Vertical Marketing Members act as a unified system three times administered

Vertical marketing members act as a unified system

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manufacturer…retailers…wholesaler…consumer, attempt to satisfy their own objectives and maximize their profits often at the expense of others. Vertical Marketing: Members act as a unified system, three times: administered, contractual or corporate. Reduce conflict. “Answer: Firms work together, ownership may overlap, long-term, unified” Types of Vertical Marketing Systems: Administered Vertical marketing system : there is no common ownership or contractual relationships, but the dominant channel member controls or holds the balance of power. “because of its size Contractual vertical marketing system : different levels of the marketing channel join through contracts to obtain economies of scale and coordination and to reduce conflict. Ex . Franchise Corporate vertical marketing system : the parent company has complete control and can dictate the priorities and objectives of the marketing channel because it owns multiple segments. Power: in a marketing channel exists when one firm has the means or ability to dictate the actions of another member at a different level of distribution. Strategic relationship: Open communication , common goals , interdependence , credible commitments , mutual trust Electronic Data Interchange [EDI]: the computer to computer exchange of business documents from retailer to a vendor. Vendors can transmit info about on-hand inventory status. Cycle time ( the time between the decision to place an order and the receipt of the merchandise) , Easily analyzed and used , Quality of communication. “Flora is frustrated with her company’s” “Answer: promotion” “After installing” Vendor Managed inventory (VMI): t he manufacturer is responsible for maintaining the retailer’s inventory levels in each of its stores. Pull and Push Supply Chain: Pull - Orders based on sales data, more accurate inventory, better when demand is uncertain (Seasonal items). More sophisticated and more efficient. “Answer: order for merchandise are generated at the store level on sales data captured at POS terminals. Push- Merchandise allocated based on forecast, does not need sophisticated IS system, good for steady demand items (milk, eggs) In bound transportation: Planner: employees responsible for financial planning and analysis of merchandise and its allocation in stores. Dispatcher coordinates deliveries, manufacturer may pay transportation expenses or retailers may negotiate directly with trucking companies and pay expenses. Buyers and planners are much more involved in coordinating the physical flow of merchandise in stores. ( Bottom Left Pic) Receiving & Checking: Receiving (Arrival receipt) Checking ( undamaged, ordered received) “Ted is glad his company finally converted” ADN: tells the distribution center what should be in each carton. Radio Frequency Distribution RFID has the potential of tracking merchandise throughout the supply chain. Items wouldn’t have to be physically checked. A distribution center or a store could know exactly where and how many of an item it has because each item has an RFID tag. Tiny computer chips. Automatically transmit info.
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  • Spring '08
  • Kimbrough
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