Exam 15: Distributing Products

In multilevel marketing, salespeople have little incentive to recruit new salespeople, because the new salespeople may compete against them and reduce their income.

Discount stores compete in the retail market mainly on the basis of price.

A channel of distribution consists of the marketing intermediaries who join together to transport and store goods in their path from producers to consumers.

Sportstors, Inc. operates a chain of very large stores that offer an incredible selection of sporting goods at very competitive prices. When Sportstors opens its first store in a geographic area, smaller sporting goods stores almost always experience a noticeable drop in sales. Sportstors stores can be classified as:

Suppliers to large retailers like Target and Wal Mart may soon be required to use RFID tags when shipping products to these companies.

A(n) sells general merchandise directly from the manufacturer at a discount; items may be discontinued or have certain product flaws.

is the term used to describe the use of outside firms to help move their goods through the supply chain.

Larry and Dale Ingram solicit orders for lumber from area wholesalers and retailers specializing in building supplies and arrange to have the orders shipped directly from nearby logging companies. Larry and Dale operate as drop shippers.

Manufacturers are usually able to perform marketing functions such as transporting, advertising, and storing, faster and more cheaply than marketing intermediaries.

In a corporate distribution system one firm owns all of the organizations in the distribution.

Delivery, installation, and follow-up services are the most common ways that marketing intermediaries provide information utility.

Corporate distribution systems consist of several independently owned intermediaries, all of them organized as multinational corporations.

Although drop shippers own merchandise they have shipped to buyers, they do not actually handle, stock, or deliver this merchandise themselves.

The two basic types of merchant wholesalers are:

The best way to reduce the cost of goods is to eliminate marketing intermediaries from the distribution channel.

Marketing intermediaries have survived because they have been able to perform marketing functions more efficiently and effectively than a manufacturer or consumer could perform these functions.

Marketers claim that intermediaries add value to the channel of distribution that outweighs the cost.

One way marketing intermediaries improve marketing efficiency is by reducing the number of exchange relationships necessary to move goods through the channel of distribution.

Although there have been some unethical firms involved in multilevel marketing, this form of retailing remains quite successful.

Mall owners like to have located along the walkways of their malls, because they create a marketplace type of atmosphere.