For example, Konica-Minolta Business Systems (KMBS) has a system of sales branches that sell KMBS printers and copiers directly to companies that need them. These are time, form, place, and ownership. Chapter 12 | Flashcards Often they are located on corners, making it easy and fast for consumers to get in and out. The trucks make the rounds to customers, who inspect and select the products they want straight off the trucks. Mail-order wholesalers sell their products using catalogs instead of sales forces and then ship the products to buyers. True or False? Marketing intermediaries can be eliminated, but their activities can't; that is, you can eliminate some wholesalers and retailers, but then consumers or someone else would have to perform the intermediaries' tasks, including transporting and storing goods, finding suppliers, and establishing communication with suppliers. Each intermediary in the marketing channel A adds value in the terms of the functions it performs 5 Q In which way do intermediaries in the marketing channel enhance the value of a product for consumers? They help carriers spread the risks in their portfolios Used retailers are retailers that sell used products. Retail cooperatives such as Associated Grocers. Its chief products include whiskey, wine, malts, and vodka products. Hotels may buy advertising from Room Key to obtain more-prominent placement, but its costs remain lower than those of other distribution channels, and Room Key says that hotels pass the savings on to consumers through greater flexibility as well as loyalty program benefits. \quad\quad\text{Work in Process}&&2,000\\ Wholesaler-sponsored chains such as Ace Hardware and IGA food stores. Websites such as thewholesaler, mxwholesale, dkwholesale, etc. Producers cooperativesowned by their members, who are farmersassemble farm produce to be sold in local markets and share profits at the end of the year. They show the property for sale to the interested buyers and negotiate prices that both parties agree upon. a system in which all of the organizations in the channel of distribution are owned by one firm. 6 Q Neiman Marcus, Saks Fifth Avenue, and Nordstrom sell expensive products and offer extensive personal service to customers. These types of firms arent considered channel partners because its not their job to actively sell the products being produced. FinishedGoods2,000CostofGoodsSold2,000c. However, in recent years, giant specialty stores called category killers have emerged. The typical marketing flows, listed in the usual sequence in which they arise, are collection and distribution of marketing research information (information), development and dissemination of persuasive communications (promotion), agreement on terms for transfer of ownership or possession (negotiation), intentions to buy (ordering), acquisition and allocation of funds (financing), assumption of risks (risk taking), storage and movement of product (physical possession), buyers paying sellers (payment), and transfer of ownership (title). Like online travel agents, Room Key aspires to provide comprehensive results; but rather than charging hotels a commission on each booking, it sends consumers directly to the hotels own sites to make reservations. For three decades, airlines have been relying on computerized reservation systems to reach travel agents and key customers. For example, franchisers, because they receive a percentage of sales, typically want their franchisees to maximize sales, while the franchisees want to maximize their profits, not sales. Businesses may sell products directly to the final customer, as is the case with most industrial capital goods. a whole set of marketing intermediaries such as agents, brokers, wholesalers, and retailers that join together to transport and store goods in their path (or channel) form producers to consumers. Often located in rural areas but along interstate highways, these stores had lower overhead than similar stores in big cities due to lower rent and lower employee salaries. As new institutions emerge or products enter different life-cycle phases, distribution channels change and evolve. As mentioned earlier, these discount department stores are a real threat to category killers, especially in the form of a superstore. In order to gain such a high level of performance, manufacturers need some sort of leverage. But today, Encarta no longer exists. This can be seen in Figure 3. Normally in such a system, retailers agree to focus their purchases on one wholesaler, but cooperative retailers could also purchase a wholesale organization to ensure better service. Instead, they earn a commission by finding sellers and passing their orders along to producers, who then ship them directly to the sellers. How do companies add value to products via their marketing channels. Nonetheless, public outcry and regulatory complaints provide an important bulwark against brazen instances of intermediaries favoring their own services. Second, many producers can earn a superior return on their capital by investing profits back into their core business rather than into the distribution of their products. negotiation contacts promotion A producer will use an intermediary when it believes that the intermediary can perform the function(s) more economically and Thus they can make a modest investment yet enjoy profits disproportionate to those of suppliers, who hold inventory, produce products, and actually do the work. Many producers do not sell products or services directly to consumers and instead use marketing intermediaries to execute an assortment of necessary functions to get the product to the final user. Mgmt 1 marketing multiple choice Flashcards | Quizlet There are three forms of contractual systems: 1. Each of these flows must be performed by a marketing intermediary for any channel to deliver the goods to the final consumer. Off-price retailers are stores that sell a variety of discount merchandise that consists of seconds, overruns, and the previous seasons stock other stores have liquidated. As intermediaries deal with smaller quantities of products but of a wider variety, they can match the different needs of customers.