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Business in Action Ch 15 BUSN100 Distribution and Marketing Logistics

After studying this chapter, you will be able to 1. Explain the role of marketing intermediaries in contemporary business and list the eight primary functions that intermediaries can perform 2. Identify the major types of wholesalers and summarize four trends shaping the future of wholesaling 3. Identify the major retailing formats and summarize six trends shaping the future of retailing 4. Explain the strategic decisions that manufacturers must make when choosing distribution channels 5. Identi…
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Distribution Strategy
Firm's overall plan for moving products to intermediaries and final customers
Marketing intermediaries
Businesspeople and organizations that assist in moving and marketing goods and services between producers and consumers
Wholesalers
Intermediaries that sell products to other intermediaries for resale or to organizations for internal use
Retailers
Intermediaries that sell goods and services to individuals for their own personal use
How Intermediaries Simplify Commerce
Intermediaries actually reduce the price customers pay for many goods and services, because they reduce the number of contacts between producers and consumers that would otherwise be necessary. They also create place, time, and posses-sion utility.
Independent wholesalers that take legal title to goods they distribute
merchant wholesalers
Merchant wholesalers that provide a wide variety of services to their customers, such as storage, delivery, and marketing support
full- service merchant wholesalers
Merchant wholesalers that sell products to organizational customers for internal operations or the production of other goods, rather than to retailers for resale
distributors
Independent wholesalers that do not take title to the goods they distribute but may or may not take possession of those goods
agents and brokers
The replacement of intermediaries by producers, customers, or other intermediaries when those other parties can perform channel functions more effectively or efficiently
disintermediation
Evolutionary process by which stores that feature low prices gradually upgrade until they no longer appeal to price- sensitive shoppers and are replaced by a new generation of leaner, low- price competitors
wheel of retailing
Large stores that carry a variety of products in multiple categories, such as clothing, housewares, gifts, bedding, and furniture
department stores
Stores that carries only a particular type of goods, often with deep selection in those specific categories
specialty stores
Retailers that sell a variety of everyday goods below the market price by keeping their overhead low
discount stores
Stores that sell designer labels and other fashionable products at steep discounts
off-price retailers
Companies that use e- commerce technologies to sell over the Internet; includes Internet- only retailers and the online arm of store- based retailers
online retailers
The application of Internet technologies to wholesaling and retailing
e-commerce
Coordinated efforts to reach consumers through more than one retail channel
multichannel retailing
The addition of entertainment or education aspects to the retail experience
retail theater
Combination of intermediaries and channels a producer uses to reach target customers
distribution mix
intensive distribution Market coverage strategy that tries to place a product in as many outlets as possible
intensive distribution Market coverage strategy that tries to place a product in as many outlets as possible
Market coverage strategy that uses a limited number of carefully chosen outlets to distribute products
selective distribution
Market coverage strategy that gives intermediaries exclusive rights to sell a product in a specific geographic area
exclusive distribution
channel conflict Disagreement or tension between two or more members in a distribution channel, such as competition between channel partners trying to reach the same group of customers
channel conflict Disagreement or tension between two or more members in a distribution channel, such as competition between channel partners trying to reach the same group of customers
Arrangements by which channel partners coordinate their activities under the leadership of one of the partners
marketing systems
All the activities required to move finished products from the producer to the consumer
physical distribution
The planning, movement, and flow of goods and related information throughout the supply chain
logistics
Steps in the Physical Distribution Process
The phases of a distribution system should mesh as smoothly as the cogs in a machine. The objective of the process is to provide a target level of customer service at the lowest over-all cost.
Functions involved in receiving and filling customers' orders
order processing
Facility for storing inventory
warehouse
Advanced warehouse facilities that specialize in collecting and shipping merchandise
distribution centers
Movement of goods within a firm's warehouse terminal, factory, or store
materials handling
The coordinated use of multiple modes of transportation, particularly with containers that can be shipped by truck, rail, and sea
intermodal transportation