Marketing Channels, Retailing, and Pricing Strategies

Transactional functions

Functions performed by intermediaries that involve buying and selling products.

Logistical functions

Functions performed by intermediaries that involve the transportation and storage of products.

Facilitating functions

Functions performed by intermediaries that assist in the exchange process.

Direct channel

When producers sell directly to consumers without intermediaries.

Intensive distribution

A distribution strategy where products are available everywhere.

Selective distribution

A distribution strategy where products are available at limited outlets.

Exclusive distribution

A distribution strategy where products are available at a single outlet per area.

Channel conflict

Disagreements among channel members due to increased distribution coverage, bypassing members, or profit margin changes.

Vendor-Managed Inventory (VMI)

When suppliers determine product amounts/assortment and handle replenishment.

Retail functions

Providing assortment, breaking bulk, holding inventory, providing services.

Omnichannel retailing

Seamless customer experience across all channels (online, in-store, etc.).

Sales per square foot

Calculated as (Total sales - Returns) / Square footage.

Retail site selection factors

Economic climate, business climate, competition, demographics, accessibility.

Breadth in assortment strategy

Number of product lines offered.

Depth in assortment strategy

Varieties within a product line.

Price skimming

Setting high initial price then lowering it over time.

Bundle pricing

Offering package deals (like meal combos) at a discount.

Dynamic pricing

Prices that change based on demand (like Uber surge pricing).

Value formula

Value = Perceived benefits / Price.

Cost-based pricing problems

Ignores demand and competition, assumes all products sell at full price.

SWOT

Strengths, Weaknesses, Opportunities, Threats.

Cash cow in BCG matrix

Low market growth but high market share business.

Implementation approaches

Communicate goals, seek feedback, reward performance, schedule tasks.

Marketing plan components

Executive summary, SWOT, objectives, strategy, budget, controls.

Competitive parity budgeting

Matching competitors' marketing spending levels.

Collaborative filtering

"Customers who bought this also bought..." recommendations.

Phishing

Fake emails designed to steal personal information.

Showrooming

Examining products in-store then buying online for cheaper.

Augmented reality in retail

Technology that lets you view products in your own space.

First-party cookies

Website visitor tracking by the site you're visiting.

Licensing as a market entry strategy

Allowing another company to use your brand for royalties.

Joint venture

Shared ownership between companies (often 50/50).

Multinational marketing

Adapting products/marketing to each country's preferences.

Quota

A limit on the amount of product allowed to enter/leave a country.

Shrinking globe concept

Increased global connectivity through technology and trade.

Maintained markup formula

Final selling price - Cost.

Stockturn rate formula

Cost of goods sold / Average inventory.

Break-even price formula

(Total fixed costs / Units sold) + Variable cost per unit.

Target ROI price formula

(Total fixed costs + Desired ROI) / Units sold + Variable cost per unit.

Same-store sales growth

Compares sales from stores open during the same periods.