BusinessEssentialsTwelfthEditionChapter13DistributingandPromotingProductsCopyright?2019,2016,2013PearsonEducation,Inc.AllRightsReserved.IntroductionInthischapterwelookattheconceptofplace,thedistributionmix,andthedifferentchannelsandmethodsofdistributionlookatpromotionanddiscusstheconsiderationsinselectingapromotionalmixdiscussthetasksinvolvedinpersonalsellingandvarioustypesofsalespromotionsLearningObjectives(1of2)Explainthemeaningofdistributionmixandidentifythedifferentchannelsofdistribution.Describetheroleofwholesalersandthefunctionsperformedbye-intermediaries.DescribethedifferenttypesofretailingandexplainhowonlineretailersaddvalueforconsumersontheInternet.Definephysicaldistributionanddescribethemajoractivitiesinthephysicaldistributionprocess.LearningObjectives(2of2)Identifytheobjectivesofpromotionandtheconsiderationsinselectingapromotionalmix,anddiscussthevariouskindsofadvertisingpromotions.Outlinethetasksinvolvedinpersonalsellinganddescribethevarioustypesofsalespromotions.TheDistributionMixDistributionMixcombinationofdistributionchannelsbywhichafirmgetsitsproductstoendusersIntermediariesandDistributionChannels(1of2)IntermediaryindividualorfirmthathelpstodistributeaproductWholesalerintermediarywhosellsproductstootherbusinessesforresaletofinalconsumersRetailer

intermediarywhosellsproductsdirectlytoconsumersIntermediariesandDistributionChannels(2of2)DistributionChannelnetworkofinterdependentcompaniesthroughwhichaproductpassesfromproducertoenduserDirectChanneldistributionchannelinwhichaproducttravelsfromproducertoconsumerwithoutintermediariesRetailDistributionRequiresalargeandcostlyamountoffloorspaceforstoringanddisplayingmerchandiseatbrick-and-mortarfacilities.Wholesalersrelievethespaceproblembystoringmerchandiseandrestockingstoredisplaysfrequently.WholesaleDistributionWholesalersindependentoperationsthatbuyproductsfrommanufacturersandsellthemtovariousconsumersorotherbusinessesusuallyprovidestorage,delivery,andadditionalvalue-addingservices,includingcredit,marketingadvice,andmerchandisingservices,suchasmarkingpricesandsettingupdisplaysDistributionbyAgentsorBrokersSalesAgentindependentintermediarywhogenerallydealsintherelatedproductlinesofafewproducersandformslong-termrelationshipstorepresentthoseproducersandmeettheneedsofmanycustomersBrokerindependentintermediarywhomatchesnumeroussellersandbuyersasneeded,oftenwithoutknowinginadvancewhotheywillbeChannelsofDistributionTheValue-AddingIntermediaryDistributionStrategies(1of2)IntensiveDistributionstrategybywhichaproductisdistributedthroughasmanychannelsaspossibleExclusiveDistributionstrategybywhichamanufacturergrantsexclusiverightstodistributeorsellaproducttoalimitednumberofwholesalersorretailersinagivengeographicareaDistributionStrategies(2of2)SelectiveDistributionstrategybywhichacompanyusesonlywholesalersandretailerswhogivespecialattentioninsalesefforttospecificproductsChannelConflictandChannelLeadershipChannelConflictconflictarisingwhenthemembersofadistributionchanneldisagreeovertherolestheyshouldplayortherewardstheyshouldreceiveChannelCaptainchannelmemberwhoismostpowerfulindeterminingtherolesandrewardsofothermembersWholesaling(1of2)MerchantWholesalersindependentwholesalerwhotakeslegalpossessionofgoodsproducedbyavarietyofmanufacturersandthenresellsthemtootherorganizationsFull-ServiceMerchantWholesalersmerchantwholesalerthatprovidescredit,marketing,andmerchandisingservicesinadditiontotraditionalbuyingandsellingservicesWholesaling(2of2)Limited-FunctionMerchantWholesalermerchantwholesalerthatprovidesalimitedrangeofservicesDropShipperslimited-functionmerchantwholesalerthatreceivescustomerorders,negotiateswithproducers,takestitletogoods,andarrangesforshipmenttocustomersTheAdventoftheE-Intermediary(1of2)E-IntermediaryInternetdistributionchannelmemberthatassistsindeliveringproductstocustomersorthatcollectsinformationaboutvarioussellerstobepresentedtoconsumers,ortheyhelpdeliveronlineproductstobuyersSyndicatedSellinge-commercepracticewherebyawebsiteoffersotherwebsitescommissionsforreferringcustomersTheAdventoftheE-Intermediary(2of2)ShoppingAgent(e-agent)e-intermediary(middleman)intheInternetdistributionchannelthatassistsusersinfindingproductsandpricesbutdoesnottakepossessionofproductsTypesofBrick-and-MortarRetailOutlets(1of3)DepartmentStorelargeproduct-lineretailercharacterizedbyorganizationintospecializeddepartmentsSupermarket

largeproduct-lineretailerofferingavarietyoffoodandfood-relateditemsinspecializeddepartmentsSpecialtyStoreretailstorecarryingoneproductlineorcategoryofrelatedproductsTypesofBrick-and-MortarRetailOutlets(2of3)BargainRetailerretailercarryingawiderangeofproductsatbargainpricesDiscountHousebargainretailerthatgenerateslargesalesvolumebyofferinggoodsatsubstantialpricereductionsCatalogShowroombargainretailerinwhichcustomersplaceordersforcatalogitemstobepickedupaton-premiseswarehousesTypesofBrick-and-MortarRetailOutlets(3of3)FactoryOutletbargainretailerownedbythemanufacturerwhoseproductsitsellsWholesaleClubbargainretailerofferinglargediscountsonbrand-namemerchandisetocustomerswhohavepaidannualmembershipfeesConvenienceStoreretailstoreofferingeasyaccessibility,extendedhours,andfastserviceNonstoreRetailing(1of2)Direct-ResponseRetailingformofnonstoreretailinginwhichfirmsdirectlyinteractwithcustomerstoinformthemofproductsandtoreceivesalesordersMailOrder(catalogmarketing)formofnonstoreretailinginwhichcustomersplaceordersforcatalogmerchandisereceivedthroughthemailNonstoreRetailing(2of2)TelemarketingformofnonstoreretailinginwhichthetelephoneisusedtoselldirectlytoconsumersDirectSellingformofnonstoreretailingtypifiedbydoor-to-doorsalesOnlineRetailing(1of2)OnlineRetailingNonstoreretailinginwhichinformationabouttheseller’sproductsandservicesisconnectedtoconsumers’computers,allowingconsumerstoreceivetheinformationandpurchasetheproductsinthehomeE-catalogNonstoreretailinginwhichtheInternetisusedtodisplayproductsOnlineRetailing(2of2)ElectronicStorefrontcommercialwebsiteatwhichcustomersgatherinformationaboutproductsandbuyingopportunities,placeorders,andpayforpurchasesCybermall

collectionofvirtualstorefronts(businesswebsites)representingavarietyofproductsandproductlinesontheInternetLeadingOnlineRetailersinSelectedConsumerProductsCategoriesTable13.1LeadingOnlineRetailersinSelectedConsumerProductsCategories*ConsumerProductCategoryOnlineRetailerMassMerchandiseAOfficeSuppliesStaplesInc.ComputersandElectronicsAppleInc.VideoandAudioEntertainmentNetflixInc.HomeRepairandImprovementHomeDepotApparelandAccessoriesL.L.BeanInc.HomeFurnishingsandHousewaresWilliams-SonomaInc.ToysToys“R”UsInc.HealthandBeautyBath&BodyWorksSportingGoodsCabela’sInc.*Adaptedfrom“Top500Guide,”InternetRetailer(2016),at/top500/list/.InteractiveandVideoRetailingVideoRetailingnonstoreretailingtoconsumersviahometelevisionPhysicalDistributionPhysicalDistributionactivitiesneededtomoveaproductefficientlyfrommanufacturertoconsumerWarehousingOperationsWarehousingphysicaldistributionoperationconcernedwiththestorageofgoodsPrivateWarehousewarehouseownedbyandprovidingstorageforasinglecompanyPublicWarehouseindependentlyownedandoperatedwarehousethatstoresgoodsformanyfirmsTheImportanceofPromotionPromotionaspectofthemarketingmixconcernedwiththemosteffectivetechniquesforcommunicatinginformationaboutandsellingaproductPositioning

processofestablishinganidentifiableproductimageinthemindsofconsumersPromotionalStrategiesPullStrategypromotionalstrategydesignedtoappealdirectlytoconsumerswhowilldemandaproductfromretailersPushStrategypromotionalstrategydesignedtoencouragewholesalersorretailerstomarketproductstoconsumersThePromotionalMixPromotionalMixcombinationoftoolsusedtopromoteaproductFiveStagesintheBuyerDecisionProcessConsumersfirstrecognizetheneedtomakeapurchaseConsumerssearchforinformationaboutavailableproductsConsumerscomparecompetingproductsBuyersarereadytopurchaseproductsConsumersevaluateproductsandnote(andremember)theirstrengthsanddeficienciesTheConsumerBuyingProcessandthePromotionalMixAdvertisingPromotions(1of2)Advertisingpromotionaltoolconsistingofpaid,nonpersonalcommunicationusedbyanidentifiedsponsortoinformanaudienceaboutaproductTop10U.S.NationalAdvertisersAdvertisingPromotions(2of2)AdvertisingMediavarietyofcommunicationdevicesforcarryingaseller’smessagetopotentialcustomersMediaMixcombinationofadvertisingmediachosentocarryamessageaboutaproductTotalU.S.MediaUsage,Strengths,andWeaknesses(1of2)Table13.2TotalU.S.MediaUsage,Strengths,andWeaknessesAdvertisingMediumPercentage*ofAdvertisingOutlaysStrengthsWeaknessesTelevision33%ProgramdemographicsallowforcustomizedadsLargeaudienceMostexpensiveInternet18%TargetedaudienceMeasurablesuccessNuisancetoconsumersEasytoignoreDirectmail13%TargetedaudiencePersonalmessagesPredictableresultsEasilydiscardedEnvironmentallyirresponsibleNewspapers13%BroadcoverageAdscanbechangeddailyQuicklydiscardedBroadreadershiplimitsabilitytotargetspecificaudienceRadio10%InexpensiveLargeaudienceVarietyofreadymarketsegmentationEasytoignoreMessagequicklydisappearsTotalU.S.MediaUsage,Strengths,andWeaknesses(2of2)Table13.2ContinuedAdvertisingMediumPercentage*ofAdvertisingOutlaysStrengthsWeaknessesMagazines10%OftenrereadandsharedVarietyofreadymarketSegmentationRequireadvancedplanningLittlecontroloveradplacementOutdoor3%InexpensiveDifficulttoignoreRepeatexposurePresentslimitedinformationLittlecontroloveraudienceAcombinationofadditionalunmeasuredmedia,suchasyellowpages,catalogs,specialevents,sidewalkhandouts,adsontransportvehicles,skywriting,movies,anddoor-to-doorcommunications,arenotincluded.*Estimated.PersonalSellingPersonalSellingpromotionaltoolinwhichasalespersoncommunicatesone-on-onewithpotentialcustomersRetailSellingsellingaconsumerproductforthebuyer’spersonalorhouseholduse

IndustrialSellingsellingproductstootherbusinesses,eitherforthepurposeofmanufacturingorforresalePersonalSellingTasks(1of2)OrderProcessingpersonal-sellingtaskinwhichsalespeoplereceiveordersandseetotheirhandlinganddeliveryCreativeSellingpersonal-sellingtaskinwhichsalespeopletrytopersuadebuyerstopurchaseproductsbyprovidinginformationabouttheirbenefitsPersonalSellingTasks(2of2)MissionarySellingpersonal-sellingtaskinwhichsalespeoplepromotetheirfirmsandproductsratherthantrytoclosesalesThePersonalSellingProcessProspectingstepinthepersonalsellingprocessinwhichsalespeopleidentifypotentialcustomersQualifyingstepinthepersonalsellingprocessinwhichsalespeopledeterminewhetherprospectshavetheauthoritytobuyandabilitytopayClosing

stepinthepersonalsellingprocessinwhichsalespeopleaskprospectivecustomerstobuyproductsSalesPromotions(1of3)SalesPromotionshort-termpromotionalactivitydesignedtoencourageconsumerbuying,industrialsales,orcooperationfromdistributorsCoupon

sales-promotiontechniqueinwhichacertificateisissuedentitlingthebuyertoareducedpriceSalesPromotions(2of3)Premium

sales-promotiontechniqueinwhichoffersoffreeorreduced-priceitemsareusedtostimulatepurchasesLoyaltyProgramssales-promotiontechniqueinwhichfrequentcustomersarerewardedformakingrepeatpurchasesSalesPromotions(3of3)Point-of-Sale(POS)Displaysales-promotiontechniqueinwhichproductdisplaysarelocatedincertainareastostimulatepurchaseortoprovideinformationonaproductTradeShowsales-promotiontechniqueinwhichvariousmembersofanindustrygathertodisplay,demonstrate,andsellproductsDirect(orInteractive)MarketingDirect(orInteractive)Marketingone-on-onenonpersonalsellingbynonstoreretailersandB2Bsellersusingdirectcontactwithprospectivecustomers,especiallyviatheInternetPublicityandPublicRelationsPublicitypromotionaltoolinwhichinformationaboutacompany,aproduct,oraneventistransmittedbythegeneralmassmediatoattractpublicattentionPublicRelationscompany-influencedinformationdirectedatbuildinggoodwillwiththepublicordealingwithunfavorableeventsApplyingWhatYou’veLearned(1of2)ExplainthemeaningofdistributionmixandidentifythedifferentchannelsofdistributionDescribetheroleofwholesalersandthefunctionsperformedbye-intermediariesDescribethedifferenttypesofretailingandexplainhowonlineretailersaddvalueforconsumersontheInternetDefinephysicaldistributionanddescribethemajoractivitiesinthephysicaldistributionprocessApplyingWhatYou’veLearned(2of2)Identifytheobjectivesofpromotion,theconsiderationsinselectingapromotionalmix,anddiscussthevariouskindsofadvertisingpromotionsOutlinethetasksinvolvedinpersonalsellinganddescribethevarioustypesofsalespromotionsCopyrightBusinessEssentialsTwelfthEditionChapter14InformationTechnology(IT)forBusinessCopyright?2019,2016,2013PearsonEducation,Inc.AllRightsReserved.IntroductionInthischapterwediscussthevariouskindsofinformationtechnology,theirfunctions,andthebenefitsandrisksassociatedwitheachandtheirparticularimportanceexplorehowtechnologyisusedbyandaffectsbusiness,andhowyoucanuseittoyourbestadvantage—asanemployee,investor,manager,orasabusinessownerLearningObjectives(1of2)Discusstheimpactsinformationtechnology(IT)hashadonthebusinessworld.IdentifytheITresourcesbusinesseshaveattheirdisposalandhowtheseresourcesareused.Describetheroleofinformationsystems,thedifferenttypesofinformationsystems,andhowbusinessesusesuchsystems.LearningObjectives(2of2)Identifythethreatsandrisksinformationtechnologyposesonbusinesses.Describethewaysinwhichbusinessesprotectthemselvesfromthethreatsandrisksinformationtechnologyposes.ITImpacts(1of4)InformationTechnology(IT)variousappliancesanddevicesforcreating,storing,exchanging,andusinginformationindiversemodes,includingvisualimages,voice,multimedia,andbusinessdataE-commerce

useoftheInternetandotherelectronicmeansforretailingandbusiness-to-businesstransactionsITImpacts(2of4)CreatingPortableOfficesprovidingremoteaccesstoinstantinformationEnablingBetterServicecoordinatingremotedeliveriesCreatingLeaner,MoreEfficientOrganizationsallowingmoreworkandcustomersatisfactiontobeaccomplishedwithfewerpeopleEnablingIncreasedCollaborationusingcollaborationsoftwareandotherITcommunicationdevicesITImpacts(3of4)EnablingGlobalExchangefosteringcollaborationonaworldwidescaleImprovingManagementProcessesusingenterpriseresourceplanning(ERP)tochangethenatureofthemanagementprocessProvidingFlexibilityforCustomizationcreatingnewmanufacturingcapabilitiesthatoffercustomersgreatervariety(masscustomization)andfasterdeliverycyclesITImpacts(4of4)ProvidingNewBusinessOpportunitiescreatingentirelynewbusinesseswherenoneexistedbeforeImprovingtheWorldandOurLivesadvancingmedicalanddiagnostictechniquesInternetNetworkingforMassCustomizationofaPhysicalProductTheInternetandOtherCommunicationResources(1of3)Internetgiganticsystemofinterconnectedcomputernetworkslinkedtogetherbyvoice,electronic,andwirelesstechnologiesWorldWideWebbranchoftheInternetconsistingofinterlinkedhypertextdocuments,orwebpagesHypertextTransferProtocol(HTTP)communicationsprotocolusedfortheWorldWideWeb,inwhichrelatedpiecesofinformationonseparatewebpagesareconnectedusinghyperlinksTheInternetandOtherCommunicationResources(2of3)Intranet

organization’sprivatenetworkofinternallylinkedwebsitesaccessibleonlytoemployeesExtranet

systemthatallowsoutsiderslimitedaccesstoafirm’sinternalinformationnetworkTheInternetandOtherCommunicationResources(3of3)ElectronicConferencingITthatallowsgroupsofpeopletocommunicatesimultaneouslyfromvariouslocationsviae-mail,phone,orvideoVSATSatelliteCommunicationsnetworkofgeographicallydispersedtransmitter-receivers(transceivers)thatsendsignalstoandreceivesignalsfromasatellite,exchangingvoice,video,anddatatransmissionsAVSATSatelliteCommunicationNetworkNetworks:SystemArchitecture(1of4)ComputerNetworkgroupoftwoormorecomputerslinkedtogetherbysomeformofcablingorbywirelesstechnologytosharedataorresources,suchasaprinterClient-ServerNetworkcommonbusinessnetworkinwhichclientsmakerequestsforinformationorresourcesandserversprovidetheservicesNetworks:SystemArchitecture(2of4)WideAreaNetwork(WAN)computersthatarelinkedoverlongdistancesthroughtelephonelines,microwavesignals,orsatellitecommunicationsLocalAreaNetwork(LAN)computersthatarelinkedinasmallarea,suchasallofafirm’scomputerswithinasinglebuildingWirelessWideAreaNetwork(WWAN)networkthatusesairborneelectronicsignalsinsteadofwirestolinkcomputersandelectronicdevicesoverlongdistancesNetworks:SystemArchitecture(3of4)Wi-Fi

technologyusingawirelesslocalareanetworkWideAreaNetwork(WAN)computersthatarelinkedoverlongdistancesthroughtelephonelines,microwavesignals,orsatellitecommunicationsLocalAreaNetwork(LAN)computersthatarelinkedinasmallarea,suchasallofafirm’scomputerswithinasinglebuildingNetworks:SystemArchitecture(4of4)“SuperWi-Fi”NetworkapowerfulWi-FinetworkwithextensivereachandstrongsignalsthatflowfreelythroughphysicalobjectssuchaswallsHardwareandSoftwareHardware

physicalcomponentsofacomputernetwork,suchaskeyboards,monitors,systemunits,andprintersSoftwareprogramsthattellthecomputerhowtofunction,whatresourcestouse,howtousethem,andapplicationprogramsforspecificactivitiesInformationSystems:HarnessingtheCompetitivePowerofITInformationSystem(IS)systemthatusesITresourcestoconvertdataintoinformationandtocollect,process,andtransmitthatinformationforuseindecisionmakingDatarawfactsandfiguresthat,bythemselves,maynothavemuchmeaningInformation

meaningful,usefulinterpretationofdataLeveragingInformationResources:DataWarehousingandDataMiningInformationSystemsManagersmanagerswhoareresponsibleforthesystemsusedforgathering,organizing,anddistributinginformationDataWarehousingthecollection,storage,andretrievalofdatainelectronicfilesDataMiningtheapplicationofelectronictechnologiesforsearching,sifting,andreorganizingpoolsofdatatouncoverusefulinformationInformationSystemsforKnowledgeWorkers(1of2)KnowledgeInformationSysteminformationsystem(IS)thatsupportsknowledgeworkersbyprovidingresourcestocreate,store,use,andtransmitnewknowledgeforusefulapplicationsInformationSystemsforKnowledgeWorkers(2of2)Computer-AidedDesign(CAD)ISwithsoftwarethathelpsknowledgeworkersdesignproductsbysimulatingthemanddisplayingtheminthree-dimensionalgraphicsComputer-AidedManufacturing(CAM)ISthatusescomputerstodesignandcontrolequipmentinamanufacturingprocessInformationSystemsforManagersManagementInformationSystem(MIS)computersystemthatsupportsmanagersbyprovidinginformation—reports,schedules,plans,andbudgets—thatcanbeusedformakingdecisionsDecisionSupportSystem(DSS)interactivesystemthatcreatesvirtualbusinessmodelsforaparticularkindofdecisionandteststhemwithdifferentdatatoseehowtheyrespondITRisksandThreats(1of3)Hackercybercriminalwhogainsunauthorizedaccesstoacomputerornetwork,eithertostealinformation,money,orpropertyortotamperwithdataDoSattacks,wirelessmoochingITRisksandThreats(2of3)IdentityTheftunauthorizeduseofpersonalinformation(suchasSocialSecuritynumberandaddress)togetloans,creditcards,orothermonetarybenefitsbyimpersonatingthevictimphishing,pharmingIntellectualPropertysomethingproducedbytheintellectormindthathascommercialvalueITRisksandThreats(3of3)Spywareprogramunknowinglydownloadedbyusersthatmonitorstheircomputeractivities,gatheringe-mailaddresses,creditcardnumbers,andotherinformationthatittransmitstosomeoneoutsidethehostsystemSpamjunke-mailsenttoamailinglistoranewsgroupITProtectionMeasures(1of2)FirewallsecuritysystemwithspecialsoftwareorhardwaredevicesdesignedtokeepcomputerssafefromhackersAnti-VirusSoftwareproductthatprotectssystemsbysearchingincominge-mailsanddatafilesfor“signatures”ofknownvirusesandvirus-likecharacteristicsITProtectionMeasures(2of2)EncryptionSystemsoftwarethatassignsane-mailmessagetoauniquecodenumber(digitalfingerprint)foreachcomputersoonlythatcomputer,notothers,canopenandreadthemessageAreasforEthicalConcernsinInformationTechnologyandItsUses(1of2)Table14.1AreasforEthicalConcernsinInformationTechnologyandItsUsesInanow-classiccaseofcyberbullying,a13-year-oldgirlhangedherselfafterbeingtauntedbyahoaxmessageonherMySpacepage.Secretwebcastsofotherpeople’sbehaviorhaveresultedinembarrassmentandevendeath:Auniversitystudent,leavingafinalmessageonhisFacebookpage,jumpedfroma