marketing chapter 26

marketing chapter 26 - Chapter 10 Marketing Channels and...

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Chapter 10 Marketing Channels and Supply Chain Management Previewing the Concepts: Chapter Objectives 1. Explain why companies use distribution channels and discuss the functions these channels perform. 2. Discuss how channel members interact and how they organize to perform the work of the channel. 3. Identify the major channel alternatives open to a company. 4. Explain how companies select, motivate, and evaluate channel members. 5. Discuss the nature and importance of marketing logistics and integrated supply chain management. J UST THE B ASICS Chapter Overview This chapter covers the important topic of supply chain management. Supply chains consist of both upstream and downstream partners, including suppliers, intermediaries, and even intermediary customers. The term value delivery network expands on the limited nature of “supply chain.” It consists of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system. The chapter focuses on marketing channels—the downstream side of the value delivery network. A company’s channel decisions directly affect every other marketing decision. And because distribution channel decisions often involve long-term commitments to other firms, management must define its channels carefully, with an eye on tomorrow’s likely selling environment as well as today’s. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them. Members of the marketing channel perform many key functions, such as gathering and distributing marketing information; promoting products; contacting prospective buyers; matching supply with demand; negotiating final prices; and performing the physical distribution of the goods, financing large purchases, and taking the risk of selling the product. For channels to work properly, each channel member’s role must be specified and conflict must be managed. Conventional distribution systems typically lacked a strong leader; vertical marketing systems (VMS) have evolved to provide that channel leadership. The three major types of VMSs include corporate, contractual, and administered. 226
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In designing marketing channels, managers must analyze customer needs, set channel objectives, identify major channel alternatives, and then evaluate those alternatives. In designing international channels, marketers will face additional complexities. Each country has its own unique distribution system that has evolved over time and changes very slowly. Marketing logistics, also called physical distribution, involves planning, implementing and controlling the physical flow of goods, services, and other related information from points of origin to points of consumption. It involves getting the right product to the right customer in the right place at the right time. Marketing logistics addresses not only outbound distribution, but also inbound and reverse distribution. The major logistics
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This note was uploaded on 03/24/2012 for the course ECON 201 taught by Professor Kovak during the Winter '09 term at Air Force Academy.

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marketing chapter 26 - Chapter 10 Marketing Channels and...

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