Ch[1]. 13 Final
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Transcript of Ch[1]. 13 Final
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-1
MANAGING MARKETING
CHANNELS AND SUPPLY CHAINS
CHAPTER
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-2
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
2. Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems.
1. Explain what is meant by a marketing channel of distribution and why intermediaries are needed.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-3
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
3. Describe factors that marketing executives consider when selecting and managing a marketing channel.
4. Explain what supply chain and logistics management are and how they relate to marketing strategy.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-4
APPLE STORES: ADDINGHIGH-TOUCH TO HIGH-TECH
MARKETING CHANNELS
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-5
NATURE AND IMPORTANCE OF MARKETING CHANNELS
• What is a Marketing Channel of Distribution?
Marketing Channel
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-6
FIGURE 13-1 FIGURE 13-1 Terms used for marketing intermediaries
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-7
Functions Performed by Intermediaries
NATURE AND IMPORTANCE OF MARKETING CHANNELS
• Value Created by Intermediaries
• Transactional Function
• Logistical Function
• Facilitating Function
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-8
FIGURE 13-2 FIGURE 13-2 Marketing channel functions performed by intermediaries
Consumer Benefits from Intermediaries
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-9
• Marketing Channels for Consumer Goods and Services
Direct Channel
Indirect Channels
CHANNEL STRUCTURE AND ORGANIZATION
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-10
FIGURE 13-3 FIGURE 13-3 Common marketing channels for consumer goods and services
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-11
• Marketing Channels for Business Goods and Services
Industrial Distributor
Agent
CHANNEL STRUCTURE AND ORGANIZATION
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-12
FIGURE 13-4 FIGURE 13-4 Common marketing channels for business goods and services
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-13
CHANNEL STRUCTURE AND ORGANIZATION
• Electronic Marketing Channels
• Multiple Channels and Strategic Alliances
Dual Distribution
Strategic Channel Alliances
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-14
FIGURE 13-5 FIGURE 13-5 Representative consumer electronic marketing channels
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-15
Corporate Systems
CHANNEL STRUCTURE AND ORGANIZATION
• Corporate Vertical Marketing System
• Forward Integration
• Vertical Marketing Systems
• Backward Integration
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-16
FIGURE 13-6 FIGURE 13-6 Types of vertical marketing systems
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-17
CHANNEL STRUCTURE AND ORGANIZATION
• Wholesaler-Sponsored Voluntary Chains
• Retailer-Sponsored Cooperatives
Contractual Systems
• Contractual Vertical Marketing System
• Vertical Marketing Systems
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-18
CHANNEL STRUCTURE AND ORGANIZATION
Contractual Systems
• Franchising
Manufacturer-Sponsored Wholesale Systems
Manufacturer-Sponsored Retail Franchise Systems
Service-Sponsored Franchise Systems
Service-Sponsored Retail Franchise Systems
• Vertical Marketing Systems
Administered Systems
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-19
Sherwin-Williams and H&R Block What vertical marketing system does each use?
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-20
CHANNEL CHOICE AND MANAGEMENT
• Factors in Choosing a Marketing Channel
Provide the Best Target Market Coverage
Best Satisfy the Target Market’sBuying Requirements
Be the Most Profitable
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-21
CHANNEL CHOICE AND MANAGEMENT
Target Market Coverage
• Intensive Distribution
• Exclusive Distribution
• Selective Distribution
• Factors in Choosing a Marketing Channel
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-22
CHANNEL CHOICE AND MANAGEMENT
Satisfying Buyer Requirements
• Information
• Convenience
• Variety
• Pre- or Post-Sale Services
Profitability
• Factors in Choosing a Marketing Channel
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-23
Jiffy Lube and PETCO What buyer requirements are satisfied?
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-24
CHANNEL CHOICE AND MANAGEMENT
Conflict in Marketing Channels
• Channel Conflict
• Channel Relationships: Conflict and Cooperation
• Vertical Conflict
• Horizontal Conflict
Disintermediation
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-25
CHANNEL CHOICE AND MANAGEMENT
Cooperation in Marketing Channels
• Channel Captain
• Channel Relationships: Conflict and Cooperation
Economic
Expertise
Identification
Legitimate Right
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-26
LOGISTICS ANDSUPPLY CHAIN MANAGEMENT
Flow of the Product
• Logistics
• Logistics Management
Cost-Effective
Customer Service
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-27
LOGISTICS ANDSUPPLY CHAIN MANAGEMENT
• Supply Chains versus Marketing Channels
Supply Chain
Supply Chain Management
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-28
FIGURE 13-7 FIGURE 13-7 Relating logistics management and supply chain management to supplier networks and marketing channels
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-29
FIGURE 13-8: FIGURE 13-8: Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-30
FIGURE 13-AFIGURE 13-A Paint industry supply chain
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-31
LOGISTICS ANDSUPPLY CHAIN MANAGEMENT
Aligning a Supply Chain w/ Marketing Strategy
• Supply Chain Management and Marketing Strategy
• Understand the Customer
• Understand the Supply Chain
• Harmonize the Supply Chain with the Marketing Strategy
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-32
LOGISTICS ANDSUPPLY CHAIN MANAGEMENT
Cross-Docking
• Dell: A Responsive Supply Chain
• Wal-Mart: An Efficient Supply Chain
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-33
TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN
Time
• Customer Service Concept
• Order Cycle or Replenishment Time
• Quick Response or Efficient Consumer Response
• Total Logistics Cost Concept
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-34
FIGURE 13-9 FIGURE 13-9 Supply chain managers balance total logistics cost factors against customer service factors
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-35
TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN
Dependability
• Customer Service Concept
• Vendor-Managed Inventory (VMI)
Communication
Convenience
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-36
FIGURE 13-B FIGURE 13-B Advantages and disadvantages of five modes of transportation
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-37
FINDING A FRANCHISEFOR YOU
GOING ONLINE
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-38
1. Visit the Franchise.com website, and click on the “Franchise Buyer” link. Which franchise opportunities fit you?
Going Online
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-39
2. Visit the International Franchise Association website, and click on the “Resource Center” link. Then, click on the “News” link. What are the current trends in franchising?
Going Online
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-40
TRANSPORTATION:A KEY LOGISTICS FUNCTION
IN A SUPPLY CHAIN
SUPPLEMENTALLECTURE NOTE 13-2
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-41
FedEx and MaerskWhat transportation modes does each perform?
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-42
MARKETING CHANNELS FOR APPLE COMPUTER
IN-CLASS ACTIVITY 13-1
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-43
Apple Computer Products
Mac mini
iPod
iMac G5
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-44
Apple Computer Marketing Channel Structure: Online Apple Store - Direct Channel
CustomersConsumer
Producer
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-45
Apple Computer Marketing Channel Structure: Apple Retail Store - Direct Channel
CustomersConsumer
Producer
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-46
Apple Computer Marketing Channel Structure:CompUSA - Direct Channel/Strategic Channel Alliance
CustomersConsumer
Retailer
Producer
Apple Employees Staff CompUSAStore-Within-
A-Store
CompUSA
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-47
Apple Computer Marketing Channel Structure: Ingram Micro/Best Buy - Indirect Channel
CustomersConsumer
Wholesaler
Retailer
Producer
Best Buy
Ingram
Micro
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-48
Apple Computer Marketing Channel Structure: MacMall Online/Catalog Sales - Indirect Channel
CustomersConsumer
Retailer
Producer
MacMall
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-49
MARKETING CHANNELS FOR FASTENAL’S UNIQUE
THREADED FASTENERS
IN-CLASS ACTIVITY 13-2
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-50
Fastenal Fasteners
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-51
Fastenal Fasteners (Unique Heads/Tops)
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-52
Fastenal Fasteners (Unique Drivers/Tools)
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-53
FIGURE 13-C FIGURE 13-C Common marketing channels for business goods and services
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-54
Marketing Channel
A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-55
Dual Distribution
Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-56
Vertical Marketing Systems
Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.
Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-57
Franchising
Franchising is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules.
Franchising is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-58
Intensive Distribution
Intensive distribution is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.
Intensive distribution is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-59
Exclusive Distribution
Exclusive distribution is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm’s products.
Exclusive distribution is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm’s products.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-60
Selective Distribution
Selective distribution is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products.
Selective distribution is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-61
Channel Conflict
Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.
Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-62
Disintermediation
Disintermediation is channel conflict that arises when a channel member bypasses another member and sells or buys products direct.
Disintermediation is channel conflict that arises when a channel member bypasses another member and sells or buys products direct.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-63
Logistics
Logistics consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.
Logistics consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-64
Supply Chain
A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users.
A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-65
Total Logistics Cost
Total logistics cost consists of expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling.
Total logistics cost consists of expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-66
Customer Service
Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.
Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.
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Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-67
Vendor-Managed Inventory
Vendor-managed inventory (VMI)is an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.
Vendor-managed inventory (VMI)is an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.