Marketing Test 3 Study Guide Chapters 12 13 14 16 17 Things highlighted in yellow will be on the test Chapter 12 Distribution Channels Relevant cases from the textbook 22 Supply Chain partners The supply chain consists of upstream and downstream o Upstream partners are firms that supply what is needed to create a product or service o Downstream partners connect the firm with its customers A better approach is to think of the supply chain as a value delivery network where all parties partner with each other to improve the performance of the entire system Distribution Channels A set of independent organizations involved in the process of making a product or service available to the end user Distribution channels in product marketing o Used to move tangible goods from producer to consumer Distribution channels in hospitality marketing o Used to move the consumer to the product Channel Level DC s described by the number of channel levels o Channel level Any entity that helps bring the product closer to the final buyer Examples of customer marketing channels o Direct Manufacturer consumer o Indirect Manufacturer intermediary consumer Manufacturer retailer consumer Manufacturer wholesaler retailer consumer Manufacturer jobber wholesaler retailer consumer Major Hospitality Distribution Channels Direct Booking GDSs Tour Wholesalers Travel Agents OTAs Marketing Intermediaries Travel Agents Book packages on behalf of the end user o Individual declining o Corporate remains strong o Profit from consumers and hotel commissions Tour Wholesalers Assemble travel packages usually targeting the leisure market o Travel agents sell these packages o Profit small margins on sold packages Specialist intermediaries o Tour brokers sell motor coach tours o Motivational houses provide incentive travel offers to firms who want to reward employee distributor performance o Junket reps Serve casinos as intermediaries to bring in premium players Hotel Representatives Sell hotel rooms services for hotels in a given area Tourist Agencies Can be national state or local o DMOs and CVBs Consortia A group of hospitality organizations allied together for marketing purposes Concierges organizations o Often overlooked but can be hugely valuable to small Channel Behavior o Channel members are dependent on each other to accomplish goals o VMS Producers retailers and wholesalers acting as a unified o Administered VMS size and power of channel members o Corporate VMS common ownership o Contractual VMS contracts o The ideal Channels work together o The reality Channel conflict o Horizontal conflict o Vertical conflict Vertical Marketing Systems system o Three types of VMSs o Franchising o Alliances Alliances strengths o Noncompetitive o Mutual strengths o Examples of alliances o Restaurants and hotels o Restaurants and gas stations o Hotels and motor coaches o Restaurants and motor coaches Key Terms o Designed to allow two organizations to benefit from each other s Administered VMS A vertical marketing system that coordinates successive stages of production and distribution not through common ownership or contractual ties but through the size and power of one of the parties Agent A wholesaler who represents buyers or sellers on a more permanent basis performs only a few functions and does not take title to goods Alliances Alliances are developed to allow two organizations to benefit from each other s strengths Broker A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiations Channel conflict Disagreement among marketing channel members on goals and roles who should do what and for what rewards Channel level A level of middleman that performs some work in bringing the product and its ownership closer to the final buyer Contractual VMS A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone Corporate VMS A vertical marketing system that combines successive stages of production and distribution under single ownership Channel leadership is established through common ownership Direct marketing channel A marketing channel that has no intermediary levels Franchise A contractual vertical marketing system in which a channel member called a franchiser links several stages in the production distribution process Horizontal conflict Conflict between firms at the same level Horizontal marketing systems HMS Two or more companies at one level join to follow new marketing opportunities Companies can combine their capital production capabilities or marketing resources to accomplish more than one company working alone Multichannel marketing Multichannel distribution as when a single firm sets up two or more marketing channels to reach one or more customer segments Online Travel Agent OTA A travel agency that conducts business through the Internet with no physical locations or stores Retailer Business whose sales come primarily from retailing Supply Chain Upstream and downstream partners Upstream from the company is a set of firms that supply raw materials components parts information finances and expertise needed to create a product Downstream marketing channel partners such as wholesalers and retailers form a vital connection between the firm and its customers Vertical conflict Conflict between different levels of the same channel Vertical marketing system VMS A distribution channel structure in which producers wholesalers and retailers act as a unified system Either one channel member owns the others or has contracts with them or has so much power that they all cooperate Wholesaler Firms engaged primarily in wholesaling activity Chapter 13 Promoting Products Communication and Promotion Policy and Advertising The Promotion Mix The specific blend of o Advertising o Sales promotion o Personal selling o Public relations o Direct marketing that a company uses to communicate customer value and build relationships Integrated Marketing Communications Know the definition All elements of promotion mix must be consistent clear and concise The changing face of communication 1 Changing consumers 2 Changing marketing strategies 3 Technology 4 IMC Characteristics of integrated marketing communications o Consistency across all contact points o Integration across all forms of communication Elements in the Communication Process