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194 Cards in this Set
- Front
- Back
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Supply Chain Management
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The effort to coordinate suppliers, manufacturers, warehouses, stores, and transportation intermediaries so that the merchandise the customer wants is produced in the right quantities and sent to the right locations at the time the customer wants it.
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The value added by the supply chain
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Without a supply chain, consumers would be forced to find raw materials, manufacture products, and somehow get them to where they could be used, all on their own. Each step in the supply chain adds value to the product by performing one of these functions
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The flow of information in the supply chain
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Flow 1: Customer to Store
Flow 2: Store to Buyer Flow 3: Buyer to Manufacturer Flow 4: Store to Manufacturer Flow 5: Store to Distribution Center Flow 6: Manufacturer to Distribution Center and Buyer |
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The flow of merchandise in the supply chain
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Flow 1: Manufacturer to Retailer Distribution Centers
Flow 2: Manufacturer directly to Stores Flow 3: Distribution Centers to Stores Flow 4: Retailer to Customer |
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Types of vertical marketing (supply chain management) systems
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-Administered
-Contractual -Corporate |
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Administered Vertical Marketing System
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A supply chain system in which there is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship
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Advanced Shipping Notice (ASN)
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An electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer what to expect in the shipment
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Checking
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The process of going through the goods upon receipt to ensure they arrived undamaged and that the merchandise ordered was the merchandise received
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Coercive Power
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A type of marketing channel power that occurs when the channel member exerting the power threatens to punish or punishes another channel member for not undertaking certain tasks it wants it to do
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Collaborative Planning, Forecasting, and Replenishment (CPFR)
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An inventory management system that uses an electronic data interchange (EDI) through which a retailer sends sales information to a manufacturer
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Consignment
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Part of a VMI (Vendor Managed Inventory) program whereby the manufacturer owns the merchandise until it is sold by the retailer
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Contractual Vertical Marketing System
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A system in which independent firms at different levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict
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Corporate Vertical Marketing System
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A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios
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Cross-Dock
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A distribution center to which vendors ship merchandise prepackaged and ready for sale. So the merchandise goes to a staging area rather than into storage. When all the merchandise going to a particular store has arrived in the staging area, it is loaded onto a truck, and away it goes. Thus, merchandise goes from the receiving dock to the shipping dock.
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Cycle Time
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The time between the decision to place an order and the receipt of merchandise
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Dispatcher
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The person who coordinates deliveries to distribution centers
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Distribution Center
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A facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists
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Electronic Data Interchange (EDI)
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The computer-to-computer exchange of business documents from a retailer to a vendor and back
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Expertise Power
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A type of marketing channel power that occurs if the channel member exerting the power has expertise that the other channel member wants or needs and can therefore get them to do what they want
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Floor-Ready Merchandise
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Merchandise that is ready to be placed on the selling floor immediately
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Franchising
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A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor
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Horizontal Channel Conflict (Horizontal Supply Chain Conflict)
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A type of channel conflict in which members at the same level of a marketing channel, for example, two competing retailers or two competing manufacturers, are in disagreement or discord, such as when they are in a price war
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Independent (Conventional) Supply Chain
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A loose coalition of several independently owned and operated supply chain members--a manufacturer, a wholesaler, and a retailer--all attempting to satisfy their own objectives and maximize their own profits often at the expense of the other members
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Information Power
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A type of marketing channel power that occurs if the channel member exerting the power has information that the other channel member wants or needs and can therefore get them to do what they want.
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Just-In-Time Inventory Systems
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Inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise "just-in-time" for it to be used in the manufacture of another product, in the case of parts or components, or for sale when the customer wants it, in the case of consumer goods; also known as quick response (QR) systems in retailing
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Lead Time
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The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, ready for sale
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Legitimate Power
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A type of marketing channel power that occurs if the channel member exerting the power has a contractual agreement with the other channel member that requires the other channel member to behave in a certain way. This type of power occurs in an administered vertical marketing system
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Logistics Management
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The integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory, and finished good from the point of origin to the point of consumption
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Marketing Channel
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The set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption; consists of all the institutions and marketing activities in the marketing process
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Pick Ticket
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A document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas
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Power
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A situation that occurs in a marketing channel in which one member has the means or ability to have control over the actions of another member in a channel at a different level of distribution, such as if a retailer has power or control over a supplier
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Pull Supply Chain
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Strategy in which orders for merchandise are generated at the store level on the basis of demand data captured by point-of-sales terminals
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Push Supply Chain
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Strategy in which merchandise is allocated to stores on the basis of historical demand, the inventory position at the distribution center, and the stores' needs
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Quick Response
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An inventory management system used in retailing; merchandise is received just in time
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Radio Frequency Identification Tag (RFID)
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Tiny computer chips that automatically transmit to a special scanner all the information about a container's contents or individual products
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Receiving
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The process of recording the receipt of merchandise as it arrives at a distribution center or store
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Referent Power
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A type of marketing channel power that occurs if one channel member wants to be associated with another channel member. The channel member with whom the others wish to be associated has the power and can get them to do what they want
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Reward Power
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A type of marketing channel power that occurs when the channel member exerting the power offers rewards to gain power, often a monetary incentive, for getting another channel member to do what it wants it to do
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Strategic Relationship (Partnering Relationship)
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A supply chain relationship that the members are committed to maintaining long term, investing in opportunities that are mutually beneficial; requires mutual trust, open communication, common goals, and credible commitments
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Supply Chain Management
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Refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels their customers require
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Ticketing and Marking
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Creating price and identification labels and placing them on the merchandise
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Universal Product Code (UPC)
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The black and white bar code found on most merchandise
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Vendor-Managed Inventory
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An approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores
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Vertical Channel Conflict (Vertical Supply Chain Conflict)
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A type of channel conflict in which members of the same marketing channel, for example, manufacturers, wholesalers, and retailers, are in disagreement or discord
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Vertical Marketing System
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A supply chain in which the members act as a unified system; there are three types: administrated, contractual, and corporate
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Wholesaler
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Those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods, (usually in smaller quantities) to retailers or industrial or business users
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The four factors manufacturers should consider as they develop their strategy for working with retailers
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1. Determine how likely it is that certain retailers would carry their products and whether target customers expect to find their products for sale at those retail locations
2. Identify types of retailers that would be appropriate locations for their products 3. Work with their retail partners to develop a strategy that comprises the four Ps 4. With their retail partners, determine which elements of a multichannel strategy will be effective. |
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Outline the considerations for choosing retail partners
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-Note the basic channel structure
-Consider where their target customers expect to find products, which depends largely on the retailer's image -Channel member characteristics -Level of distribution intensity |
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Three levels of distribution intensity
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- Intensive
- Exclusive - Selective |
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Identify the benefits of stores
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Because consumers often have just a general idea of what they want to purchase, stores' main benefits come from giving shoppers a place to browse.
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Benefits of multichannel retailing
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It can exploit the benefits and mitigate the limitations of each channel in order to expand overall market presence
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Challenges of multichannel retailing
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Retailers must organize their operations carefully to ensure an integrated customer experience
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Big Box Retailers
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Discount stores that offer a narrow but deep assortment of merchandise; see category killer
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Cannibalization
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Customers who formerly made purchases through one retail channel switch to a different retail channel without increasing the overall sales to the retailer
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Category killer
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A specialist that offers an extensive assortment in a particular category, so overwhelming the category that other retailers have difficulty competing
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Category specialist
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A retailer that offers a narrow variety but a deep assortment of merchandise
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Close-out retailers
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Stores that offer an inconsistent assortment of low priced, brand name merchandise
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Convenience Stores
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Type of retailer that provides a limited number of items at a convenient location in a small store with a speedy checkout
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Conventional Supermarket
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Type of retailer that offers groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format
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Cookie
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Computer program, installed on hard drives, that provides identifying information
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Department Stores
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A retailer that carries many different types of merchandise (broad variety) and lots of items within each type (deep assortment); offers some customer services; and is organized into separate departments to display its merchandise
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Distribution Intensity
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The number of supply chain members to use at each level of the supply chain
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Drugstores
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A specialty store that concentrates on health and personal grooming merchandise, though pharmaceuticals may represent more than 60% of its sales
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Exclusive distribution
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Strategy in which only selected retailers can sell a manufacturer's brand
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Extreme Value Food Retailers
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Retailers that offer only one or two brands or sizes of most products (usually including a store brand) and attempt to achieve great efficiency to lower costs and prices; also limited assortment supermarkets
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Extreme Value Retailers
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A general merchandise discount store found in lower-income urban or rural areas
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Factory Outlets
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Outlet stores owned by manufacturers
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Full-line discount stores
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Retailers that offer low prices, limited service, and a broad variety of merchandise
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Home improvement center
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Category specialist that offers home improvement tools for contractors and do-it-yourselfers
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Intensive Distribution
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A strategy designed to get products into as many outlets as possible
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Irregulars
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Merchandise with minor construction errors
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Limited Assortment Supermarkets
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Retailers that offer only one or two brands or sizes of most products (usually including a store brand) and attempt to achieve great efficiency to lower costs and prices; also Extreme Value Food Retailer
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Mobile Commerce (M-Commerce)
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Communicating with or selling to consumers through wireless handheld devices such as cellular phones
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Multichannel strategy
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Selling in more than one channel (e.g. stores, internet, catalog)
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Off-price retailers
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A type of retailer that offers an inconsistent assortment of merchandise at relatively low prices
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Online Chat
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Instant messaging or voice conversation with an online sales rep.
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Opt in
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The option giving consumer complete control over the collection and dissemination of his/her personal information, usually referred to in an Internet setting
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Opt out
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The option whereby consumer must actively choose to prevent personal information from being used or shared with third parties, usually referred to in an Internet setting
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Outlet stores
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Off-price retailers that often stock irregulars, out-of-season merchandise, or overstocks from the parent company
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Retailing
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The set of business activities that add value to products and services sold to consumers for their personal or family use; includes products bought at stores, through catalogs, and over the internet, as well as services like fast-food, airlines, and hotels
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Selective distribution
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Lies between the intensive and exclusive distribution strategies; uses a few selected customers in a territory
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Service retailers
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A firm that primarily sells services rather than merchandies
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Share of wallet
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The percentage of the customer's purchases made from a particular retailer
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Specialty stores
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A type of retailer that concentrates on a limited number of complementary merchandise categories in a relatively small store
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Stock keeping unit (SKU)
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Individual items within each product category; the smallest unit available for inventory control
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Supercenters
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Large stores combining full-line discount stores with supermarkets in one place
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Warehouse Clubs
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Large retailers with an irregular assortment, low service levels, and low prices that often require membership for shoppers
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The components of the communication process
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-Sender
-Transmitter -Recipient -Environment -Feedback |
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Four steps of the AIDA model
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1. Awareness step
2. Interest step 3. Desire step 4. Action step |
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Advertising
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A paid form of communication from an identifiable source, delivered through a communication channel, and designed to persuade the receiver to take some action, now or in the future.
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AIDA Model
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A common model of the series of mental stages through which consumers move as a result of marketing communications: Awareness leads to Interests, which lead to Desire, which leads to Action
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Aided Recall
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Occurs when consumers recognize a name (e.g. of a brand) that has been presented to them
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Blog (Weblog)
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A web page that contains periodic posts; corporate blogs are a new form of marketing communications
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Brand awareness
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Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers
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Click-Through Rate (CTR)
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The number of times a user clicks on an online ad divided by the number of impressions
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Communication Channel
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The medium--print, broadcast the internet--that carries the message
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Decoding
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The process by which the receiver interprets the sender's message
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Direct Marketing
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When a firm maintains 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries
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Encoding
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The process of converting the sender's ideas into a message, which could be verbal, visual, or both
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Feedback loop
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Allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly
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Frequency
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Measure of how often the audience is exposed to a communication within a specified period of time
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Gross rating points (GRP)
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Measure used for various media advertising--print, radio, or television; GRP 5 reach 3 frequency
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Impressions
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The number of times an advertisement appears in front of the user
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Integrated Marketing Communications (IMC)
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Represents the promotion dimension of the four Ps; encompasses a variety of communication disciplines--general advertising, personal selling, sales promotion, public relations, direct marketing, and electronic media--in combination to provide clarity, consistency, and maximum communicative impact
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Lagged effect
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A delayed response to a marketing communication campaign
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Mobile Marketing
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Marketing through wireless handheld devices
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Noise
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Any interference that stems from competing messages, a lack of clarity in the message, or a flaw in the medium; a problem for all communication channels
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Objective-and-task method
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An IMC budgeting method that determines the cost required to undertake specific tasks to accomplish communication objectives; process entails setting objectives, choosing media, and determining costs
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Personal selling
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The two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision
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Public relations
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The organizational function that manages the firm's communications to achieve a variety of objectives, including building and maintaining a positive image, handling or heading off unfavorable stories or events, and maintaining positive relationships with the media
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Reach
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Measure of consumers' exposure to marketing communications; the percentage of the target population exposed to a specific marketing communication, such as an advertisement, at least once
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Receiver
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The person who reads, hears, or sees and processes the information contained in the message or advertisement
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Relevance
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A metric used to determine how useful an advertising message is to the consumer use
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Return on Investment (ROI)
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The amount of profit divided by the value of the investment. In the case of an advertisement, the ____ is (the sales revenue generated by the ad - cost of the ad) / cost of the ad
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Rule-of-thumb methods
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Budgeting methods that base the IMC budget on either the firm's share of the market in relation to competition, a fixed percentage of forecast sales, or what is left after other operating costs and forecast sales have been budgeted
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Sales promotions
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Special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays
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Search engine marketing (SEM)
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A type of web advertising whereby companies pay for keywords that are used to catch consumers' attention while browsing a search engine
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Sender
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The firm from which an IMC message originates; the sender must be clearly identified to the intended audience
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Social Media
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Media content used for social interactions, such as YouTube, Facebook, and Twitter
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Top-of-mind awareness
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A prominent place in people's memories that triggers a response without them having to put any though into it
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Transmitter
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An agent or intermediary with which the sender works to develop the marketing communications; for example, a firm's creative department or an advertising agency
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Steps in designing and executing an advertising campaign
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1. Identify their target market
2. Set advertising objectives 3. Set the advertising budget 4. Depict their product or service 5. Evaluate and select the media 6. Create the ad 7. Assess the impact of the ad |
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Three objectives of advertising
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-Inform
-Persuade -Remind Customers |
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The elements of a public relations toolkit
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-Publications
-Video and audio programs -Public service announcements -Annual reports -Media kits (e.g. press kits) -News releases, -Electronic media |
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Advertising
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A paid form of communication form an identifiable source, delivered through a communication channel, and designed to persuade the receiver to take some action, now or in the future
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Advertising Plan
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A section of the firm's overall marketing plan that explicitly outlines the objectives of the advertising campaign, how the campaign might accomplish those objectives, and how the firm can determine whether the campaign was successful
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Advertising Schedule
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The specification of the timing and duration of advertising
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Background
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In an advertisement, the backdrop, which is usually a single color
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Body Copy
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The main text portion of an ad
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Branding
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In an advertisement, the portion that identifies the sponsor of the ad
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Cause-related marketing
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Commercial activity in which businesses and charities form a partnership to market an image, a product, or a service for their mutual benefit; a type of promotional campaign
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Contest
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A brand-sponsored competition that requires some form of skill or effort
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Continuous advertising schedule
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Runs steadily throughout the year and therefore is suited to products and services that are consumed continually at relatively steady rates and that require a steady level of persuasive or reminder advertising
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Coupon
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Provides a state discount to consumers on the final selling price of a specific item; the retailer handles the discount
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Cross-promoting
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Efforts of two or more firms joining together to reach a specific target market
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Deal
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A type of short-term price reduction that can take several forms, such as a "Featured Price," a price lower than the regular price; a "buy one, get one free" offer; or a certain percentage "more free" offer contained in larger packaging; can involve a special financing arrangement, such as reduced percentage interest rates or extended repayment terms
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Emotional appeal
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Aims to satisfy consumers' emotional desires rather than their utilitarian needs
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Event sponsorship
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Popular PR tool; occurs when corporations support various activities (financially or otherwise), usually in the cultural or sports and entertainment sectors
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Flighting advertising schedule
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An advertising schedule implemented in spurts, with periods of heavy advertising followed by periods of no advertising
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Foreground
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In an advertisement, everything that appears on top of the background
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Headline
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In an advertisement, large type designed to draw attention
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Informational Appeal
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Used in a promotion to help consumers make purchase decisions by offering factual information and strong arguments built around relevant issues that encourage them to evaluate the brand favorably on the basis of the key benefits it provides
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Informative Advertising
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Communication used to create and build brand awareness, with the ultimate goal of moving the consumer through the buying cycle to a purchase
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Institutional Advertising
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A type of advertisement that informs, persuades, or reminds consumers about issues related to places, politics, or an industry (e.g. Got Milk? ads)
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Lift
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Additional sales cause by advertising
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Loyalty Program
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Specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time
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Mass Media
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Channels that are ideal for reaching large number of anonymous audience members; include national newspapers, magazines, radio, and television
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Media Buy
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The actual purchase of airtime or print pages
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Media Mix
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The combination of the media used and the frequency of advertising in each medium
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Media Planning
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The process of evaluating and selecting the media mix that will deliver a clear, consistent, compelling message to the intended audience
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Niche media
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Channels that are focused and generally used to reach narrow segments, often with unique demographic characteristics or interests
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Persuasive advertising
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Communication used to motivate consumers to take action
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Point-of-purchase (POP) dispay
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A merchandise display located at the point of purchase, such as at the checkout counter in a grocery store
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Posttestting
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The evaluation of an IMC campaign's impact after it has been implemented
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Premium
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An item offered for free or at a bargain price to reward some type of behavior, such as buying, sampling, or testing
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Pretesting
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Assessments performed before an ad campaign; is implemented to ensure that the various elements are working in an integrated fashion and doing what they are intended to do
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Product-focused advertisements
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Used to inform, persuade, or remind consumers about a specific product or service
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Public service announcements
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Advertising that focuses on public welfare and generally is sponsored by nonprofit institutions, civic groups, religious organizations, trade associations, or political groups; a form of social marketing
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Puffery
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The legal exaggeration of praise, stopping just short of deception, lavished on a product
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Pulsing advertising schedule
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Combines the continuous and flighting schedules by maintaining a base level of advertising but increasing advertising intensity during certain periods
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Rebate
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A consumer discount in which a portion of the purchase price is returned to the buyer in cash; the manufacturer, not the retailer, issues the refund
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Reminder advertising
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Communication used to remind consumers of a product or to prompt repurchases, especially for products that have gained market acceptance and are in the maturity stage of their life cycle
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Sales promotion
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Special incentives or excitement-building programs that encourage the purchase of a product service, such as coupons, rebates, contests, free samples, and point-of-purchase displays
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Sampling
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Offers potential customers the opportunity to try a product or service before they make a buying decision
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Social marketing
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The application of marketing principles to a social issue to bring about attitudinal and behavioral change among the general public or a specific population segment
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Sweepstakes
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A form of sales promotion that offers prizes based on a chance drawing of entrants' names
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Tracking
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Includes monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or the medium
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Unique Selling Proposition (USP)
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A strategy of differentiating a product by communicating its unique attributes; often becomes the common theme or slogan in the entire advertising campaign
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Viral Marketing Campaign
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A marketing phenomenon that encourages people to pass along a marketing message to other potential consumers
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Value added of personal selling
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-Education on product/service available
-Valuable advice -Can simplify buying process |
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Steps in personal selling process
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1. Generate a list of viable customers
2. Gather information about the customer and prepares for the presentation 3. Personal meeting between salesperson and customer 4. Ask for an order 5. Solidify the long term relationship by making sure the customer is satisfied with the purchase and address complaints |
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Key functions involved in managing a sales force
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- Determine whether to use a company sales force or manufacturer's representatives
- Determine what the primary selling responsibilities will be - Recruit and select salespeople - Train salespeople - Motivate and compensate salespeople - Evaluate the salespeople |
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Bonus
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A payment made at management's direction when the salesperson attains certain goals; usually given only periodically, such as the end of the year
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Closing the sale
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Obtaining a commitment from the customer to make a purchase
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Cold calls
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A method of prospecting in which salespeople telephone or go to see potential customers without appointments
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Commission
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Compensation or financial incentive for salespeople based on a fixed percentage of their sales
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Company sales force
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Comprised of people who are employees of the selling company and are engaged in the selling process
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Independent agents
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Salespeople who sell a manufacturer's products on an extended contract basis but are not employees of the manufacturer; also known as manufacturer's representatives or reps
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Leads
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A list of potential customers
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Manufacturer's representative
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Salespeople who sell a manufacturer's products on an extended contract basis but are not employees of the manufacturer; also known as independent agents
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Order getter
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A salesperson whose primary responsibilities are identifying potential customers and engaging those customers in discussions to attempt to make a sale
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Order taker
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A salesperson whose primary responsibility is to process routine orders or reorders or rebuys for products
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Personal selling
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The two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision
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Preapproach
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In the personal selling process, occurs prior to meeting the customer for the first time and extends the qualification of leads procedure; in this step, the salesperson conducts additional research and develops plans for meeting with the customer
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Qualify leads
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The process of assessing the potential of sales leads
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Relationship selling
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A sales philosophy and process that emphasizes a commitment to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial to all parties
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Role playing
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A good technique for practicing the sales presentation prior to meeting with a customer; the sales person acts out a simulated buying situation while a colleague or manager acts as the buyer
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Salary
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Compensation in the form of a fixed sum of money paid at regular intervals
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Sales contest
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A short-term incentive designed to elicit a specific response from the sales force
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Sales management
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Involves the planning, direction, and control of personal selling activities, including recruiting, selecting, training, motivating, compensating, and evaluating, as they apply to the sales force
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Sales support peronnel
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Employees who enhance and help with a firm's overall selling effort, such as by responding to the customer's technical questions or facilitating repairs
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Selling teams
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Combinations of sales specialists whose primary duties are order getting, order taking, or sales support but who work together to service important accounts
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Telemarketing
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A method of prospecting in which salespeople telephone potential customers
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Trade Shows
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Major events attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industy
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