Information

Promotion

Negotiation

Financing

Contact with buyers

Matching

Physical Distribution

Risk Taking

• Theory of total minimum transactions (be able to calculate number of contacts and efficiency)

• Types of channels (direct and indirect); indirect has subtypes

Direct Channel (Zero-Level Channel)

Indirect Channel

• One-Level Channel

• Two-Level Channel

• Three-Level Channel

• What is dual distribution and what are the pros/cons of this strategy

Dual distribution – the use of two or more marketing channels to distribute the same target market.

• Be able to compare and contrast the different types of vertical marketing systems (corporate, contractual, etc.)

Channel Integration

Vertical Channel Integration (aka Vertical Marketing System or VMS) – combining two or more stages of the marketing channel under one management.

Corporate VMS combines all stages of the marketing channel, from producers to consumers, under a single owner.

Administered VMS – channel members are independent, but a high level of interorganizational management is achieved through informal coordination.

Contractual VMS – the most popular type of vertical marketing system, channel members are linked by legal agreements spelling out each member’s rights and obligations.

• Intensity of market coverage (intensive, selective, exclusive)

Intensive distribution – using all available outlets to distribute a product.

Selective distribution – using only some available outlets to distribute a product.

Exclusive distribution – using a single outlet in a fairly large geographic are to distribute a product.

• Understand channel power and which levels of the channel have the most..

Channel power- the ability of one channel member to influence another member’s goal achievement.

Strong customer loyalty

• Legal issues in channels (tying arrangements, full line forcing, refusal to deal, etc.)

Tying arrangements – 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.

Dual distribution – violates the law when a manufacturer that uses company-owned outlets to dominate or drive-out of business independent retailers that handle its products.

Restricted sales territories – depends on the case

Exclusive dealing – when a manufacture forbids an intermediary to carry products of competing manufactures. Depends on the case

Refusal to deal

• What is logistics or physical distribution?

Physical distribution (logistics)- activities used to move products from producers to consumers and other end users.

• Logistics activities (ordering, inventory management, etc.)

Order processing – is the receipt and transmission of sales order information.

Inventory management – developing and marinating adequate assortments of products to meet customers’ needs.

Materials handling – physical handling of tangible good, supplies, and resources.

Warehousing – the design and operation of facilities for storing and moving goods.

Transportation - the movement of products from where they are made to intermediaries and end users

• Types of warehouses (public warehouses, distribution centers, etc.)

Private warehouses – company-operated facilities for storing and shipping products.

Public warehouses- storage space and related physical distribution facilities that can be leased by companies.

Distribution centers – large, centralized warehouses that focus on moving rather than storing goods.

• Characteristics of alternative modes of transportation and know when to use each one and types of intermodal transportation (piggyback, fishyback, etc.)

Piggyback- shipping that uses both truck trailers and railway flatcars.

Fishyback – truck and water carriers.

Birdyback – truck and air carriers.

Retailing, Direct Marketing, and Wholesaling

• Be able to identify and describe ALL of the different types of retail stores (department, discount, specialty, superstores) and direct marketing (catalog, television home shopping, etc.)

Department store- large retail organizations characterized by wide product mixes and organized into separate departments to facilitate marketing and internal management. (macys, Sears)

Discount store- self-service, general merchandise stores offering brand name and private brand products, usually convenience items. ( Wal-Mart and target)

Convenience store- small self-service store offering narrow product assortment in convenient location. (7 eleven)

Supermarket – self-service store offering complete line of food products and some nonfood products. (Albertsons)

Superstore- giant outlet offering all food and nonfood products found in supermarkets, as well as mostly routinely purchased products. (walmart supercenters)

Hypermarket – combination of supermarket and discount store, larger than superstore (Carrefour)

Warehouse club – large scale member-only establishments combining cash and carry wholesaling with discount retailing with discount retailing. (sams club)

Warehouse showroom – facility in a large, low-cost building with large on-premises inventories and minimal services. (IKEA)

• Types of shopping centers (neighborhood, community, regional)

Neighborhood shopping centers usually consist of several small convenience and specialty store such as small grocery store, gas station, and fast food.

Community shopping centers include one or two department store and some specialty stores, as well as convenience stores.

Regional shopping centers usually have the largest department stores, the widest product mixes and the deepest product lines of all shopping centers.

• Understand how the wheeling of retailing works

• Be able to identify and describe ALL of the different types of wholesalers (general merchandise wholesaler, drop shippers, etc.)

Merchant wholesalers – independently owned business that take title to goods , assume ownership risks, and buy and resell products to other wholesalers, business customers or retailers.

Full- service wholesalers – merchant wholesalers that perform the widest range of wholesaling functions.

General merchandise wholesalers – full service wholesalers with a wide product mix but limits depth within product lines.

General-line wholesalers – full service wholesalers that carry only a few product lines but many products within product lines.

Specialty-line wholesalers – full-service , that carry only a single product or a few items within product line

Rack jobbers – full service, specialty-line wholesalers that own and maintain display racks in stores.

Limited-service wholesalers merchant wholesalers that provide some services and specialize in a few functions

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.