Marketing - Exam 4

What is supply chain management?

Set of approaches and techniques that firms use to integrate suppliers, manufacturers, and warehouses so that products are distributed in the right quantity, right location, and right time while minimizing costs.

Why is supply chain management important?

Marketing channels and supply chain management allow companies to get their products in the appropriate outlets in sufficient quantities to meet consumer demand. Without the members of these two groups, consumers would be forced to find materials, manufacture products, and somehow get them to where they could be used all on their own.

How do marketing channels/supply chain management add value?

creates values for each firm in the chain and helps bind together many company functions, including manufacturing, inventory management, transportation, advertising, and marketing,

Who only sells to the retailers?

wholesalers do

Markup the price

What do wholesalers do before they sell to the retailers?

Who assumes the title of a product?

wholesaler

What does assuming the title of a product mean?

own the product, take a lot of risk, full financial responsibility 

What is the misconception about wholesalers?

That they drive up prices even though they have worked hard to keep prices low

Because of this misconception, what do wholesalers have to do?

continue proving themselves to be sufficient or else someone will eliminate them

Who is the middle man?

wholesalers are

who facilitates the sale

agents/brokers

agents and brokers bring who together

buyers and selling

How do agents/brokers make money

through comission

Do agents/brokers own their own products

No, wholesalers do

Who has more risk, agents/brokers or wholesalers?

wholesalers have more

Do agents/brokers take the title

No, wholesalers take this

what does EDI stand for?

electronic data interchange

what is EDI

computer-to-computer exchange of business documents from a retailer to a vendor and back

what is the benefit of EDI

it reduces cycle time

what is an example of EDI

sales data, purchase orders, invoices, and data about returned merchandise

what does RFID stand for?

 **Radio Fréquency Identification**

what is RFID

Tags, tiny computer chips that automatically transmit to a special scanner all the into about a product/container.

what is the advantage of RFIDs

Advantage: reduces overall inventory via efficiency \n eliminates the need to handle items individually

what does JIT stand for

Just in time

what is a just in time system

Manufacturing terms, raw materials are coming in just the right amount to make a finished product. \n Merchandise is fresher, neater when you are getting less \n Merchandize more frequently \n Lowering cost for manufacturer

what does Q-R stand for

quick response system

what does a Q-R system do

the exact same thing as just in time but for the retail world \n Ex: Dillards does not have to stock lots of merchandise on shelf, has automatic system gets in new shipment \n Customer Benefits: from getting fresher merchandise \n Retailer Benefits: because they don't pay for weeks worth but pay for days worth.

What is the difference between Just In Time and Quick Response Systems

Just in Time has reduced lead time, increase product availability with lower inventory investment while Quick Response Systems Deliver less merchandise on a more frequent basis

what are the four vertical marketing systems?

Independent \n Administered \n Contractual \n Corporate

Indépendant Marketing System

Several independent members (a manufacturer, wholesalers, and retailers) attempt to satisfy their own objectives and maximize their profits, often at the expense of other members. \n None of the participants have any control over the other.

Administered Marketing System

No common ownership or contractual relationships, but the dominant channel member controls or holds the balance of power.

Contractual Marketing System

Firms at different levels of the supply chain join together through contracts to obtain economics of scale and coordination to reduce conflict.

Corporate Marketing System

Parent company has complete control and can dictate the priorities and objectives of the marketing channel because it owns multiple segments of the channel.

using a direct marketing channel, a customer can do what

purchase goods from the manufacturer without needing to go through a retailer or intermediary, this generally happens online or at company stores

what is an example of a direct marketing channel

shopping at an Apple store

indirect marketing channel strategy happens when

manufacturers choose to offer their goods to consumers through an intermediary, such as a retailer

what is an example of an indirect marketing channel

buying from Walmart

Direct marketing channels occur when?

there is no intermediary between the manufacturer and the consumer. This can occur between B2B as well as B2C. 

Indirect marketing channel strategies occur when

there IS an intermediary between the manufacturer and the consumer. This is usually done by a retailer. There can be one or more than one intermediary in indirect marketing channels. 

Distribution centers are

a warehouse that is owned by a large retailer

What is an example of a distribution center?

target distribution center in Elgin: size of five football fields, individual shipments go out from there to stores

Fulfillment centers are

Designed to ship out individual packages to customers 

Retailing

business activities that add value to products and services sold to consumers for their personal or family use; includes products bought at stores, through catalogs, and over the Internet, as well as services like fast-food restaurants, airlines, and hotels.

Retailing Unique Features

breaking bulk, assortment, atmospherics, provide services

Breaking Bulk

Refers to the way wholesalers achieve savings for their customers THROUGH buying merchandise in large lots and breaking the bulk into smaller units

Assortment

Different types of products that a business makes or a retailer offers for sale: breadth, length, depth, consistency

atmospherics

Physical characteristics and surrounding influence of a retail store that is used to create and image in order to attract customers

Provide Services

Provide services to customers (ex. valet, coat check)

Service Retailers

Firms that primarily sell services rather than merchandise are a large and growing part of the retail industry (banks, hospitals)

intensive distribution

Designed to get products into as many outlets as possible (Pepsi, Kraft) \n \n Convenience

Exclusive Distribution

Sold in just a few outlets (Coach, Polo) \n One retail outlet ultimate form of control, works when you have limited manufacturing capacity \n \n Specialty

Selective distribution

Pick and choose retail outlets \n \n Shopping

Food retailers have

supermarkets, superstores, convenience stores, warehouse club

General merchandise retailers have

full line discount, specialty, category specialist, department, drug, off price, extreme value

Service retailers have

auto rental, health spa, vision center, bank

Supermarkets have

limited food, and are differentiated by number of SKUs

Supercenter definition

Large store that combines a full-line discount store with a supermarket in one place.

What are some examples of supercenters

Walmart, Meijer, K-Mart, Target

Warehouse club definition

Large retailer with an irregular assortment, low service levels, and low prices that often requires membership for shoppers.

Warehouse clubs have

low assortment, little service, and low prices

What are some examples of warehouse clubs

Costco, Sams,

Convenience stores definition

Type of retailer that provides a limited number of items at a convenient location in a small store with speedy checkout.

Convenience stores have

limited variety and speedy checkouts as well as good locations

Specialty Store

A type of retailer that concentrates on a limited number of complementary merchandise categories in a relatively small store.

Department stores

A retailer that carries many different types of merchandise (broad variety) and lots of items within each type (deep assortment); offers some customer services; and is organized into separate departments to display its merchandise.

Category specialists

A retailer that offers a narrow variety but a deep assortment of merchandise.

Extreme Value Retailer

A general merchandise discount store is found in lower-income urban or rural areas.

Off price retailer

A type of retailer that offers an inconsistent assortment of merchandise at relatively low prices.

Product

Providing the right mix of merchandise and services that satisfies the needs of the target market. Private-label or store brands help retailers distinguish themselves from the competition.

Price

defines the value of both the merchandise and the service provided

Promotion

used both within their retail environment and through mass and social media

Place

Convenient location is a key ingredient to success, Many customers choose stores on the basis of where they are located, Great locations can create a competitive advantage.

Presentation

Lighting, color, and music are used to highlight merchandise and create a mood that will attract the store’s target markets.

Personnel

Well-trained sales personnel can influence the sale at the point of purchase.

Share of wallet

The percentage of the customer’s purchases made from a particular retailer.

**omnichannel (multichannel) strategy**

Selling in more than one channel (e.g., stores, Internet, catalog).

Benefits of omnichannel strategy

Deeper and broader selection, Personalization, Expanded market presence, Integrated CRM, Brand Image, Pricing, and Supply Chain.

Customer Relationship Management

System with a centralized customer data warehouse that houses a complete history of each customers' interaction with the retailer.

Benefits of Stores for Consumers

1\. Browsing \n 2. Touching and Feeling \n 3. Personal Service \n 4. Cash and Credit \n 5. Entertainment and Social Interaction \n 6. Instant Gratification \n 7. Risk Reduction

Benefits of the Internet and Omnichannel Retailing

Deeper and Broader Selection \n Personalization- gain insights into consumer shopping behavior \n Increase customer satisfaction and loyalty \n Expand Market Presence

Effective Omnichannel Retailing

Integrated CRM \n Brand Image \n Pricing \n Supply Chain

Components of IMC

Customers \n Results \n Communication Channel

IMC definition

Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines—general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media—in combination to provide clarity, consistency, and maximum communicative impact.

Sender

The firm from which an IMC message originates; must be clearly identified to the intended audience.

Transmitter

An agent or intermediary with which the sender works to develop the marketing communications; for example, a firm’s creative department or an advertising agency.

Encoding

The process of converting the sender’s ideas into a message, which could be verbal, visual, or both.

Communications channel

The medium—print, broadcast, the Internet—that carries the message.

Receiver

The person who reads, hears, or sees and processes the information contained in the message or advertisement.

Decoding

The process by which the receiver interprets the sender’s message.

Noise

Any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium; a problem for all communication channels.

Feedback loop

Allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly.

Steps of the communication process

Sender (firm)—>transmitter encodes messages (words, pictures, jingles)—> communications (media)—>receiver (consumer) decodes message

AIDA model

A common model of the series of mental stages through which consumers move as a result of marketing communications: *A*wareness leads to *I*nterests, which lead to *D*esire, which leads to *A*ction.

Aided recall

An awareness metric that occurs when consumers recognize a name (e.g., of a brand) that has been presented to them.

What does AIDA stand for

awareness, interest, desire, action

Awareness

sender first must catch the attention of the consumer

Awareness metrics include

aided recall and top-of-mind awareness

TOMA

top-of-mind awareness

Top-of-mind awareness is

A prominent place in people’s memories that triggers a response without them having to put any thought into it.

Interest comes after

awareness