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List the four steps involved in buying.
· Determine needs.
· Id and select sources
· Place order
· Evaluate Purchase
Name and briefly describe the three types of buying.
New Task Purchase
Modified Rebuy
Straight Rebuy
Identify some of the criteria buyers use to determine which supplier to go with.
When choosing ___________ buyers consider many factors including: Pricing
Stock (Suitability)
Shipping policies (Delivery, pays, etc.)
Reputation
Credit terms (2 percent saved if paid in the first 10 days, or the net price in 30 days, after which interest would be charged)
Related Services (return policy, sales aids, etc.)
Why do suppliers offer cash discounts?
As an incentive if they pay promptly and give the supplier immediate funds to reinvest in inventory, this supports a mutually beneficial relationship between supplier and retailer and reduces the likelihood of bad debts expense.
Difference between FOB Factory and Destination
The first describes that the retailer takes upon ownership of the product the moment it leaves the factory and is responsible for shipping costs/insurance.
The second describes that the retailer takes ownership of the product the moment it arrives at their destination(store) and is not liable for shipping costs/insurance.
What is FOB Factory
describes that the retailer takes upon ownership of the product the moment it leaves the factory and is responsible for shipping costs/insurance.
What is FOB Destination
describes that the retailer takes upon ownership of the product the moment it arrives at their destination(store) and are not liable for shipping costs/insurance.
Briefly explain how consignment works for a retailer.
It is profitable for retailers to buy all merchandise on consignment as they do not take on the risk of a product not selling, they are only liable if it stolen, damaged, or sold. Retailers do not have to pay for the products until they are sold and do not have to worry about tying up or losing capital on inventory costs.
Describe convenience good and a brief description and example product.
The many everyday items that are purchased frequently, quickly and with a minimum amount of effort. No store or brand loyalty.
a) Staple goods- Necessities(bread)
b) Impulse goods-Quick unplanned (Gum)
Describe shopping goods and a brief description and example product.
relatively expensive and purchased only after the customer has made product, brand and store comparisons. I.E Furniture/Appliances.
Describe specialty good and a brief description and example product.
Items for which customer has extreme brand or store loyalty. The customer knows exactly what they want and will go to considerable effort to get it.
i.e designer clothing, exotic cars.
Name each type of good and a brief description.
C The many everyday items that are purchased frequently
S relatively expensive and purchased only after the customer has made product, brand and store comparisons.
Sp. Items for which customer has extreme brand or store loyalty. The customer knows exactly what they want and will go to considerable effort to get it.
Distinguish, using examples, between a national brand and a private brand.
· National brands are brands that are owned, designed, produced, and marketed by a vendor and distributed nationally under a recognizable brand name.
Coca-Cola and Pepsi are national brands, as are Levi's and Wrangler.
· Private brands are brands that is developed exclusively for a specific retailer for sale in its store.
Our compliments and sensibles are examples of private brands for Safeway and co-op respectively.
Name each part of the product life cycle
intro, growth, maturity,decline
Using an example to illustrate the complete product life cycle.
Oldsmobile
Oldsmobile began producing cars in 1897.
After merging with General Motors in 1908, the company used the first V-8 engine in 1916.
By 1935, the one millionth Oldsmobile had been built.
In 1984, Oldsmobile sales peaked, selling more cars in that year than any other year.
By 2000, General Motors announced it would phase out the automobile and,
on April 29th, 2004, the last Oldsmobile was built.
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