Ch 15 Deliver value through supply chain management, channels of distribution, and logistics
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39 terms
Terms | Definitions |
|---|---|
 Value Chain | a series of activities involved in designing, producing, marketing, delivering, and supporting any product. -Each link in the chain has the potential to either add or remove value from the product the customer eventually buys |
| Supply Chain | all the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer |
| Importance of Physical Distribution | 20% of sales goes towards physical distribution |
| Intermediaries | Transactional Functions- contacting, promoting, taking risk, Logistical Functions- physically distributing, storing, sorting, Facilitating Functions- make purchase process easier |
| Channel Intermediaries | firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user |
| Breaking Bulk | dividing larger quantities of goods into smaller lots in order to meet the needs of buyers |
| Creating Assortments | providing a variety of products in one location to meet the needs of buyers |
| Disintermediation | the elimination of some layers of the channel of distribution in order to cut costs and improve the efficiency of the channel |
| Knowledge Management | a comprehensive approach to collecting, organizing, storing, and retrieving a firm's information assets |
| Wholesaling Intermediaries | firms that handle the flow of products from the manufacturer to the retailer or business user |
| RFID Chip | Radio Frequency Identification |
| Independent Intermediaries | channel intermediaries that are not controlled by any manufacturer but instead do business with many different manufacturers and many different customers |
| Merchant Wholesalers | intermediaries that buy goods from manufacturers (take title) and sell to retailers and other B2B customers. |
| Cash & Carry Wholesalers | provide products for small-business customers who purchase at wholesaler's location |
| Truck Jobbers | deliver perishable food and tobacco items to retailers |
| Drop Shippers | take orders from and bill retailers for products drop-shipped from manufacturer |
| Mail-Order | sell through catalogs, telephone, or mail order |
| Rack Jobbers | Provide retailers with display units, check inventories, and replace merchandise for the retailers |
| Take Title | to accept legal ownership of a product and assume the accompanying rights and responsibilities ownership |
| Independent Intermediaries | Merchant wholesalers, merchanidse agents/brokers |
| Manufacturer Intermediaries | Sales Branches- carry inventory, provide sales and service support, Sales Offices-similar to agents, do not carry inventory but provide selling functions, Manufacturers Showrooms- permanent product displays for customers to visit |
| Place decisions influence(example) | Newbury |
| Distribution decisions can create ethical dilemma | Slotting allowance, Size of channel intermediaries |
| Channel Levels | the number of distinct categories of intermediaries that populate a channel of distribution |
| Hybrid Marketing System | a marketing system that uses a number of different channels and communication methods to serve a target market |
| Slotting Allowance | a fee paid in exchange for agreeing to place a manufacturer's products on a retailer's valuable shelf space |
| Conventional Marketing System | a multiple-level distribution channel in which channel member work independently on one another |
| Vertical Marketing System (VMS) | a channel of distributing in which there is formal cooperation among members at the manufacturing, wholesaling, and retailing levels |
| Horizontal Marketing System | an arrangement within a channel of distribution in which two or more firms at the same channel level work together for a common purpose |
| Intensive Distribution | selling a product through all suitable wholesalers or retailers that are willing to stock and sell the product |
| Exclusive Distribution | selling a product only through a single outlet in a particular region |
| Selective Distribution | distribution using fewer outlets than intensive distribution but more than exclusive distribution |
| Channel Leader | a firm at one level of distribution that takes a leadership role, establishing operating norms and processes based on its power relative to other channel members |
| Logistics | the process of designing, managing, and improving the movement of products through the supply chain. Includes: purchasing, manufacturing, storage, and transport |
| Physical Distribution | the activities that move finished goods from manufacturers to final customers, including order processing, warehousing, materials handling, transportation, and inventory control |
| Order Processing | the series of activities that occurs between the time an order comes into the organization and the time a product goes out the door |
| Enterprise Resource Planning (ERP) Systems | a software system that integrates info from across the entire company, including finance, order fulfillment, manufacturing, and transportation and then facilitates sharing of the data throughout the firm |
| Intermediaries' Variety | product size, assortment, location, hours of operation |
| Merchandise agents/brokers | Provide service in exchange for commissions, Manufacturing agents/reps |
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