Download - Unit IV Logistics Management Promotion
-
8/13/2019 Unit IV Logistics Management Promotion
1/23
1
Chapter 12
Distribution Channels and
Logistics Management
-
8/13/2019 Unit IV Logistics Management Promotion
2/23
2
What is the Nature
Of DistributionChannels?
How do ChannelFirms Interact andOrganize to do the
Work of theChannel?
Issues Concerning
Distribution Channels
What Problems doCompanies Face in
Designing andManaging Their
Channels?
What Role DoesPhysical Distribution
Play in Attractingand Satisfying
Customers?
-
8/13/2019 Unit IV Logistics Management Promotion
3/23
3
What is a Distribution
Channel?A set of interdependent organizations(intermediaries) involved in the process
of making a product or service availablefor use or consumption by the consumeror business user.
Marketing Channel decisions are amongthe most important decisions thatmanagement faces and will directly
affect every other marketing decision.
-
8/13/2019 Unit IV Logistics Management Promotion
4/23
4
Why are Marketing
Intermediaries Used?The use of intermediaries results from theirgreater efficiency in making goods available totarget markets.
Offer the firm more than it can achieve on itsown through the intermediaries:
Contacts,
Experience, Specialization,
Scale of operation.
Purpose: match supply from producers to demandfrom consumers.
k d
-
8/13/2019 Unit IV Logistics Management Promotion
5/23
5
How a Marketing IntermediaryReduces the Number of
Channel Transactions
-
8/13/2019 Unit IV Logistics Management Promotion
6/23
6
Contact
Financing
InformationRisk Taking
Promotion
MatchingNegotiation
PhysicalDistribution
These Functions Should be Assigned to the Channel Member Who CanPerform Them Most Efficiently and Effectively to Provide Satisfactory
Assortments of Goods and Services to Target Customers.
Distribution Channel
Functions
In this video clip, a D upont executive speaks about managing
the supply chain and the logistics process for two well-known
brands: Nomex and Kevlar.
Clicktoplay
li
-
8/13/2019 Unit IV Logistics Management Promotion
7/237
M W J R C
M W R C
M R C
M C
Channel 1
Channel 2
Channel 3
Channel 4
Channel Level - Each Layer of Marketing Intermediaries thatPerform Some Work in Bringing the Product and its Ownership
Closer to the Final Buyer.
Number of Channel Levels
(Fig. 12.2)
Direct Channel
Indirect Channel
-
8/13/2019 Unit IV Logistics Management Promotion
8/238
Channel Behavior & ConflictThe channel will be most effective when: each member is assigned tasks it can do best.
all members cooperate to attain overall channel goals
and satisfy the target market.When this doesnt happen, conflict occurs: Horizontal Conflict occurs among firms at the same
level of the channel, i.e retailer to retailer.
Vertical Conflict occurs between different levels of thesame channel, i.e. wholesaler to retailer.
For the channel to perform well, each channelmembers role must be specified and conflict must
be managed.
-
8/13/2019 Unit IV Logistics Management Promotion
9/239
Conventional Marketing ChannelVs. a Vertical Marketing System
(Fig. 12.3)ConventionalMarketingChannel
VerticalMarketingSystem
Manufacturer
Retailer
W
holesaler
Manufacturer
Wholesaler
Retailer
ConsumerConsumer
-
8/13/2019 Unit IV Logistics Management Promotion
10/2310
CorporateCommon Ownership at DifferentLevels of the Channel i.e. Sears
ContractualContractual Agreements Among
Channel Members
AdministeredLeadership is Assumed by One or
a Few Dominant Members i.e. Kraft
Degree ofDirect
Control
Types of Vertical Marketing
Systems
-
8/13/2019 Unit IV Logistics Management Promotion
11/2311
ContractualVMS
RetailerCooperatives
Franchise
Organizations
Wholesaler Sponsored
Voluntary Chain
Service-Firm-Sponsored
Franchise System
Manufacturer-Sponsored Wholesaler
Franchise System
Manufacturer-Sponsored Retailer
Franchise System
Vertical MarketingSystems (VMS)
CorporateVMS
AdministeredVMS
Types of Vertical Marketing
Systems
-
8/13/2019 Unit IV Logistics Management Promotion
12/2312
Innovations in Marketing
SystemsHorizontal Marketing
System
Two or More Companiesat One Channel Level
Join Together toFollow a New
Marketing Opportunity.
Example:
Banks in Grocery Stores
Hybrid MarketingSystem
A Single Firm Sets UpTwo or More MarketingChannels to Reach
One or More CustomerSegments.
Example:
Retailers, Catalogs,and Sales Force
-
8/13/2019 Unit IV Logistics Management Promotion
13/2313
Discussion ConnectionsDescribe the kinds of horizontal andvertical channel conflict that might occur in
one of the following: Personal computer industry,
Automobile industry,
Music industry,
Clothing industry.
How would you remedy the problems youhave just described?
-
8/13/2019 Unit IV Logistics Management Promotion
14/23
14
Changing Channel
Organization
A Major Trend is TowardDisintermediation Which Means thatProduct and Service Producers are
Bypassing Intermediaries and Going
Directly to Final Buyers or That NewTypes of Channel Intermediaries areEmerging to Displace Traditional Ones.
-
8/13/2019 Unit IV Logistics Management Promotion
15/23
15
Analyzing Consumer Service Needs
Setting Channel Objectives & Constraints
Exclusive
Distribution
Selective
Distribution
Intensive
Distribution
Identifying Major Alternatives
Evaluating the Major Alternatives
Designing International Distribution Channels
Channel Design Decisions
-
8/13/2019 Unit IV Logistics Management Promotion
16/23
-
8/13/2019 Unit IV Logistics Management Promotion
17/23
17
Nature and Importance of
Marketing LogisticsInvolves getting the right product to the rightcustomers in the right place at the right time.
Companies today place greater emphasis onlogistics because: customer service and satisfaction have become the
cornerstone of marketing strategy.
logistics is a major cost element for most companies.
the explosion in product variety has created a needfor improved logistics management.
Improvements in information technology has createdopportunities for major gains in distribution efficiency.
-
8/13/2019 Unit IV Logistics Management Promotion
18/23
18
Goals of the Logistics System
Lower Distribution Costs;Lower Customer Service
Levels
Higher Distribution Costs;Higher Customer Service
Levels
Goal:
To Provide a Targeted Level of Customer Service
at the Least Cost.
-
8/13/2019 Unit IV Logistics Management Promotion
19/23
19
InventoryWhen to order
How much to orderJust-in-time
CostsMinimize Costs of
Attaining Logistics
Objectives
WarehousingStorage
DistributionAutomated
Order ProcessingReceivedProcessedShipped
Logistics
FunctionsTransportation
Rail, Truck, Water,
Pipeline, Air,Intermodal
Major Logistics Functions
-
8/13/2019 Unit IV Logistics Management Promotion
20/23
20
RailNations largest carrier, cost-effectivefor shipping bulk products, piggyback
Truck
Flexible in routing & time schedules, efficientfor short-hauls of high value goodsWater
Low cost for shipping bulky, low-value,non perishable goods, slowest form
PipelineShip petroleum, natural gas, and chemicals
from sources to markets
AirHigh cost, ideal when speed is needed or
distance markets have to be reached
Transportation Modes
-
8/13/2019 Unit IV Logistics Management Promotion
21/23
21
1. Speed2. Dependability
3. Availability
4. Costs
5. Others
Checklist for ChoosingTransportation Modes
Choosing Transportation
Modes
Third party logistics
-
8/13/2019 Unit IV Logistics Management Promotion
22/23
22
Concept Recognizes that Providing Better CustomerService and Trimming Distribution Costs Requires
Teamwork, Both Inside the Company and Among All theMarketing Channel Organizations.
Cross-Functional Teamwork inside the Company
Building Channel Partnerships
Third-Party Logistics
Integrated Logistics
Management
Many companies are
now outsourcing
logistics tasks to
companies like
Ryder Integrated
Logistics.
li .
-
8/13/2019 Unit IV Logistics Management Promotion
23/23
23
Review of Concept
ConnectionsExplain why companies use distribution channelsand discuss thee functions these channelsperform.
Discuss how channel members interact and howthey organize to perform the work of the channel.
Identify the major channel alternatives open to a
company.Discuss the nature and importance of physicaldistribution.
Analyze integrated logistics, including how it may
be achieved and its benefits to the company