Unit 7 - P for PLace (distribution) Flashcards
what is channel of distribution?
facilitates movement of product from producer to final customer
what is supply chain?
activities necessary to turn raw materials into a good or service and put it in the hands of the consumer
what are the functions of distribution channels?
to create efficiencies by reducing # of transactions
to ease the flow of goods from produce to customer
to “push” n promote the brands
risk taking
-storing &managing inventory
-providing credit
what are the steps in distribution planning?
1) develop distribution objectives
2) evaluate internal/external environmental influences
3) choose a distribution strategy
4) develop distribution tactics
what are long channels used for?
consumer goods inexpensive & simple goods (low inv) small products standardized products goods sold in dispersed markets good sold frequently & to many customers
what are short channels used for
industrial products
expensive & complex goods
customized products
service
products sold in geographically concentrated market
products bought infrequently by relative small # of customers
what is conventional?
channel which consists of 1 or more independent producers, wholesalers & retailers
each separate business
what is vertical ms?
producers wholesales and retailers act as a unified system
what are corporate vms?
more than one stage of the distribution channel under one ownership
what is contractual VMS?`
most popular, inter organizational relationships formalized through contracts that spell out each members rights & obligations (franchise)
what is administrative vms?
channel members are independent w/ high level of interorganizational management by informal coordination. agree to adopt uniform accounting policies, etc & promotional activites.
one channel member dominates, has a channel leader
what is horizontal ms?
two or more firms at the same channel level work together for a common purpose
what are the types of distribution strategy?
intensive, selective, exclusive
what is intensive?
selling through all suitable wholesalers or retailers
inexpensive fast moving consumer convenience good
impulse purchase/ high number
good purchased frequently
what is selective?
fewer outlets than intensive but more than exclusive distribution
shopping goods, medium priced goods
good purchased only occasionally
goods where purchased is planned rather than impulsive
what is exclusive?
exists when a manufacturer gives a middleman the sole right to sell a product in a defined geographical area specialty product (high price, infrequent purchase, high involvement, planned purchase, niche products)
what are channel partners?
are essential for marketing to achieve its objectives of having
what type of channel partners are wholesalers?
obtain large quantities store & break down into smaller units take title to goods assume risk of selling & obselescene three types: merchant wholesalers, brokers, & manufactures agents
what type of channel partner are retailers
buy products from wholesalers, agents or distributors & then sell them to consumers
vary by the types of products they sell, their sizes, prices they charge, level of service, convenience or speed they offer
what is direct distribution?
typically this a transaction between the producer & the end user
what is indirect distribution?
consists of intermediaries between the producer & the user
what is sourcing?
hiring & evaluating suppliers
what is procurement
purchasing the necessary goods n services
what is demand planning?
the process of estimating how much a good or service a customer will buy
