MARKETNG 300 1st Edition Lecture 12 Outline of Last Lecture XIX. Chapter 7 TermsXX. Chapter 7 Concepts to ApplyOutline of Current Lecture XXI. Chapter 10 TermsXXII. Chapter 10 Concepts to ApplyCurrent LectureXXI. Chapter 10 Terms• 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• Direct Marketing: direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling• Discrepancy of Quantity: the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. i.e.) produce 200,000 golf balls, but consumers only want a couple• Discrepancy of Assortment: the difference between the lines a typical producer makes and theassortment final consumers or users want• Accumulating: a regrouping activity that involves collecting products from many small producers. Especially important in less-developed countries and in other situations, like agricultural markets, where there are many small producers. i.e.) collect coffee from small farmsin mountains of Columbia. Also important with professional services: a hospital combines services of different specialists.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.• Bulk-breaking: a regrouping activity that involves dividing larger quantities into smaller quantities, as products get closer to the final market. i.e.) wholesalers sell smaller quantities to other wholesalers or directly to retailers. Breaking the bulk each time.• Sorting: a regrouping activity that is separating products into grades and qualities desired by different target markets.• Assorting: a regrouping activity that involves putting together a variety of products to give a target market what it wants. i.e.) golf store sells golf balls w/ golf clubs w/ golf clothes• Channel Captain: a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts.• Vertical Marketing Systems: channel systems in which the whole channel focuses on the same target market at the end of the channel• Corporate Channel Systems: corporations develop their own vertical marketing systems by internal expansion or by buying other firms, or both. Corporate ownership all along the channel.• Vertical Integration: acquiring firms at different levels of channel activity. advantages: stable supply source, better control of distribution and quality, greater buying power, lower executive overhead. But, hard to be good at running such different activities• Contractual Channel Systems: the channel members agree by contract to cooperate w/ each other.• Ideal Market Exposure: makes a product available widely enough to satisfy target customers' needs but not exceed them.• 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.• Multichannel Distribution: 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. Many firms have moved reluctantly to improve reverse channels - often doing so only when forced by new laws designed to help the environment• Licensing: selling the right to use some process, trademark, patent, or other right for a fee or royaltyXXII. Chapter 10 Concepts to Apply1. How do product classes affect “place”? Product classes set the framework for making Place decisions. They help us decide how much market exposure we’ll need in each geographic area.2. When does it make sense to use direct distribution? When does it make sense to use indirect distribution? Companies choose to go direct because it allows a firm to maintain control of the marketing mix and they can be more aware of changes in customer attitudes. A firm mayhave to go direct because suitable intermediaries are not available or will not cooperate.Many business products and service firms use direct channels. When a company has limited financial resources or wants to retain flexibility it may wantto avoid that investment by working with established intermediaries (indirect). An intermediary can often help producers serve customer needs better and at a lower cost. 3. Provide examples of quantity and assortment discrepancies. Describe the four activities that wholesalers and retailers can do to resolve these discrepancies. Discrepancies of Quantity: difference between the quantity of products it is economical to produce and the quantity customers want. i.e.) golf ball producer produces 300,000 golf balls, but consumer wants to buy four. Discrepancies of Assortment: difference between the lines a producer makes and the assortment customers want. (i.e.: golfers want golf balls AND golf shoes, gloves, clubs, bag, etc. and they don’t want to buy them all separately.) Regrouping Activities to resolve discrepancies •Accumulating: collecting products from many small producers •Bulk-breaking: dividing larger quantities into smaller quantities as products get closer tothe final market •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 wants4. Give an example of a horizontal and a vertical conflict. How might the channel captain resolvethem?Horizontal Conflict: both Target and Wal-Mart think that Sony will give the other a betterprice, so to alleviate, Sony offers special things to each like: if you want a red one, you must buy it at Target. If you want it to come with a free game, you must buy it at Wal-Mart. Vertical Conflict: GameStop started selling used video games and game publishers were concerned the move would steal sales from new games. 5. What determine the ideal market exposure