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pf3e_ppt_ch14
Course: MGMT 322, Fall 2008School: New Mexico
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of Pride/Ferrell Foundations Marketing Third Edition Chapter 14: Marketing Channels and Supply-Chain Management Outline 141 KeyTerm Part 7 Distribution Decisions Chapter 14 Marketing Channels and Supply-Chain Management Outline Copyright Houghton Mifflin Company. All rights reserved. 142 KeyTerm Objectives Describe the nature and functions of marketing channels. Identify the types of marketing...
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of Pride/Ferrell
Foundations Marketing
Third Edition Chapter 14:
Marketing Channels and Supply-Chain Management
Outline
141
KeyTerm
Part 7 Distribution Decisions
Chapter 14 Marketing Channels and Supply-Chain Management
Outline
Copyright Houghton Mifflin Company. All rights reserved. 142
KeyTerm
Objectives
Describe the nature and functions of marketing channels. Identify the types of marketing channels. Explore the concepts of leadership, cooperation, and conflict in channel relationships. Recognize common strategies for integrating marketing channels. Examine the major levels of marketing coverage. Recognize the importance of the role of physical distribution activities in supply-chain management and overall marketing strategies. Examine the major physical distribution functions of order processing, inventory management, materials handling, warehousing, and transportation.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 143
KeyTerm
Outline
MarketingChannelsforConsumerProdcuts MarketingChannelsforBusinessProducts MultipleMarketingChannels SelectingMarketingChannels Leadership,CooperationandConflict IntensityofMarketingCoverage
MarketingChannelsandSupplyChainManagemen
PhysicalDistributioninSupplyChainManagement
1. Transportation
Outline
Copyright Houghton Mifflin Company. All rights reserved. 144
KeyTerm
Key Terms
channel power cycle time distribution freight forwarders JIT
physical distribution vertical channel in
marketing channelprivate warehouses horizontal channel integration marketing intermediary warehouses public
vertical marketing
distribution centers industrial distributor materials handlingselective distributionwarehousing dual distribution intensive distribution megacarriers EDI intermodal transportation strategic channel alliance
order processing supply-chain management transportation
Outline
exclusive distribution inventory management outsourcing
KeyTerm
Copyright Houghton Mifflin Company. All rights reserved.
145
1. MARKETING CHANNELS AND SUPPLY-CHAIN MANAGEMENT Distribution
Activities involved in making products available to
Marketing Channel
customers when and where they want to purchase them.
Marketing Intermediary
Supply Chain Management
Outline
Copyright Houghton Mifflin Company. All rights reserved. 146
KeyTerm
Marketing Channels Consist of Intermediaries
Marketing Intermediary
An intermediary linking producers to other
intermediaries or to ultimate consumers through contractual arrangements or through the purchase and resale of products Direct Channel Indirect Channel Customer
Producer
Producer
Intermediary
Customer
Outline
KeyTerm
Copyright Houghton Mifflin Company. All rights reserved.
147
Some marketing channels go directly from the producer to the customer
Used By Permission.
Outline
148
KeyTerm
Copyright Houghton Mifflin Company. All rights reserved.
Marketing Channels Form a Supply Chain
Supply-Chain Management
Long-term partnerships
among marketing channel members that reduce inefficiencies, costs, and redundancies and develop innovative approaches to satisfy customers Optimizes costs through partnerships
Used By Permission.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 149
KeyTerm
Key Tasks in Supply-Chain Management
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1410
KeyTerm
Significance of Marketing Channels
Create utility
Time Place Possession Form
Facilitate exchange efficiencies
Figure 14.1 Outline
Copyright Houghton Mifflin Company. All rights reserved. 1411
KeyTerm
Typical Marketing Channels for Consumer Products
Figure 14.2 Outline
Copyright Houghton Mifflin Company. All rights reserved. 1412
KeyTerm
Passing goods from producer to retailer to customer is a common channel for consumer products
Used By Permission.
Outline
1413
KeyTerm
Copyright Houghton Mifflin Company. All rights reserved.
Wholesalers
Elimination of Wholesalers
=
Functions Must Still Be Performed
Reduction of Price to Consumer
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1414
KeyTerm
Typical Marketing Channels for Business Products
Figure 14.3 Outline
Copyright Houghton Mifflin Company. All rights reserved. 1415
KeyTerm
Distribution Intermediaries
Industrial Distributor
An independent business that takes title to business
products and carries inventories
Manufacturers Agent
An independent businessperson who sells, on
commission, the complementary products of several producers; does not takes title to or hold inventories.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1416
KeyTerm
Multiple Marketing Channels and Channel Alliances Dual Distribution
The use of two or more
channels to distribute the same product to the same target market
Strategic Channel Alliance
The products of one
organization are distributed through the marketing channels of another
Used By Permission.
Select food, like Pria, is marketed through multiple channels Outline
Copyright Houghton Mifflin Company. All rights reserved. 1417
KeyTerm
Selecting Marketing Channels
Figure 14.3 Outline
Copyright Houghton Mifflin Company. All rights reserved. 1418
KeyTerm
Channel Leadership, Cooperation, and Conflict
Channel Captain
A dominant member (producer, wholesaler, or
retailer) of a marketing channel or supply chain Establishes channel policies and coordinates development of the marketing mix
Channel Power
The ability of one channel member to influence
another members goal achievement
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1419
KeyTerm
Channel Conflict
Sources of Channel Conflict
Disagreements among arising channel members Communication difficulties jeopardizing coordination Increased use of multiple distribution channels by
manufacturers creating conflicts with distributors and retailers Intermediaries diversifying into and offering competing products Producers attempting to circumvent intermediaries and dealing directly with retailers
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1420
KeyTerm
Channel Cooperation
Improving Cooperation
Unifying channel to
maintain market order Agreeing to direct efforts toward common objectives Precisely defining each channel members tasks
Channel members recognize that cooperation can lead to channel success.
Used By Permission.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1421
KeyTerm
Channel Integration
Vertical Channel Integration
Two or more stages of the marketing channel are
under one management. Channel members coordinate their efforts to reach a target market.
Horizontal Integration
Organizations at the same level of operation are
combined under one management.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1422
KeyTerm
Vertical Marketing System (VMS)
A marketing channel managed by a single channel member to achieve efficient, lowcost distribution
Corporate VMS Administered VMS Contractual VMS
Used By Permission.
Outline
KeyTerm
Copyright Houghton Mifflin Company. All rights reserved.
1423
Intensity of Market Coverage
Intensive Distribution Selective Distribution Exclusive Distribution
Marvin Windows and Doors available at selective outlets.
Used By Permission.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1424
KeyTerm
Green Design Furniture is marketed through exclusive distribution
Used By Permission.
Outline
1425
KeyTerm
Copyright Houghton Mifflin Company. All rights reserved.
2. PHYSICAL DISTRIBUTION IN SUPPLY-CHAIN MANAGEMENT Physical Distribution (Logistics)
Activities used to move products from producers to
consumers and other end users Order processing Inventory management Material handling Warehousing Transportation
Outsourcing
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1426
KeyTerm
Goal Of Physical Distribution
Right Goods Right Place Right Time Right Quantity Right Support Services Meeting Customer Service Standards Reducing Distribution Costs Reducing Cycle Time
Page 360
Used By Permission.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1427
KeyTerm
Proportional Cost of each Physical Distribution Function as a Percentage of Total Distribution Costs
Figure 14.5
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1428
KeyTerm
Order Processing
The receipt and transmission of sales order information
Order entry Order handling Order delivery
Electronic Data Interchange (EDI)
A computerized means of integrating order
processing with production, inventory, accounting, and transportation
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1429
KeyTerm
Many organizations provide hardware and software to make order processing more accurate and efficient
Used By Permission.
Outline
Copyright Houghton Mifflin Company. All rights reserved. 1430
KeyTerm
Inventory Management
Developing and maintaining adequate assortments of products to meet customers needs Determining When To...
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