Business
AnEarlyBird
summary_ch13.rtfPart 1
13-1 identify the various distribution channels and explain the concept of market coverage.
A marketing channel is a sequence of marketing organi- zations that directs a product from producer to ultimate user. The marketing channel for a particular product is concerned with the transfer of ownership of that prod- uct. Merchant middlemen (merchants) actually take title to products, whereas functional middlemen simply aid in the transfer of title.
The channels used for consumer products include the direct channel from producer to consumer, the chan- nel from producer to retailer to consumer, the channel from producer to wholesaler to retailer to consumer, and the channel from producer to agent to wholesaler to retailer to consumer. There are two major channels of industrial products: producer to user and producer to agent middleman to user.
Channels and intermediaries are chosen to imple- ment a given level of market coverage. Intensive distri- bution is the use of all available outlets for a product, providing the widest market coverage. Selective distri- bution uses a portion of the available outlets in an area. Exclusive distribution uses only a single retail outlet for a product in a large geographic area.
13-2 understand how supply-chain management facilitates partnering among channel members.
Supply-chain management is a long-term partnership among channel members working together to create a distribution system that reduces inefficiencies, costs, and redundancies, while creating a competitive advantage and satisfying customers. Cooperation is required among all channel members, including manufacturing, research, sales, advertising, and shipping. When all channel partners work together, delivery, scheduling, packaging, and other customer requirements are better met. Technology makes supply-chain management easier to implement.
13-3 Discuss the need for wholesalers, describe the services they provide, and identify the major types of wholesalers.
Wholesalers are intermediaries that purchase from producers or other intermediaries and sell to indus- trial users, retailers, or other wholesalers. Wholesal- ers perform many functions in a distribution channel. If they are eliminated, other channel members—such as the producer or retailers—must perform these func- tions. Wholesalers provide retailers with assistance in promoting products, collecting information and financing. They provide manufacturers with sales assistance, reduce their inventory costs, furnish market informa- tion, and extend credit to retailers.
Merchant wholesalers buy and then sell products. Commission merchants and brokers are essentially agents and do not take title to the goods they distribute. Sales branches and offices are owned by the manufac- turers and resemble merchant wholesalers and agents, respectively.
13-4 Distinguish among the major types of retailers and shopping centers.
Retailers are intermediaries that buy from producers or wholesalers and sell to consumers. In-store retailers include department stores, discount stores, warehouse showrooms, convenience stores, supermarkets, super- stores, warehouse clubs, traditional specialty stores, off-price retailers, and category killers. Nonstore retail- ers use direct selling, direct marketing, and automatic vending, instead of conventional stores. Types of direct marketing include catalog marketing, direct-response marketing, telemarketing, television home shopping, and online retailing.
There are four major types of shopping centers: lifestyle, neighborhood, community, and regional. Each of these centers has a varying mix of stores and serves geographic areas of different sizes.
13-5 explain the five most important physical distribution activities.
Physical distribution consists of activities designed to move products from producers to ultimate users. Its five major functions are inventory management, order pro- cessing, warehousing, materials handling, and transpor- tation. These interrelated functions are integrated into marketing efforts.
13-6 explain how integrated marketing communications works to have the maximum impact on the customer.
Integrated marketing communications is the coordina- tion of promotion efforts to achieve maximum informa- tional and persuasive impact on customers.
13-7 understand the basic elements of the promotion mix.
Promotion is communication about an organization and its products that is intended to inform, persuade, or remind target market members. The major ingredients of a promotion mix are advertising, personal selling, sales promotion, and public relations. The role of pro- motion is to facilitate exchanges directly or indirectly and to help an organization maintain favorable rela- tionship with groups in the marketing environment.
13-8 explain the three types of advertising and describe the major steps of developing an advertising campaign.
Advertising is a paid nonpersonal message communi- cated to a specific audience through a mass medium. Primary-demand advertising promotes the products of an entire industry rather than just a single brand. Selec- tive-demand advertising promotes a particular brand of product. Institutional advertising is image-building advertising for a firm.
An advertising campaign is developed in several stages. A firm first identifies and analyzes its advertis- ing target. The goals of the campaign must be clearly defined. Then the firm develops the advertising plat- form and determines the size of the advertising budget. The next steps are to develop a media plan, to create the advertising message, and to execute the campaign. Finally, promotion managers must evaluate the effec- tiveness of the advertising efforts before, during, and/or after the campaign.
13-9 recognize the kinds of salespersons, the steps in the personal-selling process, and the major sales management tasks.
Personal selling is personal communication aimed at informing customers and persuading them to buy a firm’s products. It is the most adaptable promotional method because the salesperson can modify the mes- sage to fit individual buyers. The major types are order getters, order takers, and support personnel. The sixsteps in the personal-selling process are prospecting, approaching the prospect, making the presentation, answering objections, closing the sale, and follow- ing up. Sales managers are involved directly in setting sales force objectives, recruiting, selecting, and training salespersons, compensating and motivating sales per- sonnel, creating sales territories, and evaluating sales performance.
13-10 Describe sales promotion objectives and methods.
Sales promotion is the use of activities and materials as direct inducements to customers and salespersons. Sales promotions enhance and supplement other promotional methods. Methods of sales promotion include rebates, coupons, samples, premiums, frequent-user incentives, point-of-purchase displays, trade shows, buying allow- ances, and cooperative advertising.
13-11 understand the types and uses of public relations.
Public relations is a broad set of communication activi- ties used to create and maintain favorable relationships between an organization and various public groups, both internal and external. Organizations use a variety of pub- lic relations tools to convey messages and create images. Brochures, newsletters, company magazines, and annual reports are written public-relations tools. Speeches, event sponsorship, and publicity are other public-relations tools. Publicity is communication in news-story form about an organization, its products, or both. Types of publicity include news releases, feature articles, captioned photographs, and press conferences. Public relations can also be used to promote people, places, activities, and ideas. It can be used to enhance the reputation of an organization and reduce the unfavorable effects of negative events.
Part 2
Refer to section 13-2 which discusses supply chain management. Do some research and identify a company that has successful supply chain management practices. Discuss specific aspects of their supply chain management and evaluate how these practices increase efficiency in their distribution process.
