Lesson 9: Marketing Channels Delivering Customer Value Chapter 12 – Marketing Channels: Delivering Customer Value 1 define supply chain and value delivery network. (textbook, pp. 398–399) Supply Chain Management – managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers. The supply chain consists of upstream and downstream partners. Upstream from the company is the set of firms that supplies the raw materials, components, parts, information, finances, and expertise needed to create a product or service. Downstream marketing channel partners, such as wholesalers and retailers, form a vital connection between the firm and its customers. Supply chain suggests a make-and-sell view of the business whereas is should be more demand chain because it suggests a sense-and-respond view of the market. Under this view, planning starts by identifying the needs of target customers. Value delivery network – made up of the company, suppliers, distributors, and ultimately, customers who partner with each other to improve the performance of the entire system. 2 explain why organizations use distribution channels, and describe the functions these channels serve. (textbook, pp. 399–402) Marketing channel (or distribution channel) – a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. Producers use intermediates because they create greater efficiency in making goods available to target markets. Through their contacts, experience, specialization and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. Intermediaries play an important role in matching supply and demand. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who use them. Members of the marketing channel perform many key functions: - Information - Promotion - Contact - Matching - Negotiation - Physical distribution - Financing
- Risk taking The question is not whether these functions need to be performed – but rather who will perform them. Number of Channel levels Channel level - Each layer of marketing intermediaries that performs some work in bringing the product and its closer to the final buyer. The number of intermediary levels indicates length of a channel Direct Marketing Channel (Channel 1) – has no intermediary levels; the company sells directly to consumers Indirect Marketing Channel – contains one or more intermediaries From a producers level , a greater number of levels means less control and
You've reached the end of your free preview.
Want to read all 6 pages?