CLEP Principles of Marketing Study Notes

Consumerism movement which seeks to protect and

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Consumerism - movement which seeks to protect and inform consumers about products, and has resulted in safer products, and honest packaging and advertising. Channel Control ( aka: Channel Power) - ability to influence another distribution channel member's actions. May come through the market power the firm wields, or it could be established by the channel's decision making structure. For example, in a Corporate channel, the company which owns all the levels of the channel has the channel power. Channel Conflict A push policy of product promotion involves the producer promoting the product only to the next institution down the marketing channel Each member of the distribution channel promotes the product to the next member down the channel. For example, the producer promotes the product to the wholesaler, the wholesaler promotes to the retailer, and the retailer to the customer. A Pull policy of product promotion is where the producer promotes directly to consumers with the intention of developing a strong consumer demand for the products. Intended to "pull" the goods down through the channel by creating demand at the consumer level. The consumers want to get the products at retail stores, so retail stores go to the wholesalers, who in turn go to the producers to buy the product. This is in contrast to the producer "pushing" the product down the channel. Total-cost approach to physical distribution - looking at the distribution system as a whole--taking into account the costs of transportation, materials handling, order processing, and inventory management. Places the emphasis on minimizing the total cost of the entire distribution system, as opposed to trying to lower the costs of the individual functions. This is more effective because decreasing costs in one area of distribution often raises them in another. Distribution-Center Concept is an alternative to either keeping one centrally located stock of inventory for all markets, or creating numerous dispersed inventory sites. Creating distribution centers which are large, centralized warehouses designed to ship products to customers in regional markets quickly. The problem with having only one centralized inventory for the entire market is potentially high transportation costs and delivery delays, while having too many inventory sites results in complex inventory control and increased handling costs. PART V Wholesaling - consists of all exchanges among organizations and individuals in a distribution channel except for those transactions with ultimate consumers. Consists of all transactions in which the buyer intends to use the product for resale , for making other products, or for general business operations. It does not include transactions where the product is being sold to ultimate consumers. Whether or not wholesalers are involved,
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Consumerism movement which seeks to protect and inform...

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