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Marketing Channels and Supply Chain Management

Marketing Channels and Supply Chain Management. 12. chapter. Prepared by Deborah Baker Texas Christian University. Learning Objectives. 1. Explain what a marketing channel is and why intermediaries are needed.

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Marketing Channels and Supply Chain Management

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  1. Marketing Channels andSupply Chain Management 12 chapter Prepared by Deborah Baker Texas Christian University Chapter 12 Version 6e

  2. Learning Objectives 1. Explain what a marketing channel is and why intermediaries are needed. 2. Define the types of channel intermediaries and describe their functions and activities. 12 chapter Chapter 12 Version 6e

  3. Learning Objectives (continued) 3. Describe the channel structures for consumer and business-to-business products and discuss alternative channel arrangements. 4. Define supply chain management and discuss its benefits. 5. Discuss the issues that influence channel strategy. 12 chapter Chapter 12 Version 6e

  4. Learning Objectives (continued) 6. Explain channel leadership, conflict, and partnering. 7. Describe the logistical components of the supply chain. 8. Discuss the concept of balancing logistics service and cost. 12 chapter Chapter 12 Version 6e

  5. Learning Objectives (continued) 9. Discuss new technology and emerging trends in supply chain management. 10. Discuss channels and distribution decisions in global markets. 11. Identify the special problems and opportunities associated with distribution in service organizations. 12 chapter Chapter 12 Version 6e

  6. 1 Learning Objective Explain what a marketing channel is and why intermediaries are needed. Chapter 12 Version 6e

  7. Marketing Channel A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer. Supply Chain The connected chain of all the business entities, both internal and external to the company, that perform or support the logistics function. 1 Marketing Channels Chapter 12 Version 6e

  8. Specialization and Division of Labor Channels Fulfill Three Important Functions Overcoming Discrepancies Providing Contact Efficiency 1 Marketing Channel Functions Chapter 12 Version 6e

  9. 1 Specialization and Division of Labor • Provides economies of scale • Aids producers who lack resources to market directly • Builds good relationships with customers Chapter 12 Version 6e

  10. Discrepancy of Quantity The difference between the amount of product produced and the amount an end user wants to buy. Discrepancy of Assortment The lack of all the items a customer needs to receive full satisfaction from a product or products. 1 Overcoming Discrepancies Chapter 12 Version 6e

  11. Temporal Discrepancy A situation that occurs when a product is produced but a customer is not ready to buy it. Spatial Discrepancy The difference between the location of a producer and the location of widely scattered markets. 1 Overcoming Discrepancies Chapter 12 Version 6e

  12. Zenith Sony RCA Toshiba Zenith Sony RCA Toshiba Circuit City 1 Contact Efficiency Chapter 12 Version 6e

  13. 2 Learning Objective Define the types of channel intermediaries and describe their functions and activities. Chapter 12 Version 6e

  14. Retailer A channel intermediary that sells mainly to customers. Merchant Wholesaler An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them. Agents and Brokers Wholesaling intermediaries who facilitate the sale of a product by representing channel member. 2 Channel Intermediaries Chapter 12 Version 6e

  15. Retailers Take Title to Goods Merchant Wholesalers Take Title to Goods Agents and Brokers Do NOT Take Title to Goods 2 Channel Intermediaries Chapter 12 Version 6e

  16. Contacting/Promotion TransactionalFunctions Negotiating Risk Taking Physically distributing Logistical Functions Storing Sorting FacilitatingFunction Researching Financing 2 Channel Functions Performed by Intermediaries Chapter 12 Version 6e

  17. 2 Logistics The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption. Chapter 12 Version 6e

  18. 3 Learning Objective Describe the channel structures for consumer and business-to-business products and discuss alternative channel arrangements. Chapter 12 Version 6e

  19. 3 Direct Channel A distribution channel in which producers sell directly to consumers. Chapter 12 Version 6e

  20. Retailer Channel Wholesaler Channel Direct Channel Agent/Broker Channel Producer Producer Producer Producer Agents orBrokers Wholesalers Wholesalers Retailers Retailers Retailers Consumers Consumers Consumers Consumers 3 Channels for Consumer Products Chapter 12 Version 6e

  21. IndustrialDistributor Agent/Broker Channel Direct Channel Direct Channel Agent/Broker IndustrialChannel Producer Producer Producer Producer Producer Agents or Brokers Agents or Brokers IndustrialDistributor IndustrialDistributor IndustrialUser IndustrialUser IndustrialUser IndustrialUser GovernmentBuyer 3 Channels for Business-to-Business Products Chapter 12 Version 6e

  22. Multiple Channels NontraditionalChannels DifferentChannelsMay be Used Adaptive Channels Strategic ChannelAlliances 3 Alternative Channel Arrangements Chapter 12 Version 6e

  23. 4 Learning Objective Define supply chain management and discuss its benefits. Chapter 12 Version 6e

  24. 4 Supply Chain Management A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption. Chapter 12 Version 6e

  25. 4 Supply Chain Management Results of Supply Chain Management Focus on Innovative Solutions Competitive with focus on Customer Satisfaction Synchronized Flow Customer Value Chapter 12 Version 6e

  26. Communicator of customer demand from point of sale to supplier Role of Supply Chain Management Physical flow process that engineers the movement of goods 4 Role of Supply Chain Management Chapter 12 Version 6e

  27. Determine channel strategy and level of distribution intensity Manage relationships in the supply chain Manage the logistical components of the supply chain Balance the costs of the supply chain with the service level demanded by customer 4 Supply Chain Management Activities Chapter 12 Version 6e

  28. Common Benefitsof Supply Chain Management Reduced Costs Improved Service Enhanced Revenues 4 Benefits of Supply Chain Management Chapter 12 Version 6e

  29. 5 Learning Objective Discuss the issues that influence channel strategy. Chapter 12 Version 6e

  30. Issues that InfluenceChannel Strategy Factors Affecting Channel Choice Levels ofDistributionIntensity Market Factors Intensive Distribution Product Factors Selective Distribution Producer Factors Exclusive Distribution 5 Channel Strategy Decisions Chapter 12 Version 6e

  31. Customer Profiles Consumer or Industrial Customer Size of Market 5 Market Factors Market FactorsThat Affect ChannelChoices Geographic Location Chapter 12 Version 6e

  32. Product FactorsThat Affect ChannelChoices Product Complexity Product Price Product Life Cycle Product Delicacy 5 Product Factors Chapter 12 Version 6e

  33. Producer FactorsThat Affect ChannelChoices Producer Resources Number of Product Lines Desire for Channel Control 5 Producer Factors Chapter 12 Version 6e

  34. Intensity Level Objective Number of Intermediaries Intensive Achieve mass marketselling. Convenience goods. Many Work with selected intermediaries. Shopping and some specialty goods. Several Selective Exclusive Work with singleintermediary. Specialty goods and industrial equipment. One 5 Levels of Distribution Intensity Chapter 12 Version 6e

  35. 6 Learning Objective Explain channel leadership, conflict, and partnering. Chapter 12 Version 6e

  36. Channel Power Social Dimensions of Channels Channel Control Channel Leadership Channel Conflict Channel Partnering 6 Managing Channel Relationships Chapter 12 Version 6e

  37. Channel Power A channel member’s capacity to control or influence the behavior of other channel members Channel Control A situation that occurs when one marketing channel member intentionally affects another member’s behavior. Channel Leader A member of a marketing channel that exercises authority/power over the activities of other members. 6 Channel Power, Control, and Leadership Chapter 12 Version 6e

  38. Occurs among channel members on the same level Horizontal Conflict Vertical Conflict Occurs among channel members at different levels 6 Channel Conflict A clash of goals and methods between distribution channel members. Chapter 12 Version 6e

  39. 6 Channel Partnering The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage. Chapter 12 Version 6e

  40. Transaction-Based Partnership-Based Short-term relationships Long-term relationships Multiple suppliers Few suppliers Adversarial relationships Cooperative partnerships Price dominates Value-added services dominate Minimal supplier investment High supplier/buyer investment Minimal information sharing Extensive information sharing Firms are independent Firms are interdependent Minimal functional area interaction Extensive functionalarea interaction 6 Transaction- vs. Partnership-Based Firms Chapter 12 Version 6e

  41. 7 Learning Objective Describe the logistical components of the supply chain. Chapter 12 Version 6e

  42. Sourcing & Procurement Production Scheduling SupplyChainTeam Order Processing & Customer Service Logistics Information System Inventory Control Warehouse & Materials Handling Transportation 7 Integrated Logistical Components of the Supply Chain Chapter 12 Version 6e

  43. Plan Purchasing Strategies Role of Purchasing Departments Develop Specifications Select Suppliers Negotiate Price Negotiate Service Levels 7 Sourcing and Procurement Chapter 12 Version 6e

  44. Traditional Focus Customer Focus Push/Pull Strategy Push Pull Start of Production Inventory-Based Customer-Order Based Manufacturing Mass Production Mass Customization 7 Production Scheduling Chapter 12 Version 6e

  45. 7 Just-in-Time Manufacturing A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line. JIT Chapter 12 Version 6e

  46. 7 Benefits of JIT • Reduces raw material inventories • Shortens lead times • Creates better supplier relationships • Reduces production and storeroom costs • Reduces paperwork Chapter 12 Version 6e

  47. 7 Electronic Data Interchange Information technology that replaces paper documents that accompany business transactions. EDI Chapter 12 Version 6e

  48. 7 Inventory Control System A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand. Chapter 12 Version 6e

  49. Receive goods into warehouse Identify, sort and label goods Functions of Materials Handling Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment 7 Warehouse and Materials-Handling Chapter 12 Version 6e

  50. Criteria for Transportation Mode Choice Cost Transit Time Reliability Capability Accessibility Traceability 7 Transportation Chapter 12 Version 6e

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