Distribution Strategies and Channel Partners
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Questions and Answers

What does disintermediation refer to?

  • Increasing the prices of products through intermediaries
  • Cutting out the middleman to reduce costs (correct)
  • Adding more intermediaries in the supply chain
  • Creating new marketing channels

The consumer markets in North America are rapidly diminishing.

False (B)

What is one challenge faced by businesses in third-world countries regarding marketing channels?

Lack of good intermediary systems

A ____ strategy involves creating demand among consumers so that businesses agree to sell a product.

<p>pull</p> Signup and view all the answers

Which of the following is NOT a type of consumer sales promotion?

<p>Loyalty programs (D)</p> Signup and view all the answers

Match the following channel functions with their corresponding descriptions:

<p>Sorting = Breaking down large quantities into smaller units Storing = Maintaining reserve inventory Distributing = Moving goods between channel members Assuming Ownership Risk = Determining shipping costs and ownership titles</p> Signup and view all the answers

Premiums offered as part of sales promotions are usually available to consumers at no cost.

<p>False (B)</p> Signup and view all the answers

Which of the following is NOT a function of wholesalers and distributors?

<p>Directly marketing to consumers (D)</p> Signup and view all the answers

What is a rebate?

<p>A refund of part or all of the purchase price after submitting proof of purchase.</p> Signup and view all the answers

Inventory storage is free for all channel members.

<p>False (B)</p> Signup and view all the answers

Trade shows are typically events where firms display and demonstrate their ________ to other organizations.

<p>offerings</p> Signup and view all the answers

What is the significance of the free-on-board (FOB) provision in shipping?

<p>It designates shipping cost responsibilities and ownership titles.</p> Signup and view all the answers

Match the following sales promotion types with their descriptions:

<p>Coupons = Immediate price reductions offered to consumers Free samples = Allows consumers to try a product before purchasing Loyalty programs = Programs rewarding repeat customers Trade allowances = Incentives for channel partners to push products</p> Signup and view all the answers

Which sales promotion method involves providing incentives to salespeople to boost sales?

<p>Contests (B)</p> Signup and view all the answers

Event marketing is a type of trade promotion.

<p>True (A)</p> Signup and view all the answers

What is the primary goal of trade promotions?

<p>To incentivize channel partners and sales teams to promote and sell products.</p> Signup and view all the answers

What is the primary focus of a nondisclosure agreement (NDA)?

<p>To specify what information is proprietary (D)</p> Signup and view all the answers

Intensive distribution is used primarily for high-end luxury products.

<p>False (B)</p> Signup and view all the answers

Name one example of a product that often uses intensive distribution.

<p>Soft drinks</p> Signup and view all the answers

In selective distribution, products are sold at __________ outlets.

<p>select</p> Signup and view all the answers

Which of the following distribution types would likely limit sales to only one outlet in a specific area?

<p>Exclusive Distribution (A)</p> Signup and view all the answers

Match the following types of distribution with their characteristics:

<p>Intensive Distribution = Sold in many outlets Selective Distribution = Available in chosen locations Exclusive Distribution = Limited to one outlet Direct Distribution = Sold directly to consumers</p> Signup and view all the answers

Perishable products can be sold through longer marketing channels.

<p>False (B)</p> Signup and view all the answers

What is channel power?

<p>The ability of channel partners to influence the marketing channel's dynamics.</p> Signup and view all the answers

What pricing strategy involves setting a high initial price to attract early buyers?

<p>Price skimming (C)</p> Signup and view all the answers

Penetration pricing aims to maintain the status quo by matching competitors' prices.

<p>False (B)</p> Signup and view all the answers

What is the objective of everyday low pricing?

<p>To maintain a consistent price throughout the product's life cycle.</p> Signup and view all the answers

In status quo pricing, companies aim to match their prices to their _______ prices.

<p>competitors'</p> Signup and view all the answers

Match the following pricing approaches to their descriptions:

<p>Cost plus = Adding a standard markup to the cost of a product Odd-even = Setting prices just below a round number, e.g., $4.99 Prestige = Increasing price to suggest higher value Leader = Pricing certain items low to attract customers in-store</p> Signup and view all the answers

Which pricing adjustment strategy means buyers pay the same shipping costs regardless of location?

<p>Uniform-delivered (B)</p> Signup and view all the answers

Trade allowances are a form of discount provided to consumers for purchasing products in bulk.

<p>False (B)</p> Signup and view all the answers

What is the key feature of captive pricing?

<p>Customers must buy a specific product as there are no alternatives.</p> Signup and view all the answers

Which promotional method involves using a percentage of last year's sales?

<p>Percentage of last year's sales (D)</p> Signup and view all the answers

Older consumers prefer mobile marketing and social media more than college-aged students.

<p>False (B)</p> Signup and view all the answers

What does the AIDA model stand for?

<p>Attention, Interest, Desire, Action</p> Signup and view all the answers

The specific benefit consumers will remember about a product is known as its ______.

<p>unique selling proposition</p> Signup and view all the answers

Match the advertising appeal with its description:

<p>Humorous = Uses comedy to attract attention Emotional = Connects with feelings Frightening = Induces fear to provoke action Rational = Uses logical reasoning to persuade Environmentally conscious = Promotes sustainability</p> Signup and view all the answers

What is a characteristic of horizontal conflict?

<p>Occurs between organizations of the same type (D)</p> Signup and view all the answers

What is a drawback of the affordable method for determining a promotion budget?

<p>It may not accurately reflect actual costs. (D)</p> Signup and view all the answers

Channel leaders have little influence on how channel conflicts are resolved.

<p>False (B)</p> Signup and view all the answers

Regulations can have an impact on the type of promotion used by organizations.

<p>True (A)</p> Signup and view all the answers

Name one component of Integrated Marketing Communications (IMC).

<p>Advertising</p> Signup and view all the answers

What is one method companies use to keep promotional spending comparable to competitors?

<p>Competitive parity</p> Signup and view all the answers

The stage in the product life cycle influences the type and amount of __________ used.

<p>promotion</p> Signup and view all the answers

Match the following promotional strategies with their definitions:

<p>Direct Marketing = Delivery of personalized and often interactive materials to consumers Consumer Sales Promotions = Short-term incentives to boost sales Mobile Marketing = Promotions via text messages and mobile apps Public Relations = Managing communication with the public</p> Signup and view all the answers

Which of the following is a factor that influences the promotion mix?

<p>Budget available (A)</p> Signup and view all the answers

Consumers are typically not receptive to promotions delivered directly to them.

<p>False (B)</p> Signup and view all the answers

What is one type of promotion that often requires professional selling?

<p>Very technical products</p> Signup and view all the answers

Flashcards

Disintermediation

Cutting out intermediaries in a supply chain to sell products more cheaply.

International Marketing Channels

Channels for selling products across borders.

Push Strategy

Convincing middlemen to sell a product, focusing on convincing intermediaries to stock and sell.

Pull Strategy

Creating demand from consumers to get businesses to sell a product (focuses on customer demand).

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Sorting and Regrouping

Wholesalers/distributors break down large quantities into smaller units for variety.

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Storing Inventory

Maintaining a supply of products to meet customer demand, to prevent lost sales.

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Distributing Products

Moving products through the channel from one member to another.

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Ownership Risk (e.g. FOB)

Determining who is responsible for shipping costs and product ownership in a transaction.

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Nondisclosure Agreement (NDA)

A contract outlining confidential information and its usage limits.

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Intensive Distribution

Selling products in as many outlets as possible.

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Selective Distribution

Selling products in selected outlets.

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Exclusive Distribution

Selling through one or a few outlets in a region.

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Channel Power

Influence a channel partner has with other partners.

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Channel Conflict

Disagreements among channel members.

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Channel Cooperation

Working together among channel members.

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Channel Integration

Connecting channel operations.

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Horizontal Conflict

Conflict between organizations of the same type (e.g., two manufacturers).

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Channel Leaders

Organizations (e.g., Walmart) that have significant influence on how channel conflicts are resolved.

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Mobile Marketing

Reaching customers through mobile devices (e.g., text messages).

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IMC (Integrated Marketing Communications)

Using different promotion channels (TV, radio, etc.) to convey a consistent message.

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Sales Promotions

Short-term incentives like coupons or contests to boost sales.

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Direct Marketing

Personalized promotional materials sent directly to consumers (e.g., mail, email).

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Professional Selling

Interactive marketing where a seller interacts directly with a buyer.

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Promotion Mix Factors

Factors affecting what promotion methods are used (budget, product life cycle, target audience).

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Consumer Media Preferences

Different age groups prefer different media channels for marketing.

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Promotional Regulations

Laws restricting certain types of advertising (e.g., tobacco on TV).

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Media Availability

Marketing needs to consider the availability of media slots (e.g., TV ads).

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AIDA Model

A marketing framework to guide ad creation (Attention, Interest, Desire, Action).

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Advertising Appeals

Different ways to connect with consumers (e.g., humor, emotions, fear).

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Unique Selling Proposition (USP)

A specific benefit consumers get from a product that differentiates it.

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Promotion Budget Methods

Strategies for allocating resources to promotion.

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Objective and Task Method

Determining the promotion budget based on specific marketing goals and objectives.

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Consumer Sales Promotion

Marketing strategies used to encourage immediate consumer purchases.

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Loyalty Programs

Incentivize repeat business through rewards programs.

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Rebates

Partial or full refunds given for product purchases.

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Trade Promotions

Incentives to encourage sales businesses to other businesses.

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Trade Shows

Events where businesses display products to other businesses.

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Sales Contests

Incentives for salespeople to boost sales, usually with higher profit products.

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Trade Allowances

Incentives (discounts) given to channel partners to sell products.

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Advertising Allowances

Incentives for retailers to advertise products.

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Price Skimming

Setting a high initial price to attract customers willing to pay a premium for early access and recoup investment.

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Penetration Pricing

Setting a low initial price to quickly gain market share and compete with existing products.

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Everyday Low Pricing (EDLP)

Maintaining a consistent low price for a product throughout its life cycle.

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Status Quo Pricing

Matching competitor prices to maintain market position and avoid price wars.

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Cost-Plus Pricing

Determining price by adding a markup percentage to the cost of production.

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Odd-Even Pricing

Setting prices slightly below a whole number, such as $4.99, to create a perception of a lower price.

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FOB Origin

Buyer pays shipping from the seller's location.

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FOB Destination

Seller pays shipping to buyer's location.

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Study Notes

Distribution Strategies

  • Channel members are firms that partner with a company to promote and sell products through the marketing channel
  • Intermediaries are organizations that facilitate product delivery to consumers
  • Supply chains are all organizations involved in the process of producing, promoting, and delivering a product or service
  • Supply chain management involves constantly monitoring and improving the efficiency of supply chains
  • Wholesalers obtain large quantities of products from producers, store them, and break them down into smaller units for retailers
  • Wholesalers perform various services such as stocking inventories, operating warehouses, supplying credit, employing salespeople and delivering goods
  • Limited-service wholesalers provide fewer services but lower prices
  • Drop shippers earn a commission by finding sellers and passing orders to them for shipping
  • Mail-order wholesalers use catalogues and ship products to buyers

Types of Channel Partners

  • Wholesalers
    • Merchant wholesalers (distributors, dealers, jobbers) take title to goods
    • Full-service wholesalers provide extensive services
    • Limited-service wholesalers offer fewer services at lower prices
    • Drop shippers find sellers and ship orders
    • Mail-order wholesalers use catalogues for sales and shipping
  • Retailers buy from wholesalers, agents, or distributors and sell to consumers
  • Agents/Brokers negotiate sales contracts without taking title to the product

Other Distribution Concepts

  • Truck jobbers specialize in perishable goods like fish, and specialty goods like books, hosiery, and magazines
  • Supermarkets provide a full range of food and some household products
  • Convenience stores offer miniature supermarket services
  • Drugstores concentrate on over-the-counter and prescription medicines, and health and beauty items
  • Category killers dominate specific product categories and specialize in selling high volumes of a particular product type
  • Department stores offer a broad range of merchandise including clothing and jewelry
  • Superstores combine larger department stores with groceries
  • Warehouse clubs sell products at discounted prices
  • Online retailing utilizes electronic channels for sales
  • Outlet stores sell products that couldn't be sold through normal retail channels, often due to manufacturing defects
  • Used retailers sell used products

Brokers

  • Brokers don't purchase products but negotiate sales contracts
  • They work with producers and are geographically assigned for sales by producers
  • They specialize in commodities like clothing, furniture, food and lumber

Direct and Indirect Channels

  • Direct channel involves a producer and consumer with no intermediaries
  • Indirect channels utilize intermediaries such as wholesalers or agents

Cutting Out the Middleman

  • Large retailers like Target and Walmart sometimes bypass intermediaries by purchasing directly from manufacturers

International Marketing Channels

  • Consumer and business markets in North America are well-developed and growing slowly
  • Growth opportunities exist in other countries
  • Some markets may lack good intermediary systems

Marketing Communications and Promotion

  • Disseminating marketing communications and promoting brands is vital for informing stakeholders
  • Push strategies convince distributors and retailers to sell products, whereas pull strategies focus on creating consumer demand
  • Sorting and regrouping products is important for efficient distribution, breaking down large quantities into smaller units for easier handling
  • Storing and managing inventory ensures availability when needed
  • Moving products physically necessitates reliable distribution and shipping arrangements
  • Ownership risk and credit implications are central to the distribution considerations
  • A free-on-board (FOB) provision designates when responsibility for shipping costs transfers from seller to buyer

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Distribution Strategies PDF

Description

Explore the intricate world of distribution strategies and the various types of channel partners involved in delivering products to consumers. This quiz covers roles of intermediaries, wholesaler functions, and the dynamics of supply chains and supply chain management.

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