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business
chapter 7
82
Business
Undergraduate 1
03/12/2013

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Term
Distribution
Definition
is the process that maes products available to consumers when and where consumers want them.
Term
Supply chain
Definition
encompasses all the components both inside and outside an organization that are necessary to convert raw materials into a good or service and then get it into the hands of customers.
Term
supply chain management
Definition
managing the entire process of getting products out the door and eventually into the hands of final consumers.
Term
Three processes of supply chain management
Definition
  1. The product flow: traces the product itself from raw resources to finished product and final delivery to the customer.
  2. the information flow: traces all info about a product as it moves through the process, (order informaiton and delivery status)
  3. financial flow: traces payment schedules, credit terms, and any other additional financial arrangements that may be necessary, such as title and ownership arrangements. 
Term
Distribution channel
Definition
is a set of marketing intermediaries who buy, sell, or transfer title (ownership) of products as they are passed from producer to consumer or business user.
Term

Marketing intermediary

(middleman)

Definition

a business or person that moves goods and services between producers and consumers or b/w business users.

** they reduce the time and costs of providing products to customers

Term

types of intermediaries

(3)

Definition
  1. wholesalers
  2. agents / brokers
  3. retailers
Term
wholesalers
Definition

intermediaries that buy and resell products to other wholesalers, retailers, and industrial users. Primarly sell B2B products. 

(EX: local grocery store purchases tide laundry detergent from wholesaler who bought from p&g, manufactuer

EX: wholesale distributors = costco or sams club)

** primarily sell B2B ** 

Term
agents and brokers
Definition
intermediaries that facilitate negotiations between buyers and sellers of goods and services but never take title (ownership) of products traded
Term
Retailers
Definition
intermediaries that buy products for resale to .  Only sell consumer products.
Term

merchant wholesalers

Definition

technical term for wholesaler

is the independently owned businesses that take ownership of the products they handle. 

Term

cash-and-carry wholesalers

(limited-service wholesalers)

Definition
carry a limited line of fast-moving goods and sell to ssmall retailers for cash.
Term

truck wholesalers

(limited-service wholesalers)

Definition
sell and deliver directly from their trucks.
Term

drop shippers

(limited-service wholesalers)

Definition

don't carry inventory or handle products.  They select a manufacturer who ships the merchandise directly to the customer. 

(usually lumber and coal industries)

Term

Rack jobbers

  (limited-service wholesalers) 

Definition
serve grocery stores and rug retailers, mostly in nonfod items.  They send delivery trucks to stores, where the delivery people set up racks or displays within the stores.
Term
3 common types of agents
Definition
  1. manufacturers' agent: represent two or more manufacturers of complementary lines. 
  2. selling agents: have contractual authority to sell a manufacturer's entire product line.  (common in machinery and equipment businesses)
  3. purchasing agents: have long-term relationships with buyers and make purchases for them.  
Term
two main types of retailers
Definition
  1. in-store retailers
  2. nonstore retailers
Term
corporate chain stores
Definition
2 or more retail outlets owned by a single corporation
Term
nonstore retailing
Definition
a form of retailing in which consumer contact occurs outside the confines of a traditional brick-and-mortar retail store.  (*internet, vending machines, kiosks, carts)
Term

telemarketing

(nonstore retailing)

Definition
selling products over the phone.
Term

direct selling

(nonstore retailing)

Definition
selling goods and services door-to-door at people's homes and offices or at temporary or mobile locations.  (aka: multilevel marketing)
Term

direct marketing

(nonstore retailing)

Definition
refers to any aspect of retailing a good or a service that atempts to bypass intermediaries.
Term
electronic retailing
Definition
the selling of consumer goods and services over the internet.
Term
intensive distribution strategy
Definition

appropiate for companies selling convenience goods, such as newpapers, soft drinks, gum, etc...

** convenient for purchase **

Term
selective distribution strategy
Definition
uses only a portion of the many possible retail outlets for selling products.
Term
exclusive distribution strategy
Definition

using only one outlet in a geographic area. 

(high quality sports cars, jewlery, or high fashion clothing)

Term

logistics

& inbound logistics

Definition
  • refers to managing the flow of materials, info, and processes that are involved in getting a product from its initial raw stages to the point of consumption. 

 

  • any other goods and services from suppliers to the producer
Term
physical distribution
Definition
when and where they want them (outbound logistics)
Term
Routing
Definition
the way in which goods are transported (via water, rail, truck or air)
Term

warehousing

& 2 types

Definition

storing products at convenient locations ready for customers when they are needed

  1. storage warehouses
  2. distribution warehouses
Term
advantages and disadvatages of advertising media
Definition
(on picture)
Term
promotion
Definition
involves all the techniques marketers use to inform targeted customers of the benefits of a product and persuade them to purchse it.
Term
4 basic promotional tools used to promote goods or services:
Definition
  1. advertising 
  2. public relations 
  3. personal selling 
  4. sales promotions
Term
promotional mix
Definition
strategic combination of these promotional tools used to reach targeted customers to achieve maketing objectives.
Term

steps involved in a promotional campaign 

(6 steps) 

Definition
  1. identify the target market 
  2. determine marketing objectives - (trying to introduce new product or respond to an attack by a competitor?)
  3. design the message -(inform of benefits and in unified message)
  4. determine the budget - (find mix that has biggest bang for buck) 
  5. implement the promotional mix - (integrate and coordinate all promotional efforst) 
  6. evaluate and adjust as needed - (effectiveness of any promotional mix depends on clearly understood and meansurable onjectives.)  
Term
integrated marketing communications (IMC)
Definition
strategy to deliver a clear, consistent, and unified message about a company and its products to customers at all contact points.
Term
advertising
Definition
paid, impersonal mass communicationfrom an indentified sponsor to persuade or influence a targeted audience.
Term
Role that advertising plays in business & society?
Definition
  • introduction and growth stages of a product's life cycle bc it builds mass brand awareness and association 
  • builds brand loyalty and equity 
  • lead to lower prices for consumers 
Term

Types of advertising 

(10 types) 

 

Definition
  1. product advertising 
  2. corporate (or institutional) advertising 
  3. comparative advertising 
  4. retail (local) advertising 
  5. B2B advertising
  6. nonprofit advertising
  7. public service advertising 
  8. advocacy advertising 
  9. interactive advertising
  10. internet 
Term
product advertising
Definition

promots a specific product's uses, features and benefits

 

(most commonly thought of) 

Term

corporate advertising 

 

Definition

focuses on creating a positive image toward an organization or industry as oppoed to specific product.  

(EX: "Beef, It's what's for dinner.) 

Term
Retail advertising
Definition
directed to other businesses rather than to consumers.
Term
nonprofit advertising
Definition

focuses on promoting not-for-profit organizations

(EX: red cross, nature conservancy) 

Term
public service advertising
Definition
communicates messages on behalf of a good cause, such as the prevention of wildfires.
Term
advocacy advertising
Definition
promotes and organization's positions on a public issue such as global warming or immigration
Term
interactive advertising
Definition
uses interactive media (video catalogue on the internet or kiosks at shopping malls
Term
internet advertising
Definition
uses pop-up banness and ads to direct people to organization's websites
Term
direct mail advertising
Definition

(largest form) 

** junk mail **

Term
advantages and disadvantages of advertising media
Definition
(chart on pg 213)
Term
benefit of advertising online?
Definition
businesses can attempt to interact with their customers based on their needs and wants (customized product offerings)
Term
product placement
Definition

displaying products iin television shows, movies and video games where they will be seen by potential customers.

(EX: coca-cola galsses in front of the judges on American Idol) 

Term
infomercials (paid programming)
Definition
run longer than traditional commercials and many run as long as regular television programs often in the form of talk show with llittle direct reference to the fact that they are actually ads.
Term
public relations
Definition
the management function that establishes and maintains mutualy benefitial relationships between an organization and its stake holders, including consumers, sotckholders, employees, suppliers, and government.
Term

public relation tools: 

(3 types) 

 

Definition
  1. controlled messages 
  2. semicontrolled messages 
  3. uncontrolled messages 
Term
controlled messages
Definition
include corporate (or institutional) advertising, advocacy advertising, and public service advertising.  a company may also disseminate annual reporrts, brochures to send a controlled message to targeted audiences.
Term
semicontrolled messages
Definition
placed on websites in chat room and on blogs.  What people say about a company is not strictly regulated.
Term
uncontrolled messages
Definition
generally take the form of publicity
Term
publicity
Definition
information about an individual, an organization or a product transmitted through mass media at no charge
Term
2 advantages of publicity
Definition
  1.  it is free 
  2. it is more believable because it is often presented as a news story 
Term
disadvantages of publicity
Definition
it is not controlled by the seller but by the media so when and how a news release, or anything will be convered by the media is outside the control of public relations managers.
Term
damage control
Definition
a company's effort to minimize the harmful effects of a negative event.
Term
npersonal selling
Definition

the direct communication between a firm's sales force and potential buyers to make a sale and build good customer relationships.  

(EX: laboratory supplies company may deploy a representativeto a reaserch facility to demonstrate new products.) 

Term
Order getters
Definition

a salesperson who increases a company's sales by selling to new customers and increasing sale to existing customers.  

(aka creative selling) 

(used in real estate, insurance, appliace, automoible companies) 

Term
order takers
Definition

a salesperson who handles repeat sales and builds positive customer relationships. 

** one major job is to ensure buyers have sufficient quanitits of products when and where they are needed ** 

 

(especially in B2B sales that require standardized products that don't require technical sales expertise) 

Term
support personnel
Definition
salespeople who obtain new customers buy also focus on assisting current customers with technical matters.
Term
six steps for personal selling
Definition
  1. prospecting
  2. approaching the prospect 
  3. presenting 
  4. overcoming objections 
  5. closing the sale 
  6. following up
Term
propecting
Definition

identify qualified (ability and authority to purchase) potential customers 

 

(EX: cold calling) 

Term

approaching the prospect in the best way.

(2 ways) 

Definition
  1. preapproach - salespeople learn as much as possible about their potential customers to determine their likely needs and think about how you can satisfy their needs
  2. actual approach - the idea is to meet, great, and put the prospect at ease.  (build relationships) 
Term
presenting the product
Definition
tell your product's story
Term
overcoming objections
Definition
anticipate them and counter them.
Term
sales promotions
Definition
short-term activities that target consumers and other businesses for the purpose of generating interest in a product
Term
trade (B2B) sales promotions
Definition
any incentives to push a product through the distribution sysytem to final customers.
Term
consumer sales promotions
Definition

incentives designed to increase final consumer demand for a product 

** goal is to generate interest and excitement around a product ** 

Term

coupons 

(sales promotional tools) 

Definition
discount certificates that reduce the price of a product and are redeemale at the time of purchase
Term

rebates 

(sales promotional tools) 

Definition

provice a reduced price if the rebate form is mailed in along with a proof of purchase

(inexpensive for the businesses) 

Term

frequent-user incentives 

(sales promotional tools) 

Definition
offer frequent buyer cards for a free meal or iteam after a certain amount of purchases.
Term

point-of-purchase (POP) displays 

(sales promotional tools) 

Definition

are strategically located to draw attention and encourage impulse purchases.  

(EX: items placed on racks close to check out) 

Term

free samples 

(sales promotional tools) 

Definition
effective way to introduce a new product
Term

contests and sweepstakes 

(sales promotional tools) 

Definition
use this to increase the sales of their products.
Term

advertising specialties 

(sales promotional tools) 

Definition
frequently creat and give away every day items such as bottle of can opens with logos printed on them.
Term
The advantages and disadvantages of promotional tools
Definition
(on picture)
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