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channel member and level add value for the customer. Companies should state their marketing channel objectives in terms of targetedlevels of customer service. The company’s channel objectives are also influenced by the nature of the company, its products, itsmarketing intermediaries, its competitors, and the environment. A firm should identify the types of channel members available to carryout its channel work.The producer and the intermediaries need to agree on the terms and responsibilities of each channel member.They should agree on price policies, conditions of sale, territory rights, and the specific services to be performed by each party.international marketers face many additional complexities in designing their channels. Each country has its own unique distributionsystem that has evolved over time and changes very slowly—so rather than change thechannel, international marketers usually adapttheir channel strategies to the existing structures within each country.LO6At the beginning of this chapter, we learned that the supply chain is the “upstream” part of any channel of distribution. The supplychain supplies the manufacturer with the parts and supplies it needs to be able to create products that it then sells “downstream”through its marketing channels to, eventually, its customers. The task of coordinating and controlling the physical flow of all thosesupplies and products—the logistics—is calledlogistics managementorsupply chain management. Logistics/supply chainmanagement is the planning, implementing, and controlling of the physical flow of materials, final goods, and related informationfrom points of origin to points of consumption to meet customer requirements at a profit. In short, it involves getting the right productto the right customer in the right place at the right time. Logistics management is also concerned with the management of inventory—the delicate balance between carrying too little inventory and carrying too much. Just in time -logistic systems- which only smallinventories of parts or merchandise are help, and new stock arrives just in time when needed. The logistics manager’s task is tocoordinate the activities of suppliers, purchasing agents, marketers, channel members, and customers. These activities includeforecasting, information systems, purchasing, production planning, order processing, inventory, warehousing, and transportationplanning. Production and consumption cycles rarely match, so most companies must store their goods while they wait to be sold-warehouses. Distribution centres are designed to move goods in and out, and to store them for as little time as possible.One of themost important technologies that has improved the ability to manage inventory is RFID, or radio frequency ID tags: tiny computer36
chips embedded in products/ product containers that allow scanners to track their movement without touching them. Some retailersand suppliers even set up vendor-managed inventory systems, sometimes calledcontinuous inventory replenishment systems. Thesesystems allow the supplier to keep track of what the retailer needs, and to generate orders and arrange deliveries. The choice of