Place
making goods and services available in the right quantities and locations, when customers want them.
Channel of Distribution
any series of firms or individuals who participate in the flow of products from producer to final user or consumer.
Product classes
help us decide how much market exposure we'll need in each geographic area. I.e. product classes suggest place objectives.
Place system
Not automatic. Marketing managers may need to develop several strategies, each with its own Place arrangements.
Place Decision
have long-run effects. They are usually harder to change than Product, Promotion, and Price decisions.
Internet
Makes direct distribution easier
Direct contact with customers
a firm is more aware of changes in customer attitudes.
Business products
usually sold direct-to-customer.
Number of firms
still relies on direct marketing-direct communication between a seller and an individual customer using a promotion method other than face to face personal selling.
Intermediaries
may further reduce a producer's need for working capital by buying the producer's output and carrying it in inventory until it's sold. Also necessary because if customers are spread over a large area, it will probably be necessary to have widespread distr
Specialists
provide information to bring buyers and sellers together.
Discrepancy of quantity
the difference between the quantities of products it is economical for a producer to make and the quantity final users or consumers normally want. Adjusting for this discrepancy usually requires intermediaries- wholesalers and retailers.
Discrepancy of assortment
the difference between the lines a typical producer makes and the assortment final consumers or users want.
Regrouping activities
adjust the quantities or assortments of products handled at each level in a channel of distribution:
accumulating, bulk-breaking, sorting, and assorting.
Accumulating
involves collecting products from many small producers.
Bulk Breaking
involves dividing larger quantities into smaller quantities as products get closer to the final market.
Sorting-mans
separating products into grades and qualities desired by different target markets.
Assorting
means putting together a variety of products to give a target market what it wants.
Vertical marketing systems
are channel systems in which the whole channel focuses on the same target market at the end of the channel. Developed by internal expansion or buying other firms, or both.
Vertical integration
acquiring firms at different levels of channel activity.
Administered channel systems
the channel members informally agree to cooperate with each other.
Contractual channel systems
the channel members agree by contract to cooperate with each other.
Vertical marketing systems
are becoming the major competitive units in the US distribution system-and they are growing rapidly in other parts of the world.
Ideal market exposure
makes a product available widely enough to satisfy target customer's needs but not exceed them.
Intensive distribution
is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. commonly needed for convenience products and business supplies. Sell it where they buy it.
Selective distribution
is selling through only those intermediaries who will give the product special attention. Suitable for all categories of products. Sell it where it sells best.
Exclusive distribution
is selling through only one intermediary in a particular geographic area.
Horizontal arrangements
illegal-Courts consider such arrangements obvious collusion that reduces competition and hurts consumers.
Vertical arrangements
may or may not be illegal. Not clear cut. Thus, firms should be cautious about entering into any exclusive distribution arrangement.
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.
Reverse channels
channels used to retrieve products that customers no longer want. New laws require reverse channels in some industries. Are sustainable and profitable.
Exporting
selling some of what the firm produces to foreign markets.
Licensing
means selling the right to use some process, trademark, patent, or other right for a fee or royalty.
Management contracting
means that the seller provides only management and marketing skills-others own the production and distribution facilities.
Joint venture
domestic firm enters into a partnership with a foreign firm.
Direct investment
means that a parent firm has a division in a foreign market. This gives the parent firm complete control of marketing strategy planning. Is a big commitment and usually entails greater risks.
Logistics
the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix-both within individual firms and along a channel of distribution.
Physical distribution
Another common name for logistics. Involve trade-offs between costs, the customer service level, and sales.
Customer service level
how rapidly and dependably a firm can deliver what they, the customers want.
Information technology
can sometimes improve service levels and cut costs at the same time.
Total cost approach
involves evaluating each possible PD system and identifying all of the costs of each alternative. This approach uses the tools of cost accounting and economics.
JIT (Just in time delivery systems)-
A key advantage is that it reduces PD costs especially handling and storing costs. A JIT system usually requires that a supplier respond to a very short order lead times and the customer's production schedule
Supply chain
the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. Ideally all of the firms in the supply chain should w
*electronic data interchange (EDI)
an approach that puts information in a standardized format easily shared between different computer systems. This replaces many firms, purchase orders, shipping reports, and other paper documents.
Transporting
the marketing function of moving goods.
Railroads
account for less than 10 percent of transport revenues. Most efficient at handling full carloads of goods
Trucks
Better at moving small quantities of goods for shorter distances. 75 percent of US consumer products travel at least part of the way from producer to consumer. However, are more expensive.
Water transportation
the slowest shipping mode, but it is usually the lowest cost way of shipping heavy freight. Only practical approach for international shipments.
Inland waterways
(such as the Mississippi River and Great Lakes) are also important, especially for bulky, nonperishable products such as iron, ore, grain, and gravel.
Pipelines
to move oil and natural gas
Airplane
The most expensive cargo transporting mode but it is fast.
Containerization
Grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination.
Piggyback service
means loading truck trailers- or flatbed trailers carrying containers-on rail cars to provide both speed and flexibility
Marketing managers
must be sensitive to the environmental effects of transportation decision.
Storing
marketing function of holding goods so they're available when they are needed. Can increase the value of goods, but always involves costs too
Inventory
the amount of goods being stored.
Private warehouses
storing facilities owned or leased by companies for their own use. Firms use private warehouses when a large volume of goods must be stored regularly. Yet can be expensive.
Public warehouses
independent storing facilities. They can provide all the services that a company's own warehouse can provide. Are also useful for manufacturers that must maintain stocks in many locations, including foreign countries.
Distribution center
a special king of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. Widely used by firms at all channels. Don't store it distribute it.