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UB - MGM 301 - Final Exam Study Guide (Exam 3) - Study Guide

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Schools > University at Buffalo > Management Marketing > MGM 301 > UB - MGM 301 - Final Exam Study Guide (Exam 3) - Study Guide

UB - MGM 301 - Final Exam Study Guide (Exam 3) - Study Guide

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background image Final Exam Study Guide Channel Strategy: Creating Time & Place Utility: Time Utility – Convenient & quick for customer to get 
product
How many retailers the company deals with; more 
= better/faster
Convenience  how many stores there are, their 
location, & placement in particular stores
Place Utility – where item is located Convenience – lots of retailers/locations Prestige – “something special” at a particular 
location
Channels of Distribution v. Physical Distribution: Logistical Functions: moving products (methods of 
delivery)
Asserting – variety of products, what products they 
carry
Transporting Transactional Functions: no physical movement of product Selling – manufacturer’s agent will go to retailer to 
try & sell a bulk of product (wholesale)
Risk Taking – who takes the risk when consumer 
returns/does not like product – negotiation
Facilitating Functions: no physical movement, but 
facilitates movement
Financing – terms/agreements with retailers to kepp
them and handle prducts
Market Research – retailers convince manufacturers
to use them
*Breaking Bulk – Manufacturer wants to sell product 
wholesale/by the pallet, by the truckload, but consumer 
wants to buy individual units of product.  Manufacturer 
will sell in bulk to retailer, who will break it down into 
individual units
3 Options for Channel Coverage: Intensive Distribution – maximize the number of retailers 
to sell your product; meant for products that don’t need a 
lot of support
Selective Distribution – a lot of retailers, but not intensive;
needs some support
Exclusive Distribution – specialized product; requires a lot 
of support; well-trained retailer in a particular location
Channel Paths: Direct: Manufacturer  End User Indirect: Manufacturer  Retailer  End User (causes 
channel conflict)
background image Typical:” Manufacturer  Wholesaler  Retailer  End 
User
background image o Types of Channel Members (Intermediaries): Wholesalers: Merchant Wholesaler – completely independent of 
the manufacturer
Distributor – does everything job related
Jobber – carries inventory
Agent – independent distributer who represents 
multiple manufacturers
o Don’t handle inventory Manufacturer’s Sales: Branch – similar to the distributor role, but  the manufacturer owns it Sales Office – plays similar role to agent,  place to take order Retailers: Specialty Store – narrow selection, but deep Department Store – more selection, less depth, 
good service
Power Retailer – Will come with notes from the 
video lecture
Discounter – lots of categories, little depth Non-Store – catalogs/on-line stores/vending 
machines
Types of Channels: Contractual – Franchising (Franchisee, franchisor, licensing
agreement)
Administered – “handshake deal” Vertically Integrated – all channel owners owned by same 
entity
Channel Captain – when one entity needs another more than  that other entity needs it (tradeoff) o Why use the “middle man” (intermediaries)? – transaction  efficiency; ensures the deal runs smoothly Pricing Strategy: “Administered Pricing” – the price is set in advance, there is no  negotiation (not a street market – in-store price is what it is) in 
the consumer market
Participative Pricing – when there is negotiation, like in a 
street market (not a consumer market)
Purpose of Price: To capture the value of a product in the  consumer’s mind.
background image Types of Competition: Price-Based – “lazy way to compete;” there is minimal 
creativity, not sustainable unless you are the lowest cost 
or can outlast competitors, and does not build brand 
equity
Non-Price-Based – selling quality (E.g. – Apple) Price/Quality Relationship: Price communicates value; the higher the price, the 
greater the worth, the higher the quality (what population 
believes, but is not always the case)
Pricing Objectives: Sales (dollar value and unit volume)  lower price = 
higher sales; give up profit
Profits (maximize (through fees, like Verizon) and/or 
satisfice (looking for a reasonable/satisfying profit))
Market Share (lower prices to gain market share) Stability (price change over time) Social Responsibility: Quantity Surcharge – product @ fair price Hidden Fees – credit cards as an example Predatory Pricing – illegal, price product very low to 
drive competition out of marketplace to make 
yourself the only one in the market (need deep 
pockets)
Pricing Approaches: Cost-Based: Types: o Breakeven Analysis: Quantity = Fixed Cost ÷  (Price – Unit Variable Cost); can be adjusted 
to solve for price
o Cost-Plus; Two Variants: Price = TC + (% of TC) Price = TC + Fixed Fee o Markup (most common): % of selling price Price = Cost of Goods ÷ ((100 – 
Markup %)/100)
Profit-Based: Target Profit Pricing: o (Total FC + Total VC + Total Profit) ÷ Total  Number of Units Target ROI Pricing: o Profit = (Total FC + Total VC + (Investment X  ROI)) ÷ Standard Number of Units Problems with Cost & Profit-Based Approaches 
include: internal focus, ignores demand and 
competition, assumes all produced is sold at the 

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School: University at Buffalo
Department: Management Marketing
Course: Marketing
Professor: Dick
Term: Spring 2016
Tags:
Name: Final Exam Study Guide (Exam 3)
Description: Should use notes from lectures, ublearns, videos, and textbook.
Uploaded: 05/04/2016
13 Pages 278 Views 222 Unlocks
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