What is a set of interdependent organizations that help make a product or service of a company available for use by consumers are business users?

also called a marketing channel, as sets of interdependent organizations involved in the process of making a product or service available for use or consumption, as well as providing a payment mechanism for the provider.

• First, the channel consists of organizations,
• Second, the channel management process is continuous and requires continuous monitoring and reappraisal
• Finally, channels should have certain distribution objectives guiding their activities

• Product flow: the movement of the physical product from the manufacturer through all the parties who take physical possession of the product until it reaches the ultimate consumer
• Negotiation flow: the institutions that are associated with the actual exchange processes
• Ownership flow: the movement of title through the channel
• Information flow: the individuals who participate in the flow of information either up or down the channel
• Promotion flow: the flow of persuasive communication in the form of advertising, personal selling, sales promotion, and public relations

• Product flow: the bottlers receive and process the bases and syrups
• Negotiation flow: the bottlers buy concentrate, sell product and collect revenue from customers
• Ownership flow: distributors acquire the title of the syrups and own the product until it’s sold to supermarkets
• Information flow: bottlers communicate product options to customers and communicate demand and needs to Coca-Cola
• Promotion flow: bottlers communicate benefits and provide promotional materials to customers

the buyer is able to make contact with many different product types in a more efficient way from a single store (market or grocery store)

• The producer of the product: a craftsman, manufacturer, farmer, or other producer
  
• The user of the product: an individual, household, business buyer, institution, or government
  
• Middlemen at the wholesale and/or retail level
  

functions of channel partner

1. Transactional functions: buying, selling, and risk assumption
2. Logistical functions: assembly, storage, sorting, and transportation
3. Facilitating functions: post-purchase service and maintenance, financing, information dissemination, and channel coordination or leadership

• First, although you can eliminate or substitute channel institutions, the functions performed by these institutions cannot be eliminated
  
• Second, all channel institution members are part of many channel transactions at any given point
• Third, the fact that you are able to complete all these transactions to your satisfaction, as well as to the satisfaction of the other channel members, is due to the routinization benefits provided through the channel

is the simplest channel. In this case, the producer sells directly to the consumer Exp:

• Etsy.com online marketplace
• Farmer’s markets
• Oracle’s personal sales team that sells software systems to businesses
• A bake sale

is the way a retailer sells and delivers merchandise and services to customers. (most common is a store) Exp:

• Walmart discount stores
• Amazon online store
• Nordstrom department store
• Dairy Queen restaurant

looks very similar to the retail channel, but it also involves a wholesaler. A wholesaler is primarily engaged in buying and usually storing and physically handling goods in large quantities, which are then resold (usually in smaller quantities) to retailers or to industrial or business users Exp:

• Christmas-tree wholesalers who buy from growers and sell to retail outlets
  
• Restaurant food suppliers
  
• Clothing wholesalers who sell to retailers
  

Agents and brokers are different from wholesalers in that they do not take title to the merchandise. In other words, they do not own the merchandise because they neither buy nor sell. Instead, brokers bring buyers and sellers together and negotiate the terms of the transaction Exp:

• An insurance broker, who sells insurance products from many companies to businesses and individuals
• A literary agent, who represents writers and their written works to publishers, theatrical producers, and film producers
• An export broker, who negotiates and manages transportation requirements, shipping, and customs clearance on behalf of a purchaser or producer

The Role of Intermediaries

• Purchasing: By purchasing large quantities or volumes, wholesalers are able to secure significantly lower prices
• Warehousing and Transportation: Once the wholesaler has purchased a mass quantity of goods, it needs to get them to a place where they can be purchased by consumers
• Grading and Packaging : this includes physically sorting, grading, and assembling the goods
• Risk Bearing:
  
1. First, it means that the wholesaler finances the purchase of the goods and carries the cost of the goods in inventory until they are sold
2. Second, wholesalers also bear the risk for the products until they are delivered
• Marketing:

a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer

Supply Chain and Marketing Channels

• The supply chain is broader than marketing channels
• Marketing channels are purely customer facing
• Marketing channels are part of the marketing mix

The Channel Management Process

1. Analyze the Consumer: what the customer needs, where they buy, when they buy, why they buy from certain outlets, and how they buy
2. Establish the Channel Objectives: are based on customer requirements, the marketing strategy, and the company strategy and objectives
3. Specify Distribution Tasks : After the distribution objectives are set, it is appropriate to determine the specific distribution tasks (functions) to be performed in that channel system. The channel manager must be very specific in describing the tasks and also detail how these tasks will change depending upon the situation
4. Evaluate and Select Among Channel Alternatives: number of levels, intensity at the various levels, types of intermediaries at each level, and application of selection criteria to channel alternatives
5. Evaluating Channel Member Performance: Sales is the most popular performance criterion used in channel evaluation. Other possible performance criteria are maintenance of adequate inventory, selling capabilities, attitudes of channel intermediaries toward the product, competition from other intermediaries and from other product lines carried by the manufacturer’s own channel members.

The Human Aspect of Distribution

• Role: means defining what the behavior of the channel member should be
• Communication: is sending and receiving information that is relevant to the operation of the channel
• Conflict:
• Structural conflict occurs when the channel partners are expected to cooperate and compete
• Establishing a mechanism for detecting conflict
• Evaluating the effects of the conflict
• Resolving the conflict
• Power: refers to the capacity of a particular channel member to control or influence the behavior of another channel member

1. Spacial convenience: Can I get the product at or near the location where I want it?
2. Timing of availability: Do I need the product immediately or am I willing to wait?
3. Quantity: Am I willing to buy in bulk or buy multiple items?
4. Assortment and variety: Do I have a very particular need or a flexible need? Am I looking for one or many options?
5. Service: Do I require assistance or support through the purchase process?
6. Information: Do I need information to make a purchase, or do I enter the buying process having already made a decision?

Retailing involves all activities required to market consumer goods and services to ultimate consumers who are purchasing for individual or family needs.

• Department Stores: carry many different types of merchandise
• Chain Stores: a store that is part of a group of the same stores owned and operated by a single organization
• Supermarkets: carry an extensive line of food items and often nonfood products
• Discount Retailers: are characterized by a focus on price as their main sales appeal
• Warehouse Retailers: provide a bare-bones shopping experience at very low prices.
• Franchises: The franchise approach brings together national chains and local ownership. An owner purchases a franchise which gives her the right to use the firm’s business model and brand for a set period of time
• Malls and Shopping Centers: provide customers with a wide assortment of products across many stores
• Online Retailing: Amazon
• Catalog Retailing Many retailers who depended on catalog sales—Sears, Land’s End, and J.C. Penney, to name a few—suffered as online retailers and online sales from traditional retailers pulled convenience shoppers away from catalog sales
• Nonstore Retailing: vending machine, kiosk

The retail marketing strategy includes all of the elements of the traditional marketing mix:

• Retailers buy product from producers or wholesalers that will most appeal to their target market.
  
• Retailers set a price that delivers value for the product and the complete shopping experience.
  
• Retailers promote their offering, which includes the shopping experience, the products, the pricing, and broadly, the retail brand.
  
• Retailers create the right place, which is the point of purchase for the buyer

Two additional Ps come into play: presentation and personnel.

• Presentation:
• Online Presentation

Personnel: Retail employees are the face of the brand to the shopper

Components of a Supply Chain

1. Sourcing and Procurement
1. Sourcing is the process of finding, evaluating, and engaging suppliers to provide goods and services to a business. Procurement is the process of purchasing the goods and services
2. Demand Planning, Order Fulfillment, and Inventory
1. Demand planning begins early in the new-product development process in order to develop the business case
2. Supply chain management can help with the forecast and fulfillment process
3. Inventory is an asset that is intended to be sold in the ordinary course of business
3. Warehousing and Transportation: A distribution center is a warehouse or storage facility where the emphasis is on processing and moving goods on to wholesalers, retailers, or consumers
4. Logistics and Information Management
1. The physical movement of goods is called logistics
2. 
   

Just in Time (JIT) Inventory

Inventory system in which companies manufacture or purchase goods just in time for use.

a unique identification number that defines an item for ordering or inventory purposes

electronic data interchange (EDI)

EDI allows the trucking company to know exactly what it is shipping, and it gives the sending and receiving companies detailed, real-time tracking and status reports.

radio frequency identification (RFID)

product tags with tiny chips containing information about the item's content, origin, and destination

Why is it important in supply chain management for suppliers to have visibility into a company’s forecast and sales data? Suppliers can build or deplete their inventory. Suppliers can maintain their supply of products based on the original demand forecast numbers.

Suppliers can adjust their supply of products depending on the market demand.

If an asset is intended to be sold in the ordinary course of business and but it may not be immediately ready for sale, then it is considered to be ________. distributions
supplies

A warehouse or storage facility where the emphasis is on processing and moving goods to wholesalers, retailers, and/or consumers is called a ________. just-in-time center
Term

Which of the following best explains the process that finds, evaluates, and engages suppliers to provide goods and services to a business?
demand planning procurement

Which of the following is the term for the process of purchasing the goods and services for a business?
demand planning sourcing

The Michael’s Craft Store begins to offer classes in crafting, cake decoration, and scrapbook design. Which of the following best explains Michael’s current approach? It is overreaching its place as a retailer in customers’ minds. It is confusing customers because the classes are incongruent with the Michael’s brand.

It is expanding its offering to create greater contact efficiency for its customers.

If a retail store focuses on price as its main sales appeal and has a broad selection of merchandise, which type of a retail store is it? a supermarket retailer
chain store retailer

Which type of retail approach brings national chains to local ownership? online retailing
malls and shopping centers

The retail industry is designed to create ________. a master retail plan multiple market forces

contact efficiency for consumers

If a retail store like Guitar Center allows the consumer to buy products and services efficiently with a smaller number of transactions, then that store is creating ________. a master retail plan for consumers marketing forces for consumers PreviousNext

contact efficiency for consumers

Keith enjoys cutting hair and he just graduated from a cosmetology program. He has opened up his own shop, but it has not grown very much in its first year. Keith decides maybe it’s better to try a brand recognition of a national chain, but he wants to stay in his local area and be the owner of the shop. Which type of retail model would fit Keith’s business goal best?
online retailing malls and shopping centers PreviousNext

A large auto auction company has personnel that specializes in sourcing. Once car suppliers are found and evaluated, another group of employees purchases the cars to sell at the auction. Which of the following is known as a component of a supply chain during the purchasing process? demand planning sourcing
PreviousNext

There are four considerations for channel alternatives that need to be determined: number of levels, intensity at each level, specific types of intermediaries, and the application of selection criteria to channel alternatives. Which other questions about channel alternatives should be answered? What intermediary will offer discounts?

Who will be in charge of the selected channels?

Which dimensions should a marketer consider when dealing with the human aspect of distribution channels?

communication, conflict, roles, and power

The first step of channel management is to analyze the consumer. Which of the following are the two questions a marketer should answer for this step? What is it that we are selling to the consumer?

• To whom can we sell this merchandise immediately?
  
• Who are our ultimate buyers and users?
• 
  

Alyson is new to the Tubbs snowshoe company and is getting up to speed on Tubbs’s newest product launch, snowshoes for dogs. She has been put in charge of setting up the channel of distribution and analyzing the consumer for this new product line. Which initial questions should Alyson ask herself for this first step? Who are our ultimate buyers and users? To whom can we sell this merchandise immediately? What is it that we are selling to the consumer? PreviousNext

• Who are our ultimate buyers and users?
  
• To whom can we sell this merchandise

Teressa is working with an existing distribution for industrial materials. She discovers that in order for the channel to work effectively she needs to understand which behavioral characteristics of the people working in the channel? culture, content, education, and location
demographics, orientation, objectives, and strategy PreviousNext

communication, conflict, roles, and power

Which of the following are the main considerations of creating a channel objective? consumer ideas, company finances, and marketing mix tools

marketing strategy, company strategy and objectives, customer requirements

Third-party sales are ________. generated by direct sales online straightforward because the product sells directly to the consumer

conducted by anyone other than the producer of a product or service

Sets of interdependent organizations participating in the process providing a payment mechanism for a provider while making a service or product accessible and available for use or consumption is the definition of ________. product marketing
positioning and differentiation

a channel of distribution

If a channel manager is talking about the knowledge, instructions, messages, and communication that is happening with people up and down a distribution channel, she is speaking about which area of flow? promotion flow negotiation flow

Which three functions are necessary between channel partners for an efficient flow of title and product to a customer and for payment back to the product producer? facilitating, commercial, and institutional functions logistical, commercial, and transactional functions

transactional, logistical, and facilitating functions

Kroger, a grocery store chain, sells thousands of products from hundreds of different producers that are shipped through a variety of shipping companies and stored at various warehouses facilities. The coordinated efforts with each channel partner at each touch point takes efficiency and communication. In order for the process to run smoothly, which three functions do channel partners need to perform to efficiently flow products and titles to the consumer to get payments back to producers? logistical, commercial, and transactional functions facilitating, commercial, and institutional functions
PreviousNext

transactional, logistical, and facilitating functions

Which of the following is the primary purpose of any channel of distribution? to generate models of efficiency and streamline organizational outcomes
to create a relationship between a variety of businesses and organizations

to bridge the gap between a product’s producer and a product’s user

Which channel flow areas from the perspective of a channel manager are included in a flow framework?
service flow, negotiation flow, information flow, promotion flow, and profit flow product flow, ownership flow, information flow, cash flow, and redundancy flow

product flow, negotiation flow, ownership flow, information flow, and promotion flow

Blue Avocado makes reusable lunch and food bags and sells its products through three local grocery stores, one home organization retail chain, and two additional stores that cater to elementary schools and online clientele. By having its products available in a variety of places, Blue Avocado is relying on which primary purpose of its distribution channels? generating models of efficiency and streamlines organizational outcomes creating a relationship between a variety of businesses and organizations
PreviousNext

bridging the gap between a product’s producer and a product’s user

Sam’s Club and Walmart use a system of warehouses to store and move merchandise around the country. These warehouses are known as ________.

What is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user?

What are sets of interdependent organizations?

Is a set of interdependent organizations involved in the process of making a product or service available for use?

In which kind of channel does a producer sell a product directly to the consumer?