Exam 27: Marketing Channels and Retailing

What is a marketing channel? What type of businesses make up a marketing channel?

Redbox Movie DVD sales represent a $16 billion market, and rentals make up another $7.5 billion. Naturally, production studios would prefer consumers purchase DVDs rather than rent them. Production studios like Twentieth-Century Fox, Warner Bros., and General Electric refused to sell new releases to Redbox, a DVD vending machine company, until almost a month after new releases arrived in stores. Redbox, the ubiquitous DVD rental red kiosks found in and outside of convenience stores, grocery stores, drugstores, fast-food restaurants, and Walmart, is cutting in on production companies' profits. These studios are tangled in lawsuits with Redbox. Sony, Paramount, and Lionsgate, on the other hand, permit distribution through Redbox, and Disney allows third-party distribution to Redbox. With more than 20,000 kiosks now in operation, Redbox ranks fifth in DVD rental revenues, which is impressive considering the rental fee is only $1.00. But Blockbuster is trying to steal vending market share by allowing NCR Corporation, known for ATM machines, to license its name to place Blockbuster Express kiosks in similar types of locations. -Refer to Redbox.Redbox offers DVDs from several production studios,such as Disney,Sony,and Paramount.Consumers can rent from Redbox instead of obtaining the DVD from the various production studios if they want a children's movie from Disney and an action movie from Paramount.Thus,one kiosk provides _____ for both consumers and the production studios.

Which channel relationship is less ambiguous than an Arm's-length relationship but without the longer-term and/or capital investment required to achieve full integration?

Every October through December,Hickory Farms opens a temporary store in many malls to sell products during the Christmas season without the long-term commitment of a more expensive retail lease.This is an example of a pop-up shop.

Southwestern Company recruits and trains college students to sell educational reference books,software,and children's books door-to-door.This form of non-store retailing is called:

The capacity of a particular marketing channel member to control or influence the behavior of other channel members is known as:

_____ refers to the techniques used to get consumers to buy from their home.Those techniques include direct mail,catalogs and mail-order,telemarketing,and electronic retailing.

Diaz John Diaz immigrated to Tallahassee from Cuba in the 1980s. He set up a coffee shop called Diaz in a small upper-middle-class neighborhood. It rapidly became popular because of the wonderful coffee it brewed. Soon Diaz was selling the finest coffees from around the world, plus coffee-making necessities such as grinders and brewers. Within ten years, Diaz was operating a lucrative mail-order business in addition to his coffee shop. Upon entering the shop, the first thing the customer sees is a countertop crowded with all of the machinery needed for making a perfect cup of coffee. Marble-topped tables are set in cozy nooks with overstuffed chairs. Bookshelves on one wall hold books about coffee for patrons to read while they sip. The smell is intoxicating to a real coffee lover. Coffee drinkers can take home a pound when they leave. The store carries all types of coffee from $8 per pound Brazilian Cerrado to $300 per pound Kopi Luwak from Sumatra. -Refer to Diaz.If Diaz wanted to grow his business and granted another owner the rights to use his format and approach to doing business,he would be involved in:

A _____ is an off-price retailer that is owned and operated by a manufacturer and carries one line of merchandise--its own.

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs.The product beams an image of a keyboard on a desk,allowing the user to type on the image.The words are picked up by the user's digital device.When introduced to the market,the device will sell for less than $50.If,in choosing its channel,Canesta is most concerned about its lack of financial,managerial,and marketing resources to support the product's introduction,then its choice of channels will largely be influenced by:

Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers.This is called:

When retailers decide on location,they have two basic site options: the freestanding store and the shopping center.Briefly describe these location alternatives and discuss the advantages and disadvantages of each location alternative.

A retailing establishment that sells a wide variety of shopping and specialty goods under one roof would be classified as a department store.

The party in a franchise relationship that is an individual or business granted the right to sell another party's product is called the:

The only way that Jim Keeler in New Mexico can get a box of Carolyn Popwell's Festive Holiday Truffles from Washington is to order it through the mail.Popwell,who makes the candy by hand,uses a(n)_____ exclusively.

A _____ channel is commonly used for low-cost consumer items that are frequently purchased,such as candy,cigarettes,and magazines.

One important reason channel members are included between producers and users is to increase contact efficiency.How do channel members increase contact efficiency? Use the following two scenarios to illustrate your answer: (1)Assume that there are 2,000 business students who need to buy textbooks from eight textbook publishers.How many transactions must take place? (2)Assume the first scenario,but now one campus bookstore is acting as an intermediary.Now how many transactions must take place?

_____ is the joint effort of all channel members to create a channel that serves customers and creates a competitive advantage.

Apple Stores Apple, Inc. opened its first Apple Store in 2001 and currently has hundreds of stores spanning several countries. Many of the Apple Stores are inside malls, but Apple also has several freestanding stores, which they call their flagship stores, with each looking a little different on the outside. These are located in New York City, Boston, Los Angeles, Chicago, San Francisco, Montreal, Tokyo, and Osaka. The store in New York City is a glass cube with a glass cylindrical elevator and spiral staircase that leads to an underground store. Inside, they have long tables displaying products ranging from the iMac, MacBook Air, iPods, printers, cameras, and other accessories. All these products are accessible to customers who can try them out and ask various questions of informed associates. The walls are mostly metallic, and the signs are all backlit. All stores have a Genius Bar where customers can receive technical advice or set up service and repair for their products. To address the needs of the many iPod users, some stores, such as the New York store, have set up a separate iPod Bar where customers can get their own technical assistance. They also have an iMac station for kids who want to try out games and learning products and a theater for workshops, product training sessions, and special presentations. Apple introduced the handheld Easy Pay system where customers don't have to wait in line to purchase products. With a simple click of a paperless, handheld credit card scanner, the employee brings the cash register to the customer. Items can be rung up anywhere on the show room floor. Apple plans to open several more stores in the years to come. Apple also has its online store. At its Web site, a customer can order any Mac or iPod product, plus a large variety of accessories. In addition to its product offerings, a customer can watch a demonstration of how products work or check out the latest Mac ads or news. -Refer to Apple Stores.In terms of ownership,which of the following best describes Apple stores?

Kroger is the second-largest supermarket chain in the United States.Which of the following is the most likely reason why Kroger supermarkets sell all types of foodstuffs as well as nonfood products including a wide range of eyewear and accessories?