Supply Chain, Distribution Channels, and Promotions

Flashcards on Supply Chain, Distribution, and Promotions

Supply Chain

All organizations involved in supplying to a firm, including distribution channels and end users.

Supply Chain Management

Management of value-adding flows among entities to maximize overall value.

Value Network

An overarching system of relationships where firms participate to procure, transform, enhance, and supply products.

Network Organizations/Virtual Organizations

Firms that formalize contracts with suppliers, distributors, and other partners to contribute to the value chain.

Nimble Organizations

Companies that are flexible, adaptable, and speedy in response to changes affecting business.

Channel of Distribution

Interdependent entities aligned to transfer product possession from producer to consumer.

Intermediary

A middleman that plays a role in exchange processes between manufacturer and consumer.

Agent

Acts as a supplemental sales force for manufacturer; does not take title to goods.

Distributor

Provides inventory management, promotions, financing, etc.

Wholesaler

Focuses on storing and handling goods, reducing holding costs, and takes title to goods.

Jobber

Sells goods bought from producers and provides labor savings for retailers by stocking shelves.

Retailer

Distribution outlet where the end customer buys the product.

Direct Channel

Channel where the manufacturer sells directly to the end user without intermediaries.

Physical Distribution Function

Involves breaking bulk, accumulating bulk, sorting, creating assortments, reducing transactions, transportation, and storage.

Transaction and Communication Function

Involves selling, buying, and all marketing communications activities.

Facilitating Function

Involves financing, market research, risk taking, and other services provided by channel intermediaries.

Breaking bulk

Delivering single units from distribution centers to retail outlets rather than multiple units.

Accumulating Bulk

Taking in products from multiple sources and transforming it, often through sorting.

Disintermediation

Shortening of marketing channels due to the elimination of one or more intermediaries.

Outsourcing/Third-Party Logistics (3PL)

Handing over core internal functions to third-party companies that are experts in those areas.

Reintermediation

Addition of intermediaries to the distribution channel.

Vertical Marketing System (VMS)

Vertically aligned networks behaving as a unified system to generate efficiencies in distribution.

Corporate Vertical Marketing System

One channel partner buys other companies in the distribution channel.

Contractual Vertical Marketing System

Independent entities legally bound through contractual agreements.

Administered Vertical Marketing System

One channel member controls others due to sheer size and clout.

Channel Conflict

Occurs when channel members experience disagreement, leading to inefficiencies.

Coercive Power

Involves an implicit or explicit threat.

Reward Power

Being rewarded for working with a channel captain.

Expert Power

Utilizing unique competencies to influence others in the channel.

Referent Power

When a channel member is respected and admired.

Legitimate Power

Comes as a result of contracts such as franchise agreements.

Distribution Intensity

Number of intermediaries involved in distributing the product.

Intensive Distribution

Designed to saturate every possible intermediary.

Selective Distribution

Selecting specific retail places or distribution channels.

Exclusive Distribution

Exclusive distribution for products with prestige, premium pricing, and scarcity.

Push Strategy

Intensive promotional activities from manufacturer through the distribution channel.

Pull Strategy

Directed towards consumers, using heavy advertising, direct marketing, etc.

Order Processing

Receiving and processing customer orders.

Enterprise Resource Planning (ERP)

Software designed to integrate information related to logistic processes throughout the organization.

Just-In-Time

An inventory control system to balance having too many goods versus stock outs.

Exclusive Dealing

Restrictive agreement prohibiting intermediary from handling products from competing firms.

Exclusive Territory

Intermediary is protected from having to compete with others selling a producer's goods.

Tying Contracts

Requiring an intermediary to purchase a supplementary product to purchase a primary product.

Promotion

Communication with customers/potential customers designed to inform, persuade, or remind.

Interactive Marketing

Promotion through digital technologies that does not involve a salesperson.

Advertising

Paid form of relatively less personal marketing communications.

Sales Promotion

Provides an inducement for an end user consumer to buy a product.

Public Relations

A non-paid form of promotion where the company's name appears in news stories.

Personal Selling

One-to-one personal communication with a customer by a salesperson.

Internal Marketing

Treating employees as customers and marketing the brand to them.

AIDA Model

Attention, Interest, Desire, Action - a model used to understand the sales process and consumer behavior.

Digital Marketing

Marketing of value offerings through the use of digital technologies.

Paid Media

Marketing communication channels requiring the marketer to pay for customer access.

Owned Media

Marketing communication channels that the marketer's organization has complete control over.

Earned Media

A customer or commercial entity chooses to act as a marketing communication channel at no cost.

Banner Ad

Boxes embedded into a website with graphics, text, video, and hyperlinks.

Interstitial Ad

Similar to a pop-up ad, but occupies the whole screen.

Retargeting

Display ads for a product shown on different websites after a customer visits the product website.

Search Ads

Ads displayed with the results produced by search engines.

Social Network Ads

Digital ads displayed in various forms of social media.

Native Ads

Digital ads designed to fit the format and style of the content on the website.

Institutional Advertising

Promoting an industry.

Product Advertising

Designed to advertise a specific product or brand.

Pioneering Advertising

Stimulating demand for a new product, typically used during the introductory and growth stages.

Competitive Advertising

Advertising focused on showing how a product is better than the competition.

Comparative Advertising

Two or more brands are directly compared with each other.

Slice of Life

Portrays regular people in everyday settings.

Humor

Gains attention and interest through humorous portrayal.

Mood/Affect

Setting a positive tone around offerings.

Product Placement

Company placing their brand in a TV show or movie.

Trade Show

Event where industrial companies set up booths for information and sales to channel members.

Cooperative Advertising and Promotion

Manufacturer provides incentive money to channel members for specific performances.

Allowances

Money made available to channel members for selling products, making large orders, etc.

Public Relations (PR)

Systematic approach to influencing attitudes, opinions, and behaviors.

Event Sponsorships

Sponsoring events (sports, music) to highlight products.

Trade Servicers

Resellers who increase business from current or potential customers.

Missionary Sellers

Persuading customers to buy products from distributors or other suppliers.

Technical Salesperson

Salesperson that is an engineer or technical person.

Key Account Salespeople

Responsible for managing large accounts and developing complex solutions.