BA 101

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  1. marketing intermediaries
    firms that participate in moving the product from the producer toward the customer
  2. direct channel
    the situation when a producer of a product deals directly with customers
  3. one-level channel
    one marketing intermediary is between the producer and the customer
  4. merchants
    marketing intermediaries that become owners of products and then resell them
  5. agents
    marketing intermediaries that match buyers and sellers of products without becoming owners
  6. two-level channel
    two marketing intermediaries are between the producer and the customer
  7. market coverage
    the degree of product distribution among outlets
  8. intensive distribution
    the distribution of a product across most or all possible outlets
  9. selective distribution
    the distribution of a product through selected outlets
  10. exclusive distribution
    the distribution of a product through only one or a few outlets
  11. independent retail store
    a retailer that has only one outlet
  12. chain
    a retailer that has more than one outlet
  13. full-service retail store
    a retailer that generally offers much sales assistance to customers and provides servicing if needed
  14. self-service retail store
    a retailer that does not provide sales assistance or service and sells products that do not require much expertise
  15. specialty retail store
    a retailer that specializes in a particular type of product
  16. variety retail store
    a retailer that offers numerous types of goods
  17. nonstore retailer
    retailer that does not use a store to offer its products or services
  18. vertical channel integration
    two or more levels of distribution are managed by a single firm
  19. A direct channel of distribution allows the producers to easily obtain feedback on the product and the opportunity to correct any deficiencies.  The disadvantages of a direct channel of distribution, however, are
    • - the product must employ more salespeople
    • - the producer must provide all product promotions (some intermediaries might be willing to promote the proudcts for producers); and
    • - the producers may have to provide credit to customers and incur the rish of bad debt (some intermediaries might be willing to incur this risk).
  20. The optimal channel of distribution is dependent on the product's ease of transportation: the greater the ease, the more likely that intermediaries could be used.  It is also dependent on the product's degree of standardization: the more standardized the product, the more likely that intermediaries could be used.
  21. The three types of market coverage are:
    • - intensive distribution, which is used to distribute the product across most or all outlets
    • - selective distribution, which is used to intentionally avoid some outlets; and
    • - exclusive distribution, which uses only one or a few outlets.
  22. The most common forms of transportation are truck, rail, air, water, and pipeline.  Trucks can reach any destination on land with the ability to make multiple stops.  Railroads are useful for heavy products being transported over long distances.  Air transportation can be quick and relatively inexpensive for light items.
  23. Firms may accelerate their distribution process by reducing the channels of distribution.  Alternatively, they may improve the integration between the distribution and production processes.  The distribution process relies on the production process to have products ready when needed.
  24. Retailers serve as intermediaries for manufacturers by distributing products directly to customers.  Each retailer is distinguised by its characteristics, such as number of outlets (independent versus chain), quality of service (self-service vs full-service), variety of products offered (specialty vs variety), and whether it is a store or a nonstore retailer.
  25. Wholesalers serve manufacturers by:
    • - maintaining the products purchased at their own warehouse, which allows manufacturers to maintain smaller inventories
    • - using their sales expertise to sell products to retailers; and
    • - delivering the products to retailers;
  26. Wholesalers serve retailers by:
    • - maintaining sufficient inventory so that retailers can order samll amounts frequently
    • - sometimes promoting the products they sell to the retailers;
    • - setting up product displays for retailers;
    • - offering products on credit to retailers;
    • - informing retailers about policies implemented by other retailers regarding the pricing of products, allocation of space, and so on.
  27. Vertical channel integration is the managing of more than one level of the distribution system by a single firm.  A manufacturer of a product may create an intermediary such as a retail store to distribute the product.  Alternatively, an intermediary may decide to produce the product instead of ordering it from manufacturers.
Card Set
BA 101
Distributing Products
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