Topic 8 : Place

Question 1

supply chain

Answer 1

the system of efficiently and effectively producing, making and getting products to end-users

Question 2

supply chain management

Answer 2

the management of upstream and downstream value-added flows of materials, final goods and related information among suppliers, the company, resellers and final consumers

Question 3

Major supply chain functions

Answer 3

The main supply chain functions focusing on the customer end include warehousing, inventory management, transportation and logistics information management.

Question 4

Marketing channels

Answer 4

is a network of interdependent organisations – intermediaries – involved in the process of making goods and services available for use or consumption by the consumer or business user.

Question 5

How marketing channels add value

Answer 5

Many suppliers lack the financial resources to carry out direct marketing, or customers want personal interaction before buying large-ticket items
The use of intermediaries largely reflects their greater efficiency in making goods available to target markets. Through their contacts, experience, specialisation and scale of operation, intermediaries usually offer a producer or supplier more than it can achieve on its own.

Question 6

Marketing channel members perform many key functions:

Answer 6

• information – gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange
• promotion – developing and spreading persuasive communications about an offer
• contact – finding and communicating with prospective buyers
• matching – shaping and fitting the offer to the buyer’s needs, including such activities as manufacturing, grading, assembling and packaging
• negotiation – reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred
• physical distribution – transporting and storing goods
• financing – acquiring and using funds to cover the costs of the channel work
• risk taking – assuming the risks of carrying out the channel work.

Question 7

Number of channel levels

Answer 7

We use the number of intermediary levels to indicate the length of a channel

Question 8

Channel 1, called a direct marketing channel

Answer 8

has no intermediary levels. It consists of a manufacturer selling directly to consumers.

Question 9

Channel 2

Answer 9

contains one intermediary level. In consumer markets, this level is typically a retailer, as in the case where large retailers, such as Big W and Kmart, sell televisions, cameras, tyres, furniture, appliances and many other products that they buy directly from manufacturers

Question 10

Channel 3

Answer 10

contains two intermediary levels. In consumer markets, these levels are typically a wholesaler and a retailer. This channel is often used by small manufacturers of food, pharmaceutical, hardware and other products.

Question 11

institutions in the channel are connected by several types of flows

Answer 11

These include the product flow of goods and services, the flow of ownership (in the case of goods, but not in the case of services), payment flow, information flow and promotion flow. These flows can make channels very complex, even those with only one or a few levels