ch[1]. 13 final

Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-1

MANAGING MARKETING

CHANNELS AND SUPPLY CHAINS

CHAPTER


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.


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.


APPLE STORES: ADDINGHIGH-TOUCH TO HIGH-TECH

MARKETING CHANNELS


NATURE AND IMPORTANCE OF MARKETING CHANNELS

• What is a Marketing Channel of Distribution?

Marketing Channel


FIGURE 13-1 FIGURE 13-1 Terms used for marketing intermediaries


Functions Performed by Intermediaries

NATURE AND IMPORTANCE OF MARKETING CHANNELS

• Value Created by Intermediaries

• Transactional Function

• Logistical Function

• Facilitating Function


FIGURE 13-2 FIGURE 13-2 Marketing channel functions performed by intermediaries

Consumer Benefits from Intermediaries


• Marketing Channels for Consumer Goods and Services

Direct Channel

Indirect Channels

CHANNEL STRUCTURE AND ORGANIZATION


FIGURE 13-3 FIGURE 13-3 Common marketing channels for consumer goods and services


• Marketing Channels for Business Goods and Services

Industrial Distributor

Agent



FIGURE 13-4 FIGURE 13-4 Common marketing channels for business goods and services



• Electronic Marketing Channels

• Multiple Channels and Strategic Alliances

Dual Distribution

Strategic Channel Alliances


FIGURE 13-5 FIGURE 13-5 Representative consumer electronic marketing channels


Corporate Systems


• Corporate Vertical Marketing System

• Forward Integration

• Vertical Marketing Systems

• Backward Integration


FIGURE 13-6 FIGURE 13-6 Types of vertical marketing systems



• Wholesaler-Sponsored Voluntary Chains

• Retailer-Sponsored Cooperatives

Contractual Systems

• Contractual Vertical Marketing System




Contractual Systems

• Franchising

Manufacturer-Sponsored Wholesale Systems

Manufacturer-Sponsored Retail Franchise Systems

Service-Sponsored Franchise Systems

Service-Sponsored Retail Franchise Systems


Administered Systems


Sherwin-Williams and H&R Block What vertical marketing system does each use?


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



Target Market Coverage

• Intensive Distribution

• Exclusive Distribution

• Selective Distribution




Satisfying Buyer Requirements

• Information

• Convenience

• Variety

• Pre- or Post-Sale Services

Profitability



Jiffy Lube and PETCO What buyer requirements are satisfied?



Conflict in Marketing Channels

• Channel Conflict

• Channel Relationships: Conflict and Cooperation

• Vertical Conflict

• Horizontal Conflict

Disintermediation



Cooperation in Marketing Channels

• Channel Captain

• Channel Relationships: Conflict and Cooperation

Economic

Expertise

Identification

Legitimate Right


LOGISTICS ANDSUPPLY CHAIN MANAGEMENT

Flow of the Product

• Logistics

• Logistics Management

Cost-Effective

Customer Service



• Supply Chains versus Marketing Channels

Supply Chain

Supply Chain Management


FIGURE 13-7 FIGURE 13-7 Relating logistics management and supply chain management to supplier networks and marketing channels


FIGURE 13-8: FIGURE 13-8: Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain


FIGURE 13-AFIGURE 13-A Paint industry supply chain



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



Cross-Docking

• Dell: A Responsive Supply Chain

• Wal-Mart: An Efficient Supply Chain


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


FIGURE 13-9 FIGURE 13-9 Supply chain managers balance total logistics cost factors against customer service factors


TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN

Dependability

• Customer Service Concept

• Vendor-Managed Inventory (VMI)

Communication

Convenience


FIGURE 13-B FIGURE 13-B Advantages and disadvantages of five modes of transportation


FINDING A FRANCHISEFOR YOU

GOING ONLINE


1. Visit the Franchise.com website, and click on the “Franchise Buyer” link. Which franchise opportunities fit you?

Going Online


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


TRANSPORTATION:A KEY LOGISTICS FUNCTION

IN A SUPPLY CHAIN

SUPPLEMENTALLECTURE NOTE 13-2


FedEx and MaerskWhat transportation modes does each perform?


MARKETING CHANNELS FOR APPLE COMPUTER

IN-CLASS ACTIVITY 13-1


Apple Computer Products

Mac mini

iPod

iMac G5


Apple Computer Marketing Channel Structure: Online Apple Store - Direct Channel

CustomersConsumer

Producer


Apple Computer Marketing Channel Structure: Apple Retail Store - Direct Channel

CustomersConsumer

Producer


Apple Computer Marketing Channel Structure:CompUSA - Direct Channel/Strategic Channel Alliance

CustomersConsumer

Retailer

Producer

Apple Employees Staff CompUSAStore-Within-

A-Store

CompUSA


Apple Computer Marketing Channel Structure: Ingram Micro/Best Buy - Indirect Channel

CustomersConsumer

Wholesaler

Retailer

Producer

Best Buy

Ingram

Micro


Apple Computer Marketing Channel Structure: MacMall Online/Catalog Sales - Indirect Channel

CustomersConsumer

Retailer

Producer

MacMall


MARKETING CHANNELS FOR FASTENAL’S UNIQUE

THREADED FASTENERS

IN-CLASS ACTIVITY 13-2


Fastenal Fasteners


Fastenal Fasteners (Unique Heads/Tops)


Fastenal Fasteners (Unique Drivers/Tools)


FIGURE 13-C FIGURE 13-C Common marketing channels for business goods and services


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.

ch[1]. 13 final

Documents