topic nine: delivery the customer value. objectives work performed by marketing channels...
TRANSCRIPT
Objectives
• Work Performed by Marketing Channels• Channel-Design Decisions• Channel-Management Decisions• Channel Dynamics• Wholesale and retail
How a Distributor Reduces theNumber of Channel Transactions
= = CustomerCustomer= = ManufacturerManufacturer
A. Number of contacts A. Number of contacts without a distributorwithout a distributor
M x C = 3 X 3 = 9M x C = 3 X 3 = 9
11
3322
445566
778899
How a Distributor Reduces theNumber of Channel Transactions
= Distributor= Customer= Manufacturer
B. Number of contacts with a distributorM x C = 3 + 3 = 6
Store
1
2
3
4
5
6
Customers’ Desired Service Levels
• Lot size• Waiting time• Spatial convenience• Product variety• Service backup
Channel Management DecisionsChannel Management Decisions
SelectingSelecting
FE
ED
BA
CK
MotivatingMotivating
TrainingTraining
EvaluatingEvaluating
Types of Vertical Marketing SystemsTypes of Vertical Marketing Systems
CorporateCommon Ownership at Different
Levels of the Channel
CorporateCommon Ownership at Different
Levels of the Channel
ContractualContractual Agreement Among
Channel Members
ContractualContractual Agreement Among
Channel Members
AdministeredLeadership is Assumed by One or
a Few Dominant Members
AdministeredLeadership is Assumed by One or
a Few Dominant Members
Conventional Distribution Channel vs. Conventional Distribution Channel vs. Vertical Marketing SystemsVertical Marketing Systems
VerticalVerticalmarketingmarketingchannelchannel
Manufacturer
Retailer
ConventionalConventionalmarketingmarketingchannelchannel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wh
ole
sale
r
Causes of Channel Conflict
• Incompatibility• Difference in Perception• Dependence
Legal & Ethical Issues in Channel Legal & Ethical Issues in Channel RelationsRelations
Legal & Ethical Issues in Channel Legal & Ethical Issues in Channel RelationsRelations
Exclusive DealingExclusive Dealing Exclusive TerritoriesExclusive Territories Tying AgreementsTying Agreements Dealers’ RightsDealers’ Rights
Classification Of Retailer TypesClassification Of Retailer Types
Specialty StoresSpecialty Stores
Department StoresDepartment Stores
SupermarketsSupermarkets
Convenience StoresConvenience Stores
Off-Price RetailerOff-Price Retailer
SuperstoresSuperstores
Catalog ShowroomCatalog Showroom
Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items
Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items
Wide Variety of Food, Laundry, & Household ProductsWide Variety of Food, Laundry, & Household Products
Limited Line of High-Turnover Convenience GoodsLimited Line of High-Turnover Convenience Goods
Inexpensive, Overruns, Irregulars, and Leftover GoodsInexpensive, Overruns, Irregulars, and Leftover Goods
Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services
Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services
Broad Selection, Fast Turnover, Discount PricesBroad Selection, Fast Turnover, Discount Prices
Narrow Product Line, Deep AssortmentNarrow Product Line, Deep Assortment
Store Type Length and Breadth of Product Assortment
Discount StoresDiscount Stores Broad Product Line, Low Margin, High VolumeBroad Product Line, Low Margin, High Volume
Types of NonStore RetailingTypes of NonStore RetailingTypes of NonStore RetailingTypes of NonStore Retailing
Direct SellingDirect Selling
Direct MarketingDirect Marketing
Buying ServicesBuying Services
NonStore Retailing Accounts for More Than 12% of All Consumer Purchases, and is trending up.
Automatic VendingAutomatic Vending
Low PriceLow StatusLow Margin
Mid PriceMid StatusMid Margin
High PriceHigh StatusHigh Margin
Wheel of RetailingWheel of RetailingWheel of RetailingWheel of Retailing
WholesalerFunctions
ManagementServices & Advice
ManagementServices & Advice
Selling andPromoting
Selling andPromoting
MarketInformation
MarketInformation
Buying andAssortment Building
Buying andAssortment Building
Risk BearingRisk Bearing Bulk BreakingBulk Breaking
TransportingTransporting
FinancingFinancing WarehousingWarehousing
Why use wholesaler?
• Provide a Targeted Level of Customer Service at the Least Cost.
• Maximize Profits, Not Sales.Higher Distribution Costs/ Higher Customer Service Levels
Lower Distribution Costs/ Lower Customer Service Levels
Goals of the logistic system
InventoryWhen to orderHow much to orderJust-in-time
InventoryWhen to orderHow much to orderJust-in-time
CostsMinimize Costs ofAttaining LogisticsObjectives
CostsMinimize Costs ofAttaining LogisticsObjectives
WarehousingStorageDistribution
WarehousingStorageDistribution
Order ProcessingSubmittedProcessedShipped
Order ProcessingSubmittedProcessedShipped
Logistics
FunctionsTransportation Water, Truck, Rail, Pipeline & Air
Logistics Systems
RailNation’s largest carrier, cost-effective for shipping bulk products, piggyback
RailNation’s largest carrier, cost-effective for shipping bulk products, piggyback
TruckFlexible in routing & time schedules, efficient for short-hauls of high value goods
TruckFlexible in routing & time schedules, efficient for short-hauls of high value goods
WaterLow cost for shipping bulky, low-value goods, slowest form
WaterLow cost for shipping bulky, low-value goods, slowest form
PipelineShip petroleum, natural gas, and chemicalsfrom sources to markets
PipelineShip petroleum, natural gas, and chemicalsfrom sources to markets
Transportation Modes