Place

making goods and services available in the right quantities and location, when customers want them

- when different target markets have different needs a number of Place variations may be required

Channel of Distribution

any series of firms or individuals who participate in the flow of products from producer to final user or consumer

Direct Marketing

direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling

- sometimes coupled with direct distribution from a producer to consumers

- primarily concerned with the Promotion area, not Place decisions

Discrepancy of Assortment

the difference between the lines atypical producer makes and the assortment final consumers or users want

- most people who buy golf balls also want shoes, gloves, clubs, and bags as well

- there is a need for wholesalers and retailers to adjust these discrepancies

Regrouping Activities

adjust the quantities or assortments of products handled at each level in a channel of distribution

Four Activities include:accumulating, bulk-breaking, sorting, and assorting

Accumulating

involves collecting products from many small producers

- by taking small crops of coffee and accumulating them into larger quantities allows for the lowest transporting rate and makes it more convenient for distant food processing companies to buy and handle it

Bulk-Breaking

divides larger quantities into smaller quantities as products get closer to the final market

- may involve several levels in the channel

- wholesalers may sell smaller quantities to other wholesalers or directly to retailers

- retailers continue breaking bulk as they sell individual items to their customers

Sorting

separating products into grades and qualities desired by different target markets

Assorting

putting together a variety of products to give a target market what it wants

- usually done by those closest to the final consumer or user

- retailers or wholesalers who try to supply a wide assortment of products for the convenience of their customers

- if a retailer sells tractors and mowers to golf courses they might also carry grass seed and fertilizer

Traditional Channel Systems

the various channel members make little or no effort to cooperate with each other

- each member only does what it considers to be in its own best interest

- it doesnt' worry about other members of the channel

Channel Captain

a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts

- most traditional channels don't have a recognized captain

Vertical Marketing Systerms

channel systems in which the whole channel focuses on the same target market at the end of the channel

- these systems make sense, and are growing, because if the final customer doesn't buy the product, the whole channel suffers

Corporate Channel Systems

corporate ownership all along the channel - we might say the firm is going "direct."

- but actually the firm may be handling manufacturing, wholesaling, and retailing

- so it's more accurate to think of the firm as a vertical marketing system

- may develop by vertical integration - acquiring firms at different levels of channel activity (most of the quaint local pubs in England are now actually owned and operated by the large beer breweries)

Administered Channel Systems

the channel members informally agree to cooperate with each other

- they also agree to routinize ordering, share inventory and sales information over computer networks, standardize accounting, and coordinate promotion efforts

Contractual Channel Systems

the channel members agree by contract to cooperate with each other

- still retain some of the flexibility of a traditional channel system

Ideal Market Exposure

makes a product available widely enough to satisfy target customers' needs but not exceed them

- too much exposure only increases the total cost of marketing

Intensive Distribution

selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product

Selective Distribution

selling through only those intermediaries who will give the product special attention

Exclusive Distribution

selling through only one intermediary in a particular geographic area

- as we move from intensive to exclusive distribution, we give up exposure in return for some other advantage - including, but not limited to, lower cost

Multichannel Distribution

occurs when a producer uses several competing channels to reach the same target market - perhaps using several intermediaries in addition to selling directly

- becoming more common; big retail chains want large quantities and low prices

Reverse Channels

channels used to retrieve products that customers no longer want

- the need for reverse channels may arise in a variety of different situations

- a firm that makes an error in completing an order may have to take returns

- if a product breaks or is not satisfactory they want to either repair or return it

Exporting

selling some of what the firm produces to foreign markets

- some do this to take advantage of excess capacity or even to get rid of surplus inventory

- some firms change very little if anything about the product and this can lead to the product not being very satisfactory in foreign markets

Licensing

selling the right to use some process, trademark, patent, or other right for a fee or royalty

- the licensee in the foreign market takes most of the risk because it must make some initial investment to get started

Management Contracting

the seller provides only management and marketing skills

- others own the produciton and distribuiton facilities

- some mines and oil refineries are operated this way

- Hilton operates hotels all over the world for local owners using this method

Joint Ventrue

a domestic firm enters into a partnership with a foreign firm

- as with any partnership, there can be honest disagreements over objectives

- ex. how much profit is desired and how fast should it be paid out - as well as operating policies

Direct Investment

a parent firm has a division (or owns a separate subsidiary firm) in a foreign market

- giving the parent firm complete control of marketing strategy planning

- a big commitment and usually entails greater risks