Mkt Exam 2 11.07.12 Place

Front 1

Channel definition

Back 1

a set of interdependent organizations involved in the process of making a product or service available to the final consumer

because most manu don't sell directly to customer

Front 2

Common consumer marketing channels (3)

Back 2

1. Manufacturer-customer----like Dell

2. Manufacturer-retailer-consumer---grocery store, dep store

3. Manu-wholesaler-retailer-consumer

Front 3

Wholesaler (aka distributor)

Back 3

Have sales force that help manu reach many small business customers at a low cost (have many contacts, retailers trust them more)

Hold inventories, reducing inventory costs and risks to retailers (buy big amount and only give to retailers when have need--small retailer can't buy in bulk, like Coke)

Achieve savings for retail clients by buying in discounted bulks, and breaking down into smaller units

reduce number of transactions?

Front 4

Three ways intermediaries add value

Back 4

1. Time utility-intermediaries can reduce search time, increase devlivery speed (as consumer, would have to contact every pop place..just go to one store)

2. Place utility (intermediaries can reduce distance between consumer and product

3. Product utility-intermediaries bridge the discrepancy between the assortment of goods produce and demanded..manufacturers produce a large quality of limited variety of goods..consumers generally desire a small quantity of wide variety of goods

Front 5

Showrooming

Back 5

shop in person, buy online

Front 6

push marketing

Back 6

the manufacturer uses its sales force, other means to induce intermediaries to carry, promote, sell the product to end users (taking the product to the customer..pushing customer)

Front 7

pull marketing

Back 7

the manufacturer uses advertising and promotion to induce consumers to seek out the brand and sak intermediaries for the product (I want my MTV)

Front 8

Channel coordination

Back 8

Each channel member makes decisions that affect other channel members' decisions/actions (if retailer changes shelf location, decreases volume, manu observes and reacts)..based on numbers

All channel members can exercise some control over other members' decisions/actions (as manu, might not know problem on shelf, but know numbers)

Front 9

Channel coordination problem (double marginalization)

Back 9

Occurs when an independent retailer sets a high price to max its own profit and the manufacturer also seeks to max own profit

Excessive margin for the entire channel can excluse consumers who would be profitable clients for an integrated channel

Front 10

How to solve double marginalization (vertical integration!)

Back 10

Buy up distribution channels/companies in between..make own parts

Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need. It is contrasted with horizontal integration. Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership, but also into one corporation (as in the 1920s when the Ford River Rouge Complex began making much of its own steel rather than buy it from suppliers).

Front 11

Problems with vertical integration (2)

Back 11

1. Reduces variety for consumers, makes shopping less convenient

2. Manu and retailers perform specialized functions with associated economies of scale (new decision maker may not have know how to manage both functions effectively)

Front 12

two types of vertical integration

Back 12

1. Forward vertical integration: incorporating distribution activities (going direct)

2. Backward vert integration (incorporating production of supplies...cookie maker makes own chocolate chips)

Front 13

Horizontal integration

Back 13

merging with acquiring peers who perform similar functions..Microsoft buying out smaller software companies

Front 14

3 important channel characteristics

Back 14

1. Length (number of intermed)-indirect or direct, or long vs. short...how many steps from manu to end user

2. Breadth (ease of accessing product)-exclusive distrib vs. mass distribution

3. Depth (degree of integration)-minimal vs. maximal forward/backward integration

Front 15

Channel length

Back 15

short is direct from manu..like Dell

Indirect (long) is always something in between..no mario store except in NYC

Front 16

Nike manages both

Back 16

direct and indirect channels

Front 17

Channel breadth

Back 17

exclusive (special shirt) vs mass (coke)..more breath not always better..scarf example

Front 18

Length and breadth

Back 18

Certain combinations are more common than others

Difficult to be direct and mass (hard to buy Coke from actual Coke tore)

Direct and exclusive, indirect and mass are more common

Front 19

Consumers who care about the supply chain care about

Back 19

the entire chain

Front 20

Degree of backward integration can be a point of differentiation examples (2)

Back 20

dominoes and Arby's slicing own meat

Front 21

Does MO/SOV influence characteristics of channels?

Back 21

Not clearly

Channel decisions vary widely across industries

Perishable products require more direct marketing

bulky products require channels and min shipping distance, amount of handling

In general, there is urge to go direct

Front 22

Common supermarket layout strategies (3)

Back 22

1. meat in back/right, milk in back/left meant to ensure shoppers pulled through all corners of store

2. Most shoppers right handed--make sure people move in counter clockwise pattern so left hand pushes cart, right takes down food

3. Fresh flowers and bakery upfront--pleasant smells reduce discipline

Also using background music

Front 23

Background music

Back 23

French music helps selection of french wine

Slower music produces slower shopping, more purchases

Enjoyable music descreases estimated shopping time (spend more money in less shopping time?)

Front 24

3 factors that must be considered when determining atmospherics

Back 24

1.human resource goals (hiring employees with lighting)--employee productivity and retention

2. Operational goals (how organize)-efficiency, cost reduction

3. Marketing goals (consumer attraction, consumer satisfaction, sales and retention)-how atract consumer, satisfaction

Front 25

Clutter can influence

Back 25

Price perception

Walmart tried to clean up and simplify store..customer satisfaction went up but sales decreased

Front 26

How to properly allocate shelf space

Back 26

Typically large supermarkets have 45000 different items

Each new product adopted by retailer is accompanied by uncertainty regarding where to display and optimal amount of shelf space to allocate

Improper locaiton or under allocation of space may kill a product before it hits full potential

Front 27

Trade promotions

Back 27

Manufacterers spend a great deal on trade promotions to motivate channel partners (retailers) to carry brand, provide good shelf space (pay for locations)

Often come in slotting fees (could be to get in shelf or stay on shelf)

Common belief: unseen is unsold

Front 28

2 benefits shelf space

Back 28

1. Two important attributes of shelf space (number of facings..how much space, and horizontal position)

2. Eyetracking study...diagram specifies for past product and location

Front 29

Measures of eye tracking (5)

Back 29

1. Noting (fixated on at least once)

2. Reexamination (at least twice)

3. Choice (if had to choose one brand, what be? questions after)

4. Consideration (any other brands you considered when making choice?)

5. Recall (please tell me names you remember)

Front 30

Data on eye tracking

Back 30

Center is best position between left and right

many people choose on past brand usage

Popularity also has big influence on choice

Front 31

3 implications of shelf shelves?

Back 31

1. Shelf space has powerful effects on attention that translate into small immediate effects on choice (only small effects in behaviors)

2. These small effects build up over time and contribute to important out of store factors (market share, past usage)

3. Large battles for attention are waged every day, but the battle lines of market share change slowly

Front 32

Jams

Back 32

More people stop for 24 james, but more people bought 6 jams..so many ways to get it wrong