MKT 4320 Exam 2

wholesalers

wholesalers

business establishments that do not sell many products to households or end users

• sell physical inputs in products required by other businesses

• provide services or channel functions

master distributors

super wholesaler that distributes to other wholesalers

• single point of contact

• consolidate orders to avoid order minimum

• quantity discount and lower transportation

• carefully evaluated using scorecard

9 generic functions of wholesaler

1. physical possession

2. take title

3. promote product

4. negotiate transactions

5. finance operations

6. risk capital

7. process orders

8. handle payments

9. manage information

wholesale consolidation

massive, decade long consolidation

• sparked by information technology

• eliminates inefficiency

trends in wholesaling

• populated by many small firms

• disappearance of 2/3 of industry

difference between wholesaler and distributor

wholesaler: resold to intermediary

distributor: resells to industrial

supply chain management

strategic coordination of traditional business functions across channels

agents/brokers

buy and sell without taking ownership

third-party logistic providers

do not take title to products they handle

• charge activity-based fee for services rendered

• manufacturers outsource work to 3pls

product/trade name manufacturing

authorize distribution through wholesalers and retailers

• makes profit via margins

1. automotive

2. gas stations

3. beverage bottlers

business format franchising

• entire way of doing business

• grey area structure

benefits for franchisee

• decision making

• business model

• coaching and support

• quality policing

• brand name

european union definition of franchising

exempt from rules to maintain competition, maintain cohesive identity

benefits for franchisor

• fast spread

• local consultation and innovation

• inherent incentive

franchisor strategies to keep franchisees from leaving

• Franchisees giving leniency more likely to be fully engaged and trusting

• Encouragement to innovate

• Team spirit

• Helping finance franchisees

• Fairness

• Low costs for franchisee

• Franchisor owning few stores

• Open communication

• Competence and reliability

• Win-win solutions

challenges in franchising

• misdirect effort

• manage quality

multi-unit franchising

manager is not owner, but rather units are collectively managed through the spread of local information

• This is most beneficial when stores in one company are adjacent to one another and when they are dealing with similar demographics.

• In this strategy, it is easier to monitor managers and amortize human capital, and less free riding occurs.

key intermediary functions in global market

helping those distribute internationally

• country selection

• finding international customers

• managing adherence to regulations

• logistics and paperwork

export management company

• does everything necessary to sell internationally

  • Marketing research, business development, promotions, logistics, credit and payment handling, customer service, regulation compliance, raining sales forces, and trade shows

export trade companies

• work with various products

  • raw materials (industrial)

  • finished goods (consumer)

• vertical integration

  • extensive processing, manufacturing, and transportation operations

piggybacking

when a company uses another’s distribution channel

• saves money and time

• commission or fees

• no conflicts of interest

factors for success in international retail

• unique benefits

• ability to compete with local markets

international franchise strategies

1. direct franchising: recruiting individual franchisees

2. area-development franchise: multi-unit franchising over geographic area

3. master franchising: franchisee of geographic area recruits sub-franchisees

4. joint venture direct franchising

base of the pyramid market

• living of less than $1-$2 a day

• remote rural areas or urban slums

• BOP often lack savings or credit

• Often lack literacy or geographic mobility

• Often resist change and spend income on necessities

• Trust and education necessary to market to BOP

challenges marketing to base of the pyramid

• poor infrastructure,

• remote consumers

• unpredictable incomes

channel strategies

make buying easy, convenient, efficient and cost effective

service output: bulk breaking

allows purchasing smaller quantity when goods are produced in large batch

service output: spatial convenience

• reduces transportation and search costs

• includes delivery, and pick up of repairable products

service output: waiting or delivery time

• reduces need to plan consumption

• end-users pay more for shorter wait times

service output: product variety

• greater variety costs more

• assortment: depth of product brands

service output: customer service

• all aspects that ease shopping and purchasing

• better customer service means more profits

service outputs: information sharing

• educating end users about products and providing services before and after sale

  • solutions retailing

3 step process to segment end users by service outputs

1. generate list of desired service outputs by end-user

2. divide into segments

   1. divide based on common product or advertising decisions

   2. distinct groups with similar end users

3. name segments to facilitate internal communications

key features of omnichannel

1. managing channel relationships

2. harnessing customer knowledge

3. assessing channel performance

4. leveraging technology