Marketing: An Introduction Marketing Channels and Supply Chain Management •Chapter Eleven •Lecture Slides –Express Version •Course •Professor •Date
Dec 27, 2015
Mar
keti
ng
: A
n In
tro
du
ctio
nMarketing Channels and
Supply Chain Management
•Chapter Eleven•Lecture Slides
–Express Version
•Course•Professor•Date
©Copyright 2004, Pearson Education Canada Inc.11-2
Mar
keti
ng
: A
n In
tro
du
ctio
nLooking Ahead
• After studying this chapter you should be able to:
• Explain why companies use distribution channels and discuss the functions these channels perform
• Discuss how channel members interact and how they organize to perform the work of the channel
• Identify the major channel alternatives open to a company
• Explain how companies select, motivate, and evaluate channel members
• Discuss the nature and importance of marketing logistics and integrated supply chain management
©Copyright 2004, Pearson Education Canada Inc.11-3
Mar
keti
ng
: A
n In
tro
du
ctio
nThe Concept of Contactual Efficiency
Mfg Mfg Mfg Mfg
Mfg Mfg Mfg Mfg
Cus Cus Cus Cus Cus Cus Cus Cus
W/S Dist
Figure 11-1
©Copyright 2004, Pearson Education Canada Inc.11-4
Mar
keti
ng
: A
n In
tro
du
ctio
nDistribution Channel Functions
• Why use marketing intermediaries?– Contacts, experience, specialization, and scale
of operations• Objective:
– Provide place, time, and possession utility demanded by customers
• Functions performed:– Information– Promotion– Contact– Matching– Negotiation– Physical distribution– Financing– Risk taking
©Copyright 2004, Pearson Education Canada Inc.11-5
Mar
keti
ng
: A
n In
tro
du
ctio
nConsumer Marketing Channels
Figure 11-2
Manufacturer Wholesaler Jobber Retailer Consumer
Manufacturer Wholesaler Retailer Consumer
Manufacturer Retailer Consumer
Manufacturer Consumer
©Copyright 2004, Pearson Education Canada Inc.11-6
Mar
keti
ng
: A
n In
tro
du
ctio
nBusiness Marketing Channels
Figure 11-2
ManufacturerIndustrialdistributor
IndustrialConsumer
ManufacturerMfg Sales
RepresentativeOr Sales Branch
IndustrialConsumer
ManufacturerIndustrialConsumer
ManufacturerIndustrialConsumer
Industrialdistributor
Mfg SalesRepresentative
Or Sales Branch
©Copyright 2004, Pearson Education Canada Inc.11-7
Mar
keti
ng
: A
n In
tro
du
ctio
nChannel Behaviour
• Channel conflict:– Disagreement between channel members
over goals and roles, who should do what and for what rewards
• Horizontal conflict:– Conflict between firms on the same level
• Vertical conflict:– Conflict between firms on different levels
• Disintermediation:– Displacement of a traditional member from the
marketing channel– Selling direct via the Internet
©Copyright 2004, Pearson Education Canada Inc.11-8
Mar
keti
ng
: A
n In
tro
du
ctio
nTypes of Marketing Systems
• Conventional distribution channel:– Channel members are independently owned– Pursue their own corporate objectives– Conflict may occur when goals differ
• Vertical marketing system:– Channel members act as a unified system– May have common ownership– May contract for this arrangement– May be forced into arrangement by power
differential between members– Franchise systems are the most popular
• Horizontal marketing systems– Two or more companies on the same level join
together for mutual gain– Airline alliances
©Copyright 2004, Pearson Education Canada Inc.11-9
Mar
keti
ng
: A
n In
tro
du
ctio
nHybrid Marketing Channel
Consumersegment 1
Businesssegment 1
Consumersegment 2
Businesssegment 2
RetailersDealers
Distributors
Producer
CataloguetelephoneInternet
Salesforce
Figure 11-4
©Copyright 2004, Pearson Education Canada Inc.11-10
Mar
keti
ng
: A
n In
tro
du
ctio
nChannel Design Decisions
• Analyzing consumer service needs• Setting channel objectives and constraints• Identifying major alternatives
– Types of intermediaries• Company sales force• Manufacturer’s agency• Industrial distributors
– Number of intermediaries• Intensive distribution• Selective distribution• Exclusive distribution
– Responsibilities of channel members• Evaluating the major alternatives• International distribution channels
©Copyright 2004, Pearson Education Canada Inc.11-11
Mar
keti
ng
: A
n In
tro
du
ctio
nChannel Management Decisions
• Selection– Select those who best fit the channel objectives– Degree of selectivity will vary with intensity used
• Motivation– Maintain strong partnerships– Reward those intermediaries who perform well – Assist or replace weaker ones
• Evaluating– Compare member performance against standards– Use market share, performance against objectives, or
qualitative measurements
©Copyright 2004, Pearson Education Canada Inc.11-12
Mar
keti
ng
: A
n In
tro
du
ctio
nMarketing Logistics
• Marketing logistics– Physical distribution of the products– Logistics is a cost of doing business, not a revenue
generator– Logistics has a direct impact on customer satisfaction– Marketing logistics addresses outbound distribution
and inbound
• Supply chain management– Managing value-added flows between suppliers, the
company, resellers, and final users
• Goal of logistics:– Provide targeted level of customer service for the
least cost
©Copyright 2004, Pearson Education Canada Inc.11-13
Mar
keti
ng
: A
n In
tro
du
ctio
nMajor Logistics Functions
• Order processing• Warehousing• Inventory management• Transportation
• Integrated supply chain management– Cross-functional teamwork within the company– Building channel partnerships– Third-party logistics (3PL) providers