chapter-12-marketing-channels-and-supply-chain-management3368

8/7/2019 chapter-12-marketing-channels-and-supply-chain-management3368

http://slidepdf.com/reader/full/chapter-12-marketing-channels-and-supply-chain-management3368 1/22

Chapter 12Marketing Channels and Supply Chain Management



The Place Component of the

Marketing Mix: Channels ofDistributionLogistics

MaterialsManagementPhysical Distribution



Marketing ChannelsA set ofinterdependentorganizations thatfacilitate the transferof ownership asproducts move fromproducer to businessuser or consumer

Supply Chain – theconnected chain ofbusiness entities(internal and external)that perform orsupport the channelfunctions



Marketing Channel FunctionsSpecialization and division of labor

Specialization and division of labor

Overcoming discrepancies

Overcoming discrepancies

Providing contact efficiency

Providing contact efficiency



Overcoming DiscrepanciesDiscrepancy

ofQuantity

Discrepancyof

Quantity

Discrepancyof

Assortment

Discrepancyof

Assortment

The difference between theamount of product producedand the amount an end user

wants to buy.

The difference between theamount of product producedand the amount an end user

wants to buy.

The lack of all the items acustomer needs to receive fullsatisfaction from a product or

products.

The lack of all the items acustomer needs to receive fullsatisfaction from a product or

products.



6

Providing Contact Efficiency



Channel members - IntermediariesRetailers –Organizations whoseactivities are directedtoward sales to final(ultimate) consumers

Wholesalers –Organizations that sellto retailers or otherwholesalers, and/or tobusinesses orinstitutions for use inthe conduct ofbusiness



Channel Intermediaries

RetailersRetailers

MerchantWholesalersMerchant

Wholesalers

Agentsand

Brokers

Agentsand

Brokers

Take Title to GoodsTake Title to GoodsTake Title to GoodsTake Title to Goods

Take Title to GoodsTake Title to GoodsTake Title to GoodsTake Title to Goods

Do NOT Take Title to GoodsDo NOT Take Title to GoodsDo NOT Take Title to GoodsDo NOT Take Title to Goods



Factors Suggesting Type ofWholesaling Intermediary to Use

Product characteristicsProduct characteristics

Buyer considerationsBuyer considerations

Market characteristicsMarket characteristics



Producer Producer Producer Producer

Consumers Consumers Consumers Consumers

Retailers Retailers Retailers

Wholesalers Wholesalers

Agents orBrokers

Wholesaler Wholesaler Channel Channel

Retailer Retailer Channel Channel

Direct Direct Channel Channel

Agent/Broker Agent/Broker Channel Channel

Channels for Consumer Products



Channels for Business Products

Producer

IndustrialUser


Producer

Govt.Buyer


Producer Producer Producer

IndustrialUser

IndustrialUser

IndustrialUser

IndustrialDistributor

IndustrialDistributor

Agents orBrokers

Agents orBrokers

Agent/Broker Agent/Broker Channel Channel

Industrial Industrial Distributor Distributor

Agent/Broker Agent/Broker Industrial Industrial

Channel Channel



Alternative ChannelArrangements

Multiple channels

Strategic channel alliances

Nontraditional channels



Supply Chain Management

Supply Chain

A management system thatcoordinates and integrates allof the activities performed bysupply chain members into aseamless process, from thesource to the point ofconsumption, resulting in

enhanced customer andeconomic value.



Benefits of Supply ChainManagement

Means of differentiation

Greater supply chain flexibility

Improved customer service

Higher revenues

Reduced costs



Channel Strategy DecisionsFactorsFactors

AffectingAffectingChannelChannelChoiceChoice

FactorsFactorsAffectingAffectingChannelChannelChoiceChoice

Producer FactorsProducer Factors

Product FactorsProduct Factors

Market FactorsMarket Factors

Exclusive DistributionExclusive Distribution

Selective DistributionSelective Distribution

Intensive DistributionIntensive Distribution

Level ofLevel ofDistributionDistribution

IntensityIntensity

Level ofLevel ofDistributionDistribution

IntensityIntensity



Market Factors

MarketMarketFactorsFactorsThat AffectThat AffectChannelChannelChoicesChoices

MarketMarket

FactorsFactorsThat AffectThat AffectChannelChannelChoicesChoices

Customer profilesCustomer profiles

Consumer or IndustrialCustomerConsumer or Industrial

Customer

Size of marketSize of market

Geographic location



Product Factors

ProductProduct


ProductProductFactorsFactorsThat AffectThat AffectChannelChannelChoicesChoices

Product ComplexityProduct Complexity

Product StandardizationProduct Standardization

Product Life CycleProduct Life Cycle

Product DelicacyProduct Delicacy

Product PriceProduct Price



Producer Factors

ProducerProducer


ProducerProducerFactorsFactorsThat AffectThat AffectChannelChannelChoicesChoices

Producer ResourcesProducer Resources

Number of Product LinesNumber of Product Lines

Desire for Channel ControlDesire for Channel Control



Levels of Distribution Intensity

Intensive A form of distribution aimed athaving a product availablein every outlet

Selective A form of distribution achievedby screening dealers to eliminateall but a few in any single area

Exclusive A form of distribution thatestablished one or a fewdealers within a given area



Channel Leadership, Conflict, &

Partnering

ChannelRelationship

Synergy

Channel Conflict

Horizontal Vertical

Channel Power,Control, Leadership

ChannelPartnering



Logistical Components of theSupply Chain

SupplySupplyChainChainTeamTeam

Sourcing & ProcurementSourcing & Procurement

Production SchedulingProduction Scheduling

Order ProcessingOrder Processing

Inventory ControlInventory Control

Warehouse & Materials HandlingWarehouse & Materials Handling

TransportationTransportationLogistics Inf ormation Sy stem

Logisti cs Inf ormat ion

Sy stem



Minimizing wait times

Managing service capacity

Improving service delivery

Channels and Distribution Decisionsfor Services

Documents

chapter-12-marketing-channels-and-supply-chain-management3368