Exam 3 Flash Cards
What are the channel activities?
Marketing information, marketing management, facilitating exchanges, activities done by wholesaler, price, promotion, and physical distribution
How do you calculate contractual efficiency?
Without a wholesaler, you multiply the number of producers by the number of retailers to get the number of contracts. With a wholesaler, you add the number of producers to the number of retailers to get the number of contracts.
What are the types of channels?
Direct channel and indirect channel; indirect channel can be one level, two levels, or three levels
Direct Channel
Producer directly to consumer
One Level Indirect Channel
Prouder to retailer to consumer
Two Levels Indirect Channel
Producer to wholesaler to retailer to consumer
Three Levels Indirect Channel
Producer to agent/broker to wholesaler to retailer to consumer
Dual Distribution
The use of two or more marketing channels to distribute the same products to the same target market
Corporate VMS
Combines all stages of marketing channel under a single owner, maintains advantage through speed and lower prices
Administered VMS
All channel members are independent and one member coordinates all members
Contractual VMS
Channel members are linked by legal agreements spelling out each member’s rights and obligations
What are the three intensities of market coverage?
Intensive, selective, exclusive
Intensive Market Coverage
Available in many retail outlets, convenience products
Selective Market Coverage
Available in some outlets, shopping products
Exclusive Market Coverage
Available in very few outlets, specialty products
Channel Power
The ability of one channel member to influence another member’s goal achievement
How can dual distribution violate the law?
When the manufacturer that uses company owned outlets to dominate or drive out of business independent retailers or distributors that handle its products
Restricted Sales Territories
To tighten control over product distribution, a manufacturer may try to prohibit intermediaries from selling outside of designated sales territories
Tying Agreements
An agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well
Exclusive Dealing
When a manufacturer forbids an intermediary to carry products of competing manufacturers
Refusal to Deal
Producers have the right to choose or reject the channel members with which they will do business, but within existing distribution channels suppliers may not legally refuse to deal with wholesalers or dealers merely because they resist policies that are anticompetitive or in restraint of trade
Logistics/Physical Distribution
Refers to the activities used to move products from producer to consumer and other end users
What are the five logistics activities?
Order processing, inventory management, materials handling, warehousing, and transportation
Order Processing
The receipt and transmission of sales order information; entails order entry, order handling, and order delivery
Inventory Management
Developing and maintaining adequate assortments of products to meet customers’ needs
Materials Handling
The physical handling of tangible goods, supplies, and resources
Warehousing
The design and operation of faculties for storing and moving goods
Transportation
The movement of products form where they are made to intermediaries and end users
What are the three types of warehouses?
Private, public, and distribution center
Private Warehouses
Company-operated facilities for storing and shipping products
Public Warehouses
Storage space and related physical distribution faculties that can be leased by companies
Distribution Centers
Large, centralized warehouses that focus on moving rather than storing goods
When should you use railroads?
To carry heavy freight that must be shipped long distance over land
When should you use trucks?
When needing specialized schedule and route; also when other transportations cannot provide door to door deliveries
When should you use waterways?
To carry a large amount of nonperishable goods on a low budget
When should you use airplanes?
To carry high value and low bulk perishable goods a far distance quickly, used for larger budgets
When should you use pipelines?
To move products slowly but continuously and at a relatively low cost
What are the three types of intermodal transportation?
Piggyback, fishyback, and birdyback
Piggyback Intermodal Transportation
Using truck trailers and railway flatcars
Fishyback Intermodal Transportation
Using truck trailers and water carriers
Birdyback Intermodal Transportation
Using truck trailers and air carriers
General Merchandise Wholesalers
Full service wholesalers with a wide product mix but limited depth within product lines
Limited Line Wholesalers
Full service wholesalers that carry only a few product lines but many products within those lines
Specialty Line Wholesalers
Full service wholesalers that carry only a single product line or few items within a product line
Rack Jobbers
Full service, specialty line wholesalers that own and maintain display racks in stores
Cash and Carry Wholesalers
Limited service wholesalers whose customers pay cash and furnish transportation
Truck Wholesalers
Limited service wholesalers that transport products directly to customers for inspection and selection
Drop Shippers
Limited service wholesalers that take title of goods and negotiate sales but never actually take possession of products
Mail Order Wholesalers
Limited service wholesalers that sell products through catalogs
Department Store
Large organization offering a wide product mix and organized into separate departments
Discount Store
Self service, general merchandise store offering brand name and private brand products at low prices
Convenience Store
Small, self service store offering narrow product assortment in convenient locations
Supermarket
Self service store offering complete line of food products and some nonfood products
Superstore
Giant outlet offering all food and nonfood products found in supermarkets, as well as most routinely purchased products
Hypermarket
Combination supermarket and discount store, larger than a superstore
Warehouse Club
Large scale, member only establishments combining cash and carry wholesaling with discount retailing
Warehouse Showroom
Facility in a large, low cost building with large on premises inventories and minimal service
What are the different types of direct marketing?
Catalog marketing, direct response marketing, telemarketing, television home shopping, and online retailing
Catalog Marketing
A type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet
Direct Response Marketing
A type of marketing in which a retailer advertises a product and makes it available through mail or telephone orders
Telemarketing
The performance of marketing related activities by telephone
Television Home Shopping
A form of selling in which products are presented to television views, who can buy them by calling a toll free number and paying with a credit card
Online Retailing
Retailing that makes products available to buyers through computer connection
Direct Selling
Marketing products to ultimate consumers through face to face sales presentations at home or in the workplace
Automatic Vending
The use of machines to dispense products
Source
A person, group, or organization with a meaning it tries to share with a receiver or an audience
Receiver
The individual, group, or organization that decodes a coded message
Coding Process
Converting meaning into a series of signs or symbols
Communication Channel
The medium of transmission that carries the coded message from the source to the receiver or audience
Decoding Process
Signs or symbols are converted into concepts or ideas
Noise
Anything that reduces the clarity and accuracy of the communication
Feedback
The receiver’s response to a decoded message
Channel Capacity
The limit on the volume of information a communication channel can handle effectively
What are the objectives of promotion?
Create awareness, stimulate demand, encourage product trial, identify prospects, retain loyal customers, facilitate reseller support, combat competitive promotional efforts, and reduce sales fluctuations
Create Awareness
Crucial to initiating product adoption, help generate revenues to recoup research and development costs, and refresh interest in existing brands
Stimulate Demand
Primary demand is for product category, selective demand is for specific brand, pioneer promotion is promotion that informs consumers about a new product
Encourage Product Trial
Distributing product samples fosters consumer evaluation of a product
Identify Prospects
Customer response promotions generate sale leads
Retain Loyal Customers
Frequent user programs reward loyal customers
Facilitate Reseller Support
Advertising by producers promote sales for reseller
Combat Competitive Promotional Efforts
Promotions countering competitors’ own promotions
Reduce Sales Fluctuations
Promotion raises sales in off peak sales periods
What are the components in the promotion mix?
Advertising, personal selling, public relations, sales promotion
Advertising
A paid non-personal communication about an organization and its products transmitted to a target audience through mass media
Personal Selling
Sales, paid personal communication
Public Relations
Broad set of communication efforts used to create and maintain favorable relationships between the organization and its stakeholders
Sales Promotion
An activity or material that acts as a direct inducement offering added value or incentive
Push Policy
Promoting a product only to the next institution down the marketing channel
Pull Policy
Promoting a product directly to consumers to develop strong consumer demand that pulls products through a marketing channel
Product Placement
Brand appears in program
Product Integration
Brand appears as a part of a storyline
What are the alternative types of advertising objectives?
Institutional, advocacy, product
Institutional Advertising Objective
Advertising for a place of education
Advocacy Advertising Objective
Advertising for a position on an issue
Product Advertising Objective
Pioneer: to introduce a product or product category; or Competitive: comparative for those who do not hold the most market share, reminder, or reinforcement
What are the three communication appeals used in advertising?
Rational, emotional, moral
Rational Communication Appeal
Price, quality; not often used by itself
Emotional Communication Appeal
Positive or negative emotions
Moral Communication Appeal
Appealing to sense of what is right or wrong
Objective-and-task Approach
Budgeting for an advertising campaign by first determining its objectives and then calculating the cost of all the tasks needed to attain them
Percentage-of-sales Approach
Budgeting for an advertising campaign by multiplying the firm’s past and expected sales by a standard percentage
Competition-matching Approach
Determining an advertising budget by trying to match competitors’ advertising outlays
Arbitrary Method
Budgeting for an advertising campaign as specified by a high level executive in a firm
Reach
Percentage of target audience exposed to campaign
Frequency
How often an advertisement is seen
Media class vs. Media vehicle
Media class is the type of advertising while media vehicle is the exact show or program the advertisement will appear during
Television
People skip through commercials, cord cutting, overall cost very high
Radio
People feel connected to radio personalities, corporations taking over, younger audience not listening as much, radio not local anymore, no visual element
Newspapers
Average read age 55, they don’t make as much online, should only advertise on Sunday
Magazine
High volume of readers per copy, specialized magazines most popular, high cost and long lead time, high audience selectivity
Direct Mail
Very cheap, very low response rate, can customize/personalize for each individual
Outdoor
Any advertising outside
Internet
Get higher in organic search results, at least on first page, most people do not click on ads, downside that banner ads are automated
Social Media
Generate organic impression, Facebook does not show all content to followers only about 1 to 2 percent, create good content to avoid paying for promotions
CPM
(Cost of ad * 1000)/Total Audience = Cost per thousand people viewing
What are the three types of media schedules?
Continuous, flighting, and pulsing
Continuous media schedule
Same amount paid for ads throughout campaign
Flighting media schedule
Periods of lots of ads, then periods of none; greater impact with lower budget
Pulsing media schedule
Hybrid method; baseline of spending, bump up spending at certain times
What techniques are used to evaluate advertising?
Pretest, posttest, recognition test, unaided recall test, and aided recall test
Pretest
Evaluation of advertisements performed before a campaign begins
Posttest
Evaluation of advertising effectiveness after the campaign
Recognition Test
A posttest in which respondents are shown the actual ad and are asked if they recognize it
Unaided Recall Test
A posttest in which responded are asked to identify advertisements they have seen recently but are not given any recall clues
Aided Recall Test
A posttest that asks respondents to identify recent ads and provides clues to jog their memories
Publicity
A news story type of communication about an organization and/or its products transmitted through a mass medium at no charge
News Release
A short piece of copy publicizing an event or a product
Feature Article
A manuscript of up to 3,000 words prepared for a specific publication
