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Introduction to Business
Chapter 12 DISTRIBUTING AND PROMOTING PRODUCTS AND SERVICES

Learning Outcomes
1. What is the nature and function of distribution (place)?
2. What is wholesaling, and what are the types of wholesalers?
3. What are the different kinds of retail operations?
4. How can supply-chain management increase efficiency and customer
satisfaction?
5. What is promotion, and what are the key elements of a promotional mix?
6. How are advertising media selected?
7. What is personal selling?
8. What are the goals of a sales promotion, and what are several types of sales
promotion?
9. How does public relations fit into the promotional mix?
10. What is social media, and how has it changed promotion?
11. What is e-commerce, and how does it affect promotion?

• Distribution (Place)
• Factor - manages acquisition or raw materials
• Products move from
• Producer or Manufacturer
• Business users & consumers
• Place
• Location selection
• Store layout
• Atmosphere
• Image building
• Location, inventory, transportation, logistics

•Marketing Intermediaries

Exhibit 12.2 A Typical Supply Chain

Exhibit 12.3 Channels of Distribution for B2B and Consumer
Products

Exhibit 12.4 How Distribution Channels Reduce the Number of
Transactions
Sorting –
• eggs sorted by grade &
size
Accumulating
• Merge several lines of
women's dresses from
different designers
Allocating
• Breaking similar
products into smaller
lots
• Tank load of milk

A distribution channel is a series of marketing entities
through which goods and services pass on their way from
producers to end users.
a. True
b. False
Agents are sales representatives for manufacturers or
wholesalers and usually are hired on a commission
basis.
a. True
b. False
_____ is the efficient management of the acquisition of raw
materials to the factory and the movement of products
from the producer to industrial users and consumers.
A. Material handling
B. Transportation
C. Exchange
D. Distribution
E. Intermediation
The _____ is a series of marketing entities through which
goods and services pass on their way from producers to
end-users
A. industrial channel
B. distribution channel
C. consumption channel
D. inventory control process
E. vertical integration process

The chain of manufacturer, agent, wholesaler, and
retailer through which items like x-ray machines, dental
equipment, and safety goggles flow is called a(n) ______
channel.
• A. industrial
• B. consumer
• C. service
• D. distribution
• E. promotional
A person who works as a sales representative for a
manufacturer or wholesaler and gets paid a
commission on any sales is classified a(n):
A. broker
B. merchandiser
C. merchant wholesaler
D. agent
E. distribution captain
Within the distribution channel, retailers and wholesalers are
called:
A. inventory control agents
B. marketing intermediaries
C. movement facilitators
D. logistical managers
E. industrial users
The two types of distribution channels are:
• A. industrial and consumer
• B. wholesaler and retailer
• C. centralized and decentralized
• D. manufacturing and marketing
• E. functional and networked

Roy Petrie is a flower wholesaler. He buys fresh flowers from
countries in South America, divides the large batches into small
bunches, and delivers them to independent florists. This
process is called:
• A. breaking bulk
• B. lot dispersal
• C. inventory separation
• D. product diffusion
• E. inventory diffusion
A retailer would separate children’s clothing purchased
from Carter’s into various sizes and types of clothing, such
as size 6 shirts, size 2T shorts, and size 4T sun dresses. This
process is called:
A. allocating
B. adaptive packaging
C. accumulating
D. sorting out
E. accruing
The process of packing 3 16-ounce bottles of Hershey chocolate
syrup in super-sized packages like those sold at Sam’s and Costco
is an example of:
A. allocating
B. adaptive packaging
C. accumulating
D. sorting out
E. accruing
_____ is the breaking down of large shipments of
similar merchandise into smaller, more usable
quantities that can be sold to consumers and end
users.
A. Lot dispersal
B. Breaking bulk
C. Inventory dispersion
D. Product separation
E. Product diffusion

1. What is the nature and function of distribution
(place)?
• CONCEPT CHECK
1. List and define the marketing intermediaries
that make up a distribution channel.
2. Provide an example of a strategic channel
alliance.
3. How do channels reduce the number of
transactions?

The Coca Cola Supply Chain
• Large beverage companies like
Coca-Cola and Pepsico use a
very large and complex indirect
channel system to distribute
their drink products. The Coca-
Cola company has a very large
and complex channel
distribution system. After
studying the content in Section
12.1, and watching the video be
prepared to discuss the Coca
Cola supply chain.

The Coca Cola Supply Chain
1. Can you outline the indirect channel system based on the information in
the Section, the video and on the website?
2. Why would Coke or Pepsi choose to use an indirect system rather than
produce and distribute 100% of their products themselves?
3. What are the advantages and disadvantages Coke experiences from the
large and complex channel formed with their many bottling partners
around the globe?

An intermediary that takes possession and
title of goods is called a merchant wholesaler.
a. True
b. False
_____ are distribution channel members that
buy finished products from manufacturers and
sell them to retailers.
A. Manufacturers
B. Wholesalers
C. Service providers
D. Market managers
E. Product managers
Independent wholesalers that buy goods from
manufacturers on their own account and then
resell them to other businesses are:
A. brokers
B. agents
C. horizontal marketing systems
D. merchant wholesalers
E. vertical marketing systems
What is the primary difference between a
merchant wholesaler and an agent?
• A. the types of products it carries
• B. the types of customers it serves
• C. the location of its offices
• D. whether it takes title to the product
• E. whether direct or indirect communication is used in
the transaction

A manufacturers' representative is sometimes
called a(n):
A. cash and carry wholesaler
B. limited-service wholesaler
C. industrial distributor
D. manufacturer’ agent
E. merchant broker
_____ bring buyers and sellers together, do not
title to merchandise, receive commission on
sales; and have little say over company sales
policies.
•A. Agents
•B. Wholesalers
•C. Cash and carry wholesalers
•D. Brokers
•E. Sales representatives
In which of the following industries are you most
likely to find a broker?
A. furniture
B. real estate
C. toy
D. hardware
E. petrochemical
Manufacturers' representatives usually:
A. do not take title to goods
B. receive commissions on sales
C. act as independent agents
D. represent noncompeting manufacturers
E. do all of the above

2. What is wholesaling, and what are the types of
wholesalers?
• CONCEPT CHECK
1. Define wholesaling, and describe what
wholesalers do.
2. Describe merchant wholesalers.
3. Explain the difference between agents and
brokers.

Table 12.1 Retailing Takes Many Forms

Table 12.1 Retailing Takes Many Forms, continued

Employee
Type
Employee
Density
Merchandise
Type
Merchandise
Density
Fixture Type
Fixture
Density

Retailing
• Review the material about retailing
covered in Section 12.3, paying
particular attention to Table
12.1. Based upon your own life
experience, would you agree with
the conclusions from the first
video that the examples in Table
12.1 of non-store retailing are in a
better position to grow their
operations than in-store retailers
such as department, specialty and
discount stores? Which of the in-
store organizations seem to you to
be in a stronger position for the
future?

Retailing
• View the second video, which in
2017 predicted 5 technologies that
would help retail enhance
operations to thrive in 2020. Have
you experienced or used any of
these 5 yourself? Some of these
may seem a bit futuristic, but do
you think they are likely to happen
soon, if not this year? For
example, Amazon announced in
March 2020 that they are planning
to sell their automated checkout
system to others:

Retailing
1. Can you describe these 5 technologies in a brief sentence or two?
Beacon
Facial Recognition
Robot Assistants
Smart Mirrors
Auto Checkout

An example of nonstore retailing is the
vending machine from which you
purchased a soda.
a. True
b. False
A retailer is showing concern for a store’s
atmosphere when he considers the type
of store fixtures to have, the size and type
of signage to use, the type of background
music to play, and the number and type of
employees to hire.
a. True
b. False
Internet retailing is also called e-retailing.
a. True
b. False
The two types of retailing are:
• A. functional and non-functional
• B. in-store and out-store
• C. centralized and decentralized
• D. in-store and nonstore
• E. virtual and concrete

Which of the following factors can be used to create an
atmosphere in a store that sells sports memorabilia?
A. life-sized pictures of famous athletes mounted on
the wall
B. store clerks dressed in referee uniforms
C. bright lights
D. the rebroadcasting of famous sports events as
background noise
E. all of the above
Which of the following is NOT a typical task performed by a
supply chain manager?
A. coordinating the sourcing and procuring of raw materials
B. maintaining an inventory control system
C. coordinating customer service activities
D. hiring packers and drivers
E. scheduling production
Which of the following is an example of in-store
retailing?
A. an Internet purchase from an Internet bookseller
B. a Tupperware party
C. the purchase of a bag of corn chips from a vending
machine
D. the purchase of a bottle of Anna Pavlova perfume
that is only available at Saks Fifth Avenue stores
E. none of the above
Abercrombie & Fitch stores are aimed at college-aged
consumers. The parent company also operates retail clothing
stores under the name Hollister, which are targeted to 14- to
18-year-olds and under the name Abercrombie, which sell
children's wear. Abercrombie & Fitch operate:
A. hypermarts
B. factory outlets
C. convenience stores
D. specialty stores
E. department stores

3. What are the different kinds of retail operations?
• CONCEPT CHECK
1. Describe at least five types of in-store
retailing and four forms of nonstore
retailing.
2. What factors most influence a retail store’s
atmosphere?

Goal of Supply
Chain
• Coordinate all activities of
supply-chain members
• Increase customer
satisfaction
• Totally customer driven

Service Distribution Channel
Location
• Company Headquarters
Layout of
area
• Interior – Dry Cleaners
Alternative
Locations
• Architect visiting client
Atmosphere
• Credibility

4. How can supply-chain management increase
efficiency and customer satisfaction?
• CONCEPT CHECK
1. What is the goal of supply-chain
management?
2. What does it mean for a supply chain to be
customer driven?
3. How does distribution (place) differ for
services products?

Marketing Mix
Promotion
Ways that a
company may
inform, persuade,
remind a target
market about their
products/services
Product
Price
Promotion
Place
Target
Market

Promotions
Increase awareness
Attract interest
Arouse desire
Initiate action
Identify customers
Inform potential services

SALES PROMOTIONS
05 ● Designed for consumers or businesses
● Coupons, incentives, special offers, price reductions
SOCIAL MEDIA MARKETING
04 ● Paid & non-paid advertising, delivered through social media
● Variety of formats
DIRECT MARKETING
03
● Promotions sent directly to consumers
● Physical mail, email
● Incentives, catalogs, flyers, communications
PERSONAL SELLING
02
● Products promoted through endorsements and product
knowledge from a salesperson
● Customized for individual customers
ADVERTISING
01
● Paid announcements from an identified sponsor
● Broadcast, Print, Online
● Designed to be seen by large audiences
PUBLIC RELATIONS
06 ● Messaging through the use of media
● Pre-written stories, press releases
Types of Promotion

Integrated Marketing Campaign

The goal of all promotion is to stimulate action.
a. True
b. False
Information promotion is more common in the
early stages of the product life cycle.
a. True
b. False
_____ is the act of informing, persuading, and
reminding the target market about a product.
A. Marketing
B. Distribution
C. Promotion
D. Operations
E. Motivations
Which of the following is NOT an example of a
promotional goal?
A. creating awareness
B. providing information
C. delivering the product
D. retaining customers
E. increasing the use of products

Which goal are airlines trying to achieve when they use
frequent flyer programs, which give customers points
that can be redeemed for free travel, rental cars, and
other merchandise?
A. increase the amount and frequency of use
B. provide information
C. create product awareness
D. get consumers to try their product
E. identify target market(s)
When Canada Dry first introduced Wink soda in the
1960s, it used the slogan, "Join the cola dropouts." The
purpose of this advertising campaign was most likely to:
A. retain loyal customers
B. act as reminder advertising
C. move the cola into the maturity stage of its product
life cycle
D. get customers to try the new product
E. support a mass marketing strategy
Integrated marketing communications (IMC):
A. is a careful coordination of all promotional activities
B. produces a consistent and unified advertising
message
C. produces a customer-focused advertising message
D. is typically overseen by a marketing communications
director
E. is accurately described by all of the above
The _____ is the combination of advertising, personal
selling, sales promotion, and public relations used to
promote a product.
A. marketing mix
B. distribution strategy
C. promotional mix
D. product strategy
E. sales mix

5. What is promotion, and what are the key elements
of a promotional mix?
• CONCEPT CHECK
1. What is the objective of a promotional
campaign?
2. What is the promotional mix?
3. What are the features of an integrated
marketing communications campaign?

Advertising Costs &
Market Penetration

Do Super Bowl Ads really Work for Car Companies?
• As quoted in a recent USA
article, citing the The Hollywood
Reporter as the source, the cost
of a 30-second commercial
during the 2020 Super Bowl
is $5.6 million, up $400,000
from 2019. Review the material
in Section 12.6, then watch the
interview with Audi of
America’s Director of Marketing
Loren Angel on Bloomberg
Television's "In the Loop” show.

Do Super Bowl Ads really Work
for Car Companies?

The goal of all promotion is to stimulate action.
a. True
b. False
Information promotion is more common in the
early stages of the product life cycle.
a. True
b. False
_____ is the act of informing, persuading, and
reminding the target market about a product.
A. Marketing
B. Distribution
C. Promotion
D. Operations
E. Motivations
Which goal are airlines trying to achieve when
they use frequent flyer programs, which give
customers points that can be redeemed for free
travel, rental cars, and other merchandise?
A. increase the amount and frequency of use
B. provide information
C. create product awareness
D. get consumers to try their product
E. identify target market(s)

The _____ is the combination of advertising, personal
selling, sales promotion, and public relations used to
promote a product.
A. marketing mix
B. distribution strategy
C. promotional mix
D. product strategy
E. sales mix
Compassion International is a nonprofit organization
dedicated to releasing poor children from spiritual,
economic, social and physical poverty. What would be
the most likely goal for an advertising campaign for this
international organization?
A. increase the amount and frequency of use
B. provide information
C. create product awareness
D. get consumers to try their product
E. identify target market(s)
Integrated marketing communications (IMC):
A. is a careful coordination of all promotional activities
B. produces a consistent and unified advertising
message
C. produces a customer-focused advertising message
D. is typically overseen by a marketing communications
director
E. is accurately described by all of the above
When Canada Dry first introduced Wink soda in the
1960s, it used the slogan, "Join the cola dropouts." The
purpose of this advertising campaign was most likely to:
A. retain loyal customers
B. act as reminder advertising
C. move the cola into the maturity stage of its product
life cycle
D. get customers to try the new product
E. support a mass marketing strategy

6. How are advertising media selected?
• CONCEPT CHECK
1. How is technology impacting the way
advertisers reach their markets?
2. What are the two main factors that should
be considered when selecting advertising
media?

Exhibit 12.9 Steps in Making a Successful Sale
Qualifying Questions
Does the prospect
have a need for our
product?
Can the prospect
make the buying
decision?
Can the prospect
afford our product?

7. What is personal selling?
• CONCEPT CHECK
1. What are the advantages of personal
selling?
2. Explain the selling process.

Table 12.2 Types of Consumers and Sales Promotion Goals

8. What are the goals of a sales promotion, and
what are several types of sales promotion?
• CONCEPT CHECK
1. How does sales promotion differ from
advertising?
2. Describe several types of sales promotion.

Table 12.3 The Functions of a Public Relations Department

Advertising versus Publicity
• Read and study the material in
Section 12.9, paying particular
attention to Table
12.3. Afterwards, view the video,
which explains the differences
between advertising and public
relations (PR), also called publicity.
• You have already learned about
the various forms of paid
advertising. In the video, the
speaker, Christine Nicholson, calls
PR “earned media”.

Advertising versus Publicity
1. What do you think she meant by this?
2. Did it make sense to you when she claimed PR was worth three times
more than traditional forms of advertising?
3. There’s an old marketing saying for which the author is unknown:
Advertising is what you pay for, publicity is what you pray for. Can you
determine which of the following statements is likely to be advertising
and which is probably PR (publicity)?

9. How does public relations fit into the promotional
mix?
• CONCEPT CHECK
1. How does public relations differ from
advertising?
2. Describe several types of publicity.

10. What is social media, and how has it changed
promotion?
• CONCEPT CHECK
1. How are companies embracing social media
as a way to connect with customers?
2. What has been the effect of social media on
traditional advertising?

E-Commerce Trends That Will Change Retail In 2023

11. What is e-
commerce,
and how does
it affect
promotion?
•
•
•
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