Chapter 14 The distribution Mix: Marketing Channels

distribution channel
also known as marketing channel, is a system for conveying goods or services from producers to customers
intermediaries
or marketing intermediaries, are the people or firms that move products between producer and customers
agents and brokers
specialists who bring buyers and sellers together and help negotiate a transaction
wholesalers
also known as middle men, are intermediates who sell products to other businesses for resale to ultimate customers or to institutions and businesses for use in their operations
retailers
are intermediates who sell products directly to customers
distribution mix
the combination or distribution channels a company uses to get its products to customers
distribution strategy
the overall plan for moving products from producer to customers
direct channel
the distribution channel in which a producer sells directly to consumers
utility
want- satisfying ability
market coverage
product distribution among locations
tensive distribution
the product is distributed among as many locations as possible
selective distribution
a product is distributed in preferred locations, where it will get special attention
exclusive distribution
the product is distributed in only a few locations
manufacturer-owned wholesaler
a wholesale business that is owned and operated by a product’s manufacturer
manufacturer’s branch office
is an office that is owned and managed by a manufacturer that not only has offices for sales representatives but also carries an inventory from which the staff can fill orders
manufacturer’s sales office
an office that is owned and managed by a manufacturer and that has offices for sales representatives who sell products that that are delivered at a later time
full-service merchant wholesaler
an independently owned firm that takes title to – becomes- owner of – the manufacturer’s products but performs only selected services
rack-jobber
limited function wholesaler who furnishes products and display racks or shelves in retail or stores and shares profits with retailers
cash-and- carry wholesaler
a limited function that sells mainly to small retailers, who come to the wholesaler, pay cash for a product
drop shipper
is a limited function wholesaler who owns (has title to) the products, but does not have physical custody of them, rather the drop shipper takes order and has the producer ship the product directly to the customer
nonstore retailers
sells merchandise in ways other than through retail stores
direct selling
consists of face-to-face selling directly to customers in their homes or where they work
multilevel marketing (MLM)
in which independent businesspeople or distributors, sell products both on their own and by recruiting, motivating, supplying, and training others to sell those products, with the distributors’ compensation being based on both their personal sales and the group’s sales
direct marketing
is not done face to face but consists of selling directly to customers using mail or telephone
direct mail marketing
consists of mail promotions- letters, brochures, and pamphlets sent through the postal service to customers
catalog marketing
mail-order marketing, consists of mail customer catalogs, from which they may choose merchandise to be ordered via mail, telephone, or online
telemarketing
consists of using the telephone to sell products directly to customers
video marketing
marketing to consumers on television, either through special cable TV channels or through certain programs on regular TV channels
online retailing
also known as electronic retailing, the nonstore retailing of products directly to consumers using the internet
physical distribution
consists of all the activities required to move products from the manufacturer to the final buyer
supply chain
the sequence of suppliers that contribute to creating and delivering product, from raw materials to production to final buyers
supply chain management
the strategy of planning and coordinating the movement of materials and products along the supply chain, from raw materials to final buyers
logistics
consists of planning and implementing the details of moving raw materials, finished goods, and related information along the supply chain, from origin to points of consumption to meet customer requirements
intermodal shipping
combines use of several different modes of transportation
containerization
in which products are packaged into 20- or 40-foot long containers at the point of origin and retrieved from the containers at the point of destination
freight forwarder
an organization that bundles many small shipments together into a single large shipment for more cost-effective transportation
warehousing
the element of physical distribution that is concerned with storage of goods
materials handling
the physical handling of goods to and from and within warehouses
storage warehouses
provide storage of products for long periods of time
distribution centers
provide storage of products for short periods of time for collection and distribution elsewhere
promotion mix
the combination of tools that a company uses to promote a product, selecting from among four promotional tools; 1. advertising 2. public relations 3. personal selling 4. sales promotion
integrated marketing communication
combines all four promotional tools to execute a comprehensive, unified promotional strategy
infomercials
extended TV commercials ranging from 2 to 28.5 minutes that are devoted exclusively to promoting a product in considerable detail
push promotional strategy
aimed at wholesalers and retailers to encourage them to market the product to consumers
pull promotional strategy
aimed directly at consumers to get them to demand the product from retailers
product placement
in which the sellers of a product pay to have that product prominently placed in a TV show or film so that many people will get to see it
advertising
defined as paid nonpersonal communication by an identified sponsor using various media to inform an audience about a product
brand advertising
consists of presentations that promote specific brands to ultimate consumers
institutional advertising
consists of presentations that promote a favorable image for an organization
advocacy advertising
concerned with supporting a particular opinion about an issue
public service advertising
consists of presentations that promote a favorable image for an organization
informational advertising
provides consumers with straightforward knowledge about the features of the product offered
reminder advertising
triest to remind consumers of the existance of a product
competitive advertising
promotes a product by comparing it more favorably to rival products
direct-action advertising
attempts to stimulate an immediate or relatively intermediate, purchase of a product through such devices as one-day sales, one-time promotions, or announcements of special event
fear-appeal advertising
attempts to stimulate the purchase of a product by motivating consumers through fear of loss or harm
advertising media
the variety of communication methods for carrying a seller’s message to prospect buyers
media planning
the process of choosing the exact kinds of media to use for an advertising campaign
frequency
the average number of times each member of the audience is exposed to an ad
reach
the number of people within a given population that your ad will reach at least once
cost per thousand
the cost of a particular medium charge to reach 1,000 people with an ad
publicity
defined as unpaid coverage by the mass media about a firm or its products
press release
a brief statement written in the form of a news story or a video program that is released to the mass media to try to get favorable publicity for a firm or its products
public relations
concerned with creating and maintaining a favorable image of the firm, its products, and its actions with the mass media, consumers, and the public at large
press conference
calling media representatives to a press briefing at which they announce new information
personal selling
is face-to-face communication and promotion to influence customers to buy goods and services
creative selling
is the selling process in which salespeople determine customer needs, then explain their product’s benefits to try to persuade buyers to buy the product
order processing
consists of receiving customer orders and seeing that they are handled correctly and that the product is delivered
sales support
consists not of selling products but of facilitating the sale by providing the sale by providing supportive services
prospecting
the process of identifying potential customers who are called prospects
referral sales prospecting technique
consists of asking satisfied customers to provide names of potential customers or to contract them on behalf of the salesperson
endless-chain sales prospecting technique
consists of asking each sales prospect to provide the salesperson with some names of other prospects who might be interested in the product
cold-call sales prospecting technique
consists of calling on prospects with whom you have had no previous contact and to whom you do not have any kind of introduction
qualifying
determining if the prospect has the authority to buy and the ability to pay
canned presentation
uses a fixed, memorized selling approach to present the product
need-satisfaction presentation
consists of determining customer needs and then tailoring your presentation to address those needs
trial close
a question or statement that tests the prospect’s willingness to buy
actual close
the salesperson concludes the presentation by asking the prospect to purchase the product
sales promotion
defined as short-term marketing incentives to stimulate 1. dealer interest 2. consumer buying
trade promotion
business to business sales promotion
trade show
a gathering of manufacturers in the same industry who display their products to their distributors and dealers
word of mouth marketing
a promotional technique that relies on people telling others about products they’ve purchased or firms they’ve used
buzz marketing
using high-profile entertainment or news to get people to talk about their product
viral marketing
in which companies pay people to promote their products to others