Term
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Definition
- Act on behalf of a Producer in selling/marketing their products
- Ensure producer meets product delivery requirements
- Ensure wholesalers/retailers have adequate inventory
- Recommend, execute retail promotions
- Provide proof of performance
- Handle product quality issues in the field
- Arrange discussions between producers, wholesalers, and retailers
- Prepare sales volume reports for producer
- Relay local market knowledge to producers
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Term
What size company is a broker best fit with? |
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Definition
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Term
Describe the lines that food brokers represent. |
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Definition
5% branded, 3% private label
Limited number of established lines
Won't pioneer new lines until guaranteed retailer will list them |
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Term
What industries use brokers? |
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Definition
- Residential real estate
- Commercial real estate
- Financial services
- Restaurant
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Term
Define channel management. |
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Definition
the administration of existing channels designed to secure to cooperation of channel members in achieving the firm's distribution objectives |
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Term
What is the purpose of a cooperative program? |
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Definition
Cooperative programs are a way to support channel members and to help manage the channel. |
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Term
Define distribution programming. |
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Definition
comprehensive set of policies for the promotion of a product throughout the channel |
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Term
Define cooperative advertising. |
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Definition
A program where a producer pays for a portion of a retailer's advertising to promote the producer's product (and drive traffic to the retailer) |
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Term
How are cooperative advertising costs typically split? |
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Definition
50/50 for the ad cost between the manufacturer and retailer |
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Term
What is the total coop ad spend typically based upon? |
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Definition
retailer's coop % * number of purchases |
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Term
What are the benefits, to the producer, of coop advertising? |
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Definition
- Lowers overall ad costs
- Enables greater ad frequency and presence
- Can invest in addition ad vehicles
- Can expand brand awareness in more geographic areas
- Leverages retailer's local media knowledge/connections
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Term
What are the benefits, to the retailer, of coop advertising? |
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Definition
- Lowers overall advertising costs
- Enables greater ad frequency
- Can invest money in additional ad vehicles
- Enhances image by linking retailer with a nationally known brand
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Term
What is a display allowance? |
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Definition
A trade promotional tool, funded by the producer, that induces the retailer to display a given item typically when a price promotion is being run. |
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Term
How are display allowances calculated? |
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Definition
Display allowances are usually a fixed amount per case. |
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Term
What is needed before a producer will pay a retailer for a display allowance? |
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Definition
Proof of performance is needed. (i.e. pictures of the display) |
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Term
What are examples of direct-flow information media for promoting to the channel? |
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Definition
- Salespeople
- Trade shows, factories, dealers
- Company magazines
- Product specifications
- Catalogs, manuals
- Merchandise displays in showrooms
- Electronic links
- Email
- Internet Advertisements
- Social Networking
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Term
What are examples of Indirect-flow information media, for promoting to the channel? |
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Definition
- Trade journals
- Trade association publications
- Personal contact with third parties at social and trade meetings
- Governmental publications and individuals
- Marketing research agencies
- Libraries of businesses
- Internet
- Private investigating agencies
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Term
Define Value Added Resellers (VARs) |
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Definition
Companies that add features or services to an existing product, then resell it as an integrated product solution |
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Term
Define a consignment shop. |
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Definition
a store that sells secondhand items on behalf of the original owner, who receives a percentage of the selling price after the item is sold. |
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Term
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Definition
the logistics practice of leading materials from an (intermodal) incoming truck or railcar directly onto outbound trucks, trailers, or railcars, with little or no storage in between. This is done to change the type of shipping method, to sort material intended for different destinations, or to combine material from different origins into transport vehicles with the same destinations. |
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Term
Define Convenience/C-Stores. |
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Definition
a smaller-format retail channel that stocks a range of everyday items. These stores charge significantly higher prices vs. grocery stores as they order in smaller quantities of inventory at higher per-unit prices from wholesalers. Benefits of this channel are longer open more hours, more locations, and having shorter cashier lines. |
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Term
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Definition
a retail store owned and managed by consumer-customers who supply the capital and share in the profits via patronage dividends. |
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Term
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Definition
a gathering for companies in a specific industry to showcase and demonstrate their new products and services. Generally these are not open to the public and can only be attended by company representatives and members of the press. |
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Term
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Definition
a temperature-controlled supply chain that is an uninterrupted series of storage and distribution activities which maintain a given temperature range. It is used to help extend and ensure the shelf life of products such as fresh agricultural producte, seafood, frozen food, photographic film, chemicals, and pharmaceutical drugs. |
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Term
Define multi-level marketing. |
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Definition
a marketing channel stratefy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. |
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Term
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Definition
a store that sells food and supplies to the personnel or workers at a military post, mining camp, lumber camp or the like. |
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Term
Define competitive lines conflict. Is it vertical or horizontal? |
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Definition
A producer becomes irate because a distributor takes on another line that competes directly with the producer's.
Vertical: produce is upset with distributor |
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Term
Define overlapping territories conflict. Vertical or horizontal? |
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Definition
There are two distributors with adjoining territories. One distributor accuses another of "poaching its customers"
Horizontal |
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Term
What are the 5 types of channel conflict? |
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Definition
- Competitive Line Conflict
- Overlapping Territories Conflict
- Complacency conflict
- New Channel Opening Conflict
- Gray Market Conflict
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Term
Define complacency conflict. Vertical or horizontal? |
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Definition
A distributor has reached a point where he has little interest in opening new accounts or developing new product lines. This runs counter to the producer's wishes to grow sales in the channel.
Vertical |
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Term
Define new channel opening conflict. Vertical or horizontal? |
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Definition
A major producer, with over 3000 independent dealers distributing its products, pursues new distribution at a major home improvement chain.
Horizontal and Vertical.
Mostly vertical because independent dealers will complain to the producer.
Horizontal between independent dealers and home improvement chain are now competing. |
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Term
Define gray market conflict. Vertical or horizontal? |
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Definition
Due to differential pricing between distributors, a producer's goods are over-ordered by one distributor and then resold throughout the channel at significantly lower prices.
Vertical and horizontal. |
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Term
How do you find the gross margin? |
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Definition
Gross profit/revenue=gross margin |
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Term
How do you find net margin? |
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Definition
Net income/revenue=net margin |
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Term
Is a retailers net margin or gross margin typically higher? |
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Definition
Gross margin.
Retailers typically show little net margin. |
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Term
Why do producers use sell sheets? |
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Definition
- Convenient leave behind
- Give sales reps opportunity to make calls
- Standardizes sales copy
- Hardcopy + PDF downloads
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Term
What should a sell sheet never include? |
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Definition
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Term
What products are sell sheets often used with? |
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Definition
Often used with new inventions |
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Term
What should be on your sell sheet? |
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Definition
- Product name
- Logo, tagline
- Contact info
- Beauty shots
- Package shots
- Product features
- Product benefits
- Case configurations & sizing is helpful
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Term
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Definition
a cooperative trade program where retailers receive some amount of free product based on the amount ordered |
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Term
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Definition
Designed to roll out product
Buyer needs info
Seller needs to communicate info |
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Term
What is the average number of SKUs in a supermarket? |
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Definition
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Term
What results from having a large number of SKUs? |
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Definition
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Term
What is promotion proliferation? |
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Definition
When sales become regular, one week Pepsi the next Coke
Does not add any profit to the company |
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Term
Define cannibalization at retail. |
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Definition
Company has too many products, takes away products from other products. |
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Term
Define category management. |
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Definition
a retailer-supplier collaboration that determines the point of optimization in price, promotion, shelving, and assortment to maximize profitability and shopper satisfaction |
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Term
What leads to successful category management? |
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Definition
draws on the latest industry trends, leverages available data, and utilizes best-in-class technology. |
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Term
What is shopper marketing focused on? |
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Definition
understanding emotions or motivations of consumers |
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Term
What disciplines does category management cover? |
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Definition
- Product mix
- Pricing
- Promotions
- New Product Development
- Merchandising/shelving
- Consumer behavior & usage patterns
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Term
What are the 8 steps in the category management process? |
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Definition
- Category definition
- Category role
- Category assignment
- Category performance measures
- Category strategies
- Category tactics
- Plan implementation
- Category review
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Term
What does defining a category entail? |
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Definition
define what products make up the category and what is their segmentation from the consumer's perspective |
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Term
What is involved in the category role step of category management? |
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Definition
develop and assign a role for the category based on a cross category comparison considering consumer, market, supplier and retailer information |
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Term
What is involved in category assessment? |
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Definition
analysis of the category sub-categories, segments, etc. by reviewing consumer, market, supplier, and retailer information. |
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Term
What is involved in category performance measures? |
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Definition
establish the category performance measures and targets |
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Term
What is involved in defining category strategies? |
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Definition
develop the marketing and product supply strategies that meets the category role and performance objectives |
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Term
What is a category tactic? |
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Definition
determine the optimal assortment, pricing, shelf presentation & promotion tactics that ensure the category strategies are implemented |
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Term
What is involved in category management plan implementation? |
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Definition
to implement the category business plan through a specific schedule and list of responsibilities |
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Term
How much did sales increase due to category management for retailers and manufacturers? |
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Definition
19% for supermarket retailers
11% for manufacturers |
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Term
What skills are needed to be a category manager? |
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Definition
Analytical skills, research, data analysis, and problem solving
Good communication and presentation skills |
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Term
Define a category captain. |
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Definition
a product manufacturer who through size, market position or abilitiy to deliver proven insights, is selected by the retailer to play a leading role in its category management activity |
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Term
How is a category captain selected? |
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Definition
Selected by the retailer.
Typically the leading performer. |
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Term
What does a category captain do? |
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Definition
- Objectively grow overall category
- Work with retailers to create planograms and shelf-sets
- Build relationships with the retailer & suppliers to foster trust
- Go-to manufacturer for industry questions & recommendations
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Term
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Definition
intermediaries that sell new or used products, at the retail level, based on a dealership contract with a producer. |
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Term
Define multi-line dealers |
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Definition
carry multiple, potentially competing lines |
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Term
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Definition
also known as exclusive dealers that carry just one producer's line |
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Term
What is a servicing dealer? |
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Definition
a dealer that provides service functions in addition to products |
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Term
What benefits does a dealer for a branded line receive? |
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Definition
National marketing programs
National advertising support
Training
Incentive programs |
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Term
What are the upfront costs that dealers have to pay? |
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Definition
There are typically no upfront fees in order to sell the good, but may be contractually required to buy some minimum amount of goods |
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Term
What are dealer advantages and benefits to a consumer? |
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Definition
- provides in depth product knowledge--> up-to date, accurate information about the product
- handle warranty claims--> local source for product fixes under warranty
- stock replacement parts--> you can quickly fix is yourself
- Occassionally offer financing
- Offer accessories--> customize items to personal needs
- Build relationships with customers
- Offer convenient additional services (i.e. delivery)
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Term
What are the benefits of dealers to a producer? |
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Definition
- Knowledge of the local market
- After-sale service functions can be handled outside the company
- Dealers can be sold larger "lot sizes"
- Dealers can join in coop advertising and merchandising programs
- Promoting, communicating, motivating the channel with fewer contact points
- Additional segments can be reached
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Term
What does the channel system look like in the introduction phase? |
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Definition
- Fight for channel acceptance
- Ensure adequate supply on channel members' shelves
- Some companies hire direct intermediaries until sales are established
- Trade discounts may be heavily employed
- Logistics outsourced as much as possible
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Term
What are the channel objectives in the introduction phase? |
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Definition
expand channel outlets
match supply to demand (otherwise out of stocks) |
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Term
What does the channel system look in the growth stage of the PLC? |
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Definition
- Sales grow so intermediaries are more willing to carry
- trade discounts may be heavily employed
- logistics grow; product mix additions strain some organizations
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Term
What are the channel objectives in the growth stage of the PLC? |
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Definition
Blunt competitive entrants
Grow multiple channel distribution |
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Term
What does the channel system look like in the maturity stage of the PLC? |
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Definition
- Sales slow
- Trade increasingly concerned with carrying inventories
- Extra emphasis on motivating channel members to mitigate competitive impact
- Investigate possible changes in channel structure to extend maturity stage & possible foster new growth stage
- Logistics optimized for high-volume operations
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Term
What are the channel objectives in the maturity stage of the PLC? |
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Definition
Increase push marketing tactics (allowances, discounts, advertising)
Alter channel mix (online, mass merchants) |
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Term
What are some examples of push marketing tactics? |
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Definition
Allowances
discounts
advertising |
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Term
What does the channel system look like in the decline stage of the PLC? |
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Definition
- Sales decline
- phase out marginal channel members
- remaining channel members order in smaller quantities
- order fulfillment, order processing or other logistics cut or outsourced
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Term
What are the channel objectives in the decline stage of the PLC? |
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Definition
Shut down marginal outlets
minimize shelf space
shift majority of outlets to online |
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Term
Where are writing instruments in high demand? |
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Definition
- Asia, Latin America, Middle East due to growing population and rise in literacy levels
- United States & Europe as gift items and fashion accessories
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Term
What type of distribution channel does Visconti have? |
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Definition
- Flagship store in Florence
- Exclusive, Specialty Distributor--> 1 bricks and mortar/country
- Online through specialty retailers and amazon
- No prices or orders from their website
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Term
What are some of the most important selection criteria when selecting channel members? |
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Definition
- knowledge of the market
- market coverage
- enthusiasm for the product
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Term
Qualities of prospective channel members? |
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Definition
- Size
- Attitude
- Management ability
- Management succession
- Sales performance
- Market coverage
- Reputation
- Product lines
- Sales strength
- Credit and financial condition
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Term
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Definition
payments by producers, made to retailers, in order to have the producer's product placed on the retailer's shelves |
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Term
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Definition
an in-store promotion where a producer visits a retail store, armed with a large container of some of its latest and best products, and present the merchandise to customers and or store personnel. Oftentimes, it allows store personnel to preview and/or purchase merchandise before it is made available to the public. |
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Term
Define forward buying (trade loading) |
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Definition
a practice where intermediaries overbuy certain products that are currently on trade promotion. The item may then be resold after the promotional period is over or may be diverted and sold to other channel intermediaries who didn't participate in the promotion. |
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Term
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Definition
an exhibition for companies in a specific industry to showcase and demonstrate their new products and services. Generally they are not open to the public and can only be attended by company representatives and members of the press. |
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Term
Define promotional allowances. |
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Definition
a group of push strategy programs that are designed to encourage retailers to 1) buy more of a producer's products 2) give the products more prominent shelf space 3) encourage displays or 4) engage in other types of profile-raising activity |
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Term
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Definition
where interest for a specific product or service is directly created within the intended target audience, who then demands the product from the channel partners, thus causing the product to be drawn through the marketing channel |
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Term
Define a SPIF (Sales performance incentive fund) |
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Definition
often used by producers, these are designed to introduce new products to the market, or increase sales within a specific time frame. The incentive may be a cash bonus or gift card--or a prize (i.e. vacation, car) |
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Term
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Definition
the volume goal that a producer specifies for its channel members to achieve during a certain period |
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Term
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Definition
a pull marketing strategy where a portion of food or other product (i.e. beauty products) is given to consumers in shopping malls, supermarkets, retail stores, or other channels. The purpose of these "freebies" is typically to acquaint consumers with a new product. |
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Term
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Definition
first coined in the music industry, this is an illegal payment made by a record company to a radio station in order to get the station to play a song as part of the normal day's broadcast. The term has since come to reger to any secret payment made to cast a product in a favorable light and there is much debate as to whether slotting fees are a form of this. |
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Term
What is a pull strategy? What is the flow of a pull strategy? |
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Definition
Manufacturer to final user who demands from channel members who demand from manufacturer.
Commonly use ads, coupons, samples to create desire. |
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Term
What is a push strategy? What is the flow of a push strategy? |
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Definition
Manufacturer to channel members to final users |
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Term
What are alternatives to price increases? |
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Definition
- Investigate supply chain cost decreases (ingredients and packaging)
- Keep MSRP same, product downsize
- Reduce advertising & promotions (trade discounts)
- Trade-up with larger quantity SKUs
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Term
What three countries have the highest market share %s of private labels? |
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Definition
1. Switzerland
2. Spain
3. UK |
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