MANAGING MARKETING CHANNELS AND SUPPLY CHAINS CHAPTER
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MANAGING MARKETING
CHANNELS AND SUPPLY CHAINS
CHAPTER
What is a Marketing Channel?
A set of interdependent organizations that ease the transfer of ownership as
products move from producer to business user or consumer.
A set of interdependent organizations that ease the transfer of ownership as
products move from producer to business user or consumer.
RetailerRetailer
WholesalerWholesaler
Agents andBrokers
Agents andBrokers
A channel intermediary that sells mainly to customers.
A channel intermediary that sells mainly to customers.
An institution that buys goods from manufacturers, takes title
to goods, stores them, and resells and ships them.
An institution that buys goods from manufacturers, takes title
to goods, stores them, and resells and ships them.
Wholesaling intermediaries who facilitate the sale of a product by representing channel member.
Wholesaling intermediaries who facilitate the sale of a product by representing channel member.
Names for Marketing Intermediaries
Specialization andDivision of Labor
Specialization andDivision of Labor
ThreeMain
Functions
ThreeMain
Functions Overcoming
DiscrepanciesOvercoming
Discrepancies
Providing ContactEfficiency
Providing ContactEfficiency
JOB OF INTERMEMDIARIES
• Provides efficiency and cost savings
• Attains economies of scale
• Aids producers who lack resources to market directly
• Builds good relationships with customers
SPECIALIZATION AND DIVISION OF LABOR
Discrepancyof
Quantity
Discrepancyof
Quantity
Discrepancyof
Assortment
Discrepancyof
Assortment
The difference between the amount of product produced and the amount an end user wants to buy.
The difference between the amount of product produced and the amount an end user wants to buy.
The lack of all the items a customer needs to receive full satisfaction from a product or products.
The lack of all the items a customer needs to receive full satisfaction from a product or products.
OVERCOMING DISCREPANCIES
TemporalDiscrepancy
TemporalDiscrepancy
SpatialDiscrepancy
SpatialDiscrepancy
A situation that occurs when a product is produced but a
customer is not ready to buy it.
A situation that occurs when a product is produced but a
customer is not ready to buy it.
The difference between the location of a producer and the
location of widely scattered markets.
The difference between the location of a producer and the
location of widely scattered markets.
OVERCOMING DISCREPANCIES
Contact Efficiency
RetailersRetailersRetailersRetailers
Merchant Merchant WholesalersWholesalersMerchant Merchant
WholesalersWholesalers
Agents Agents andand
BrokersBrokers
Agents Agents andand
BrokersBrokers
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
CHANNEL INTERMEMDIARIES
CHANNELS FOR CONSUMER PRODUCTS
DIRECT RESELLER WHOLESALER AGENT
Producer Producer Producer Producer
Producer FactorsProducer Factors
Product FactorsProduct Factors
Market FactorsMarket Factors
Factors Factors Affecting Affecting Channel Channel ChoiceChoice
Factors Factors Affecting Affecting Channel Channel ChoiceChoice
Exclusive DistributionExclusive Distribution
Selective DistributionSelective Distribution
Intensive DistributionIntensive Distribution
Level ofLevel ofDistributionDistribution
IntensityIntensity
Level ofLevel ofDistributionDistribution
IntensityIntensity
What makes you choose a particular channel?
Market FactorsMarket FactorsThat Affect That Affect
ChannelChannelChoicesChoices
Market FactorsMarket FactorsThat Affect That Affect
ChannelChannelChoicesChoices
Customer ProfilesCustomer Profiles
Consumer or IndustrialCustomer
Consumer or IndustrialCustomer
Size of MarketSize of Market
Geographic Location
MARKET FACTORS
Product FactorsProduct FactorsThat Affect That Affect
ChannelChannelChoicesChoices
Product FactorsProduct FactorsThat Affect That Affect
ChannelChannelChoicesChoices
Product Complexity Product Complexity
Product PriceProduct Price
Product Life CycleProduct Life Cycle
Product DelicacyProduct Delicacy
PRODUCT FACTORS
Producer FactorsProducer FactorsThat Affect That Affect
ChannelChannelChoicesChoices
Producer FactorsProducer FactorsThat Affect That Affect
ChannelChannelChoicesChoices
Producer Resources Producer Resources
Number of Product LinesNumber of Product Lines
Desire for Channel ControlDesire for Channel Control
PRODUCER FACTORS
Intensity LevelIntensity LevelIntensity LevelIntensity Level ObjectiveObjectiveObjectiveObjective Number of Number of IntermediariesIntermediaries
Number of Number of IntermediariesIntermediaries
IntensiveIntensive
SelectiveSelective
ExclusiveExclusive
Achieve mass marketselling.
Convenience goods.
Achieve mass marketselling.
Convenience goods.
Work with selected intermediaries.
Shopping and some specialty goods.
Work with selected intermediaries.
Shopping and some specialty goods.
Work with singleintermediary. Specialty
goods and industrial equipment.
Work with singleintermediary. Specialty
goods and industrial equipment.
ManyMany
SeveralSeveral
OneOne
LEVELS OF DISTRIBUTION INTENSITY
LEVELS OF DISTRIBUTION INTENSITY
CostCost
Transit TimeTransit Time
ReliabilityReliability
CapabilityCapability
AccessibilityAccessibility
TraceabilityTraceability
Criteria Criteria forfor
Transportation Transportation ModeMode
ChoiceChoice
Criteria Criteria forfor
Transportation Transportation ModeMode
ChoiceChoice
TRANSPORTATION FACTORS
Advantages and disadvantages of five modes of transportation
VERTICAL INTEGRATION
Backward an Forward Integration –buy the step before or after you in the chain
The degree to which a firm owns the stages
of its supply chain management from materials supply- to manufacture -to distribution- to sale.
HORIZONTAL INTEGRATION
When a company takes over another in the same business, thus eliminating a competitor and achieving a bigger market share
For example - Whole Foods buys Wild Oats to gain a bigger share of the health food market
Problem is monopoly creation, so govts watch these sales closely
Mitsubishi Dealership
Mazda Dealership
NissanDealership
ToyotaDealership
HondaDealership
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