Marketing Channels and Supply Chain Management

1. Marketing Channels and Supply Chain Management Chapter 13

2. 10 - 2 Road Map: Previewing the Concepts Explain why companies use distribution channels and discuss the functions these channels perform. Discuss how channel members interact and how they organize to perform the work of the channel. Identify the major channel alternatives open to a company.

3. 10 - 3 Explain how companies select, motivate, and evaluate channel members. Discuss the nature and importance of marketing logistics and supply chain management. Road Map: Previewing the Concepts

4. 10 - 4 Marketing or Distribution Channel A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

5. 10 - 5 How Channel Members Add Value The use of intermediaries results from their greater efficiency in making goods available to target markets. Offers the firm more than it can achieve on its own through the intermediaries: Contacts Experience Specialization Scale of operation

6. 10 - 6 Channel Functions Information Promotion Contact Matching

7. 10 - 7 Channel Behavior The channel will be most effective when: each member is assigned tasks it can do best. all members cooperate to attain overall channel goals. If this does not happen, conflict occurs: Horizontal Conflict occurs among firms at the same level of the channel (e.g., retailer to retailer). Vertical Conflict occurs between different levels of the same channel (e.g., wholesaler to retailer). Some conflict can be healthy competition.

8. 10 - 8 Vertical Marketing System A distribution channel structure in which producers, wholesalers, and retailers act as a unified system One channel member owns the other, has contracts with them, or has so much power that they all cooperate.

9. 10 - 9 Types of Vertical Marketing Systems Corporate VMS Contractual VMS Administered VMS

10. 10 - 10 Franchise Organization Manufacturer-Sponsored Retailer Franchise System Ford and its independent franchised dealers Manufacturer-Sponsored Wholesaler Franchise System Coca-Cola’s licensed bottlers Service-Firm Sponsored Retailer Franchise System McDonald’s, Avis, and Holiday Inn

11. 10 - 11 Innovations in Marketing Systems Horizontal Marketing System Hybrid Marketing System

12. 10 - 12 Changing Channel Organization Disintermediation means that more and more, product and service producers are bypassing intermediaries and going directly to final buyers, or that radically new types of channel intermediaries are emerging to displace traditional ones.

13. 10 - 13 Channel Design Decisions Analyzing Consumer Needs Setting Channel Objectives Identifying Major Alternatives Types of intermediaries Number of intermediaries Responsibilities of intermediaries

14. 10 - 14 Types of Intermediaries Company sales force Manufacturer’s agency Industrial distributors

15. 10 - 15 Number of Intermediaries Intensive distribution Exclusive distribution Selective distribution

16. 10 - 16 Evaluating the Major Alternatives Economic Criteria: A company compares the likely sales, costs, and profitability of different channel alternatives. Control Issues: How and to whom should control be given? Adaptive Criteria: Consider long-term commitment vs. flexibility.

17. 10 - 17 Channel Management Decisions Selecting channel members Managing and motivating channel members Evaluating channel members

18. 10 - 18 Public Policy and Distribution Decisions Exclusive distribution Exclusive dealing Exclusive territorial agreements Tying agreements

19. 10 - 19 Logistics and Supply Chain Management Planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit. Includes: Outbound distribution Inbound distribution Reverse distribution

20. 10 - 20 Major Logistics Functions Warehousing Inventory management Transportation Logistics information management

21. 10 - 21 Warehousing How many, what types, and where? Storage warehouses Distribution centers Automated warehouses

22. 10 - 22 Inventory Management Must balance between too much and too little inventory. Just-in-time logistics systems RFID, AutoID, or Smart Tag technology

23. 10 - 23 Transportation Trucks Railroads Water carriers Pipelines Air Internet Intermodal transportation

24. 10 - 24 Integrated Logistics Management The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations, to maximize the performance of the entire distribution system. Involves: Cross-functional teamwork inside the company Building logistics partnerships Third-party logistics

25. 10 - 25 Rest Stop: Reviewing the Concepts Explain why companies use distribution channels and discuss the functions these channels perform. Discuss how channel members interact and how they organize to perform the work of the channel. Identify the major channel alternatives open to a company.

26. 10 - 26 Rest Stop: Reviewing the Concepts Explain how companies select, motivate, and evaluate channel members. Discuss the nature and importance of marketing logistics and integrated supply chain management.