer 40

Intensive distribution

Question 41

A consumer item that is widely available and purchased frequently with minimal effort. Because this type of good can be found readily, it does not typically involve an intensive decision-making process.

Answer 41

Convenience good

Question 42

Retail items known for their unplanned purchases and, therefore, kept near the checkout counters, such as candy, chocolate, magazines, novelties, snacks.

Answer 42

Impulse good

Question 43

A higher-end product occasionally bought by consumers that are usually compared for their appropriateness, quality, cost and features before purchase occurs. Consumers tend to take more time when purchasing this type of good produced by a business, and they might even travel to buy such goods.

Answer 43

Shopping goods

Question 44

Type of product distribution that lies between intensive distribution and exclusive distribution, and in which only a few retail outlets cover a specific geographical area. Considered more suitable for high-end items such as ‘designer’ or prestige goods.

Answer 44

Selective distribution

Question 45

Situation where suppliers and distributors enter into an exclusive agreement that only allows the named distributor to sell a specific product.

Answer 45

Exclusive distribution

Question 46

The movement of material associated with storing, transporting, and distributing goods to its customers.

Answer 46

Outbound logistics

Question 47

The activities of receiving, storing, and disseminating incoming goods or material for use.

Answer 47

Inbound logistics

Question 48

The process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition. All operations related to the reuse of products and materials.

Answer 48

Reverse logistics

Question 49

A situation in which the demand or requirement for an item cannot be fulfilled from the current inventory.

Answer 49

Stock-out

Question 50

The integrated management of core business processes, often in real-time and mediated by software and technology.

Answer 50

Enterprise resource planning (ERP) systems

Question 51

A management strategy that aligns raw material orders from suppliers directly with production schedules. Companies employ this inventory strategy to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. This method requires that producers are able to accurately forecast demand.

Answer 51

Just-in-time (JIT) inventory control system

Question 52

One of the first software-based integrated information systems designed to improve productivity for businesses, it is a sales forecast-based system used to schedule raw material deliveries and quantities, given assumptions of machine and labor units required to fulfill a sales forecast.

Answer 52

Materials requirement planning (MRP)

Question 53

A network between a company and its suppliers to produce and distribute a specific product, and the supply chain represents the steps it takes to get the product or service to the customer.

Answer 53

Supply chain

Question 54

The management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace. Represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible.

Answer 54

Supply chain management

Question 55

A company’s use of third-party businesses to outsource elements of the company’s distribution and fulfillment services.

Answer 55

Outsourcing (third-party logistics, 3PL)

Question 56

Refers to an arrangement whereby a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area.

Answer 56

Exclusive dealing

Question 57

A fixed geographic area in which a franchisee is given the right to operate, and in which the franchisor is restricted from establishing any other units.

Answer 57

Exclusive territory

Question 58

An often illegal arrangement where, in order to buy one product, the consumer must purchase another product that exists in a separate market. This falls under the wider legal umbrella of illegal competition that was originally censured by the Sherman Antitrust Act and refined in later acts.

Answer 58

Tying contract

Question 59

Commercial transaction in which a buyer intends to consume the good or service through personal, family, or household use.

Answer 59

Retailing

Question 60

A type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet.

Answer 60

Electronic commerce (e-commerce)

Question 61

The sale of goods and services through the internet.

Answer 61

Electronic retailing (e-retailing or e-tailing)

Question 62

A multichannel sales approach that provides the customer with an integrated customer experience. The customer can be shopping online from a desktop or mobile device, or by telephone, or in a bricks and mortar store and the experience would be seamless.

Answer 62

Omnichannel retailing

Question 63

a “market participant” or member firm of an exchange that also buys and sells securities at prices it displays in an exchange’s trading system for its own account which are called principal trades and for customer accounts which are called agency trades.

Answer 63

Market makers

Question 64

A strategy that involves forming an engaging brand presence in order to interact with a community of existing customers.

Answer 64

Community marketing

Question 65

These communities give members a place to make their needs known and give companies the opportunity to respond and make them feel important – which they are.

Answer 65

Customer communities