Chapter 15 - Lecture notes 8 PDF

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Chapter 15...

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Chapter 15 Distributing Products

Marketing Intermediaries (Middlemen) Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C)

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Called intermediaries because they're in the middle of a series of organizations that join together to help distribute goods from producers to consumers

Channel of Distribution Whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers Agents/Brokers Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods Wholesaler A marketing intermediary that sells to other organizations Retailer An organization that sells to ultimate consumers (people like you and I) Utility The want-satisfying ability, or value, that organizations add to goods or services when the products are made more useful or accessible to consumers than they were before 6 kinds of utility Form Utility Traditionally, producers rather than intermediaries have provided form utility by changing raw materials into useful products Time Utility Adding value to products by making them available when they're needed

Place Utility Adding value to products by making them available when they're needed Possession Utility

guarantees, and

Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, follow-up service

Information Utility Adding value to products by opening two-way flows of information between marketing participants Service Utility Adding value by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time

Merchant Wholesalers Independently owned firms that take title to the goods they handle Full-service wholesalers Perform all the distribution functions Limited-function wholesalers Perform only selected functions, but try to do them especially well 1) Rack jobbers a. Wholesalers that furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment. 2) Cash-and-carry wholesalers a. Wholesalers that serve mostly smaller retailers with a limited assortment of products. 3) Drop shippers a. Wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.

3 categories of Retail Distribution

 Intensive Distribution o Distribution that puts products into as many retail outlets as possible

 Selective Distribution o Distribution that sends products to only a preferred group of retailers in an area  Exclusive Distribution o Distribution that sends products to only a preferred group of retailers in an area Electronic Retailing Selling goods and services to ultimate customers (e.g., you and me) over the Internet Social Commerce A form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services 1) 2) 3) 4) 5) 6) 7)

Peer-to-peer sales platforms Social network-driven sales Group buying Peer recommendations User-curated shopping Participatory commerce Social shopping

Telemarketing The sale of goods and services by telephone Direct Selling Selling to consumers in their homes or where they work Direct Marketing Any activity that directly links manufacturers or intermediaries with the ultimate consumer

Corporate Distribution System A distribution system in which all of the organizations in the channel of distribution are owned by one firm Contractual Distribution A distribution system in which members are bound to cooperate through contractual agreements 1) Franchise Systems a. A distribution system in which members are bound to cooperate through contractual agreements 2) Wholesaler-sponsored chains

a.

Each store signs an agreement to use the same name, participate in chain promotions, and cooperate as a unified system of stores, even though each is independently owned and managed

3) Retail Cooperatives a. The stores remain independent

Administered Distribution System A distribution system in which producers manage all of the marketing functions at the retail level Supply Chain (Value Chain) The sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers Supply-Chain management The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate Logistics

The marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit

Inbound Logistics The area of logistics that involves bringing raw materials, packaging, other goods and services, and information from suppliers to producers Materials Handling The movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations Outbound Logistics The area of logistics that involves managing the flow of finished products and information to business buyers and ultimate consumers (people like you and me) Reverse Logistics The area of logistics that involves bringing goods back to the manufacturer because of defects or for recycling materials Freight Forward An organization that puts many small shipments together to create a single large shipment that can be transported cost-effectively to the final destination Intermodal Shipping The use of multiple modes of transportation to complete a single long-distance movement of freight Warehouses Distribution Warehouses Facilities used to gather and redistribute products Storage Warehouses Holds products for a relatively long time...