Undergraduate CHANNELS and LOGISTICS

Undergraduate CHANNELS and LOGISTICS - Value Chains:...

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Unformatted text preview: Value Chains: Channels of Distribution Management, Logistics, Retailing and Wholesaling I am the world's worst salesman, therefore I must make it easy for people to buy. F. W. Woolworth Value Chains Organizations today recognize that success depends on adding value to customers. Delivering value to the customer is ultimately what matters. So, effort must be expended to create a set of institutions and processes that will yield the desired level of value to customers. Right to left thinking. Marketing Marketing Vendor Vendor Sales Sales Organization Organization Order Order Processing Processing Delivery Delivery Company Company Service Service Company Company Product Product Design Design Laboratory Laboratory Production Production Planning Planning Consultant Consultant Production Production Company Company P r o d u c t s Customer Customer Raw Materials Raw Materials Supplier Supplier Value Chains and R-t-L Thinking The Challenge of Value Chains All the effort among the organizations in a value chain must be coordinated, so that the output desired by all institutions is created simultaneously. Generally, this coordination involves sharing resources and information. We look here at channels of distribution, logistics, wholesaling and retailing, realizing that the requirements today have changed. Channels of Distribution the set of institutions that move a product from production to consumption. Generally we're talking about manufacturers, wholesalers, distributors, jobbers and retailers. Channels determine the efficiency and effectiveness with which products go from manufacturers to consumers. Justification for Intermediaries Intermediaries are used because of their greater efficiency in making goods available to target markets. Intermediaries generally reduce the amount of work involved in connecting suppliers with customers. Intermediaries help transform the product assortments that producers want to make, into the assortments that consumers want to buy--time utility, place utility and possession utility. Closing the Gaps Intermediaries close the gaps between consumers and manufacturers in: Buying/Selling Storage Transportation Market Information Financing Assortment Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Consumer Consumer Consumer Consumer 20 Contacts Required Without An Intermediary Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Consumer Consumer Consumer Consumer Only 9 Contacts Required With An Intermediary Intermediary Alternative Distribution Channels...
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Undergraduate CHANNELS and LOGISTICS - Value Chains:...

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