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Chapter 13 Marketing Channels and Supply Chain Management Principles of Contemporary Marketing Kurtz & Boone.

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Presentation on theme: "Chapter 13 Marketing Channels and Supply Chain Management Principles of Contemporary Marketing Kurtz & Boone."— Presentation transcript:

1 Chapter 13 Marketing Channels and Supply Chain Management Principles of Contemporary Marketing Kurtz & Boone

2 CHAPTER 13 Marketing Channels and Supply Chain Management Chapter Objectives 1.Describe the types of marketing channels and the roles they play in marketing strategy. 2.Outline the major channel strategy decisions. 3.Describe the concepts of channel management, conflict, and cooperation. 4.Identify and describe the different vertical marketing systems. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

3 CHAPTER 13 Marketing Channels and Supply Chain Management Chapter Objectives 5.Explain the roles of logistics and supply chain management in an overall distribution strategy. 6.Identify the major components of a physical distribution system. 7.Compare the major modes of transportation. 8.Discuss the role of transportation intermediaries, combined transportation modes, and warehousing in improving physical distribution. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

4 CHAPTER 13 Marketing Channels and Supply Chain Management o Four functions of marketing channels: o Facilitating the exchange process by reducing the number of marketplace contacts necessary to make a sale o Adjusting for discrepancies in the market’s assortment of goods and services via sorting o Standardizing exchange transactions by setting expectations for products o Facilitating searches by both buyers and sellers The Role of Marketing Channels in Marketing Strategy Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

5 CHAPTER 13 Marketing Channels and Supply Chain Management o Direct channel - Carries goods directly from a producer to the business purchaser or ultimate user o Direct selling - Strategy designed to establish direct sales contact between producer and final user Direct Selling Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

6 CHAPTER 13 Marketing Channels and Supply Chain Management o Producer to wholesaler to retailer to consumer o Producer to wholesaler to business user o Producer to agent to wholesaler to retailer to consumer o Producer to agent to wholesaler to business user o Producer to agent to business user Channels Using Marketing Intermediaries Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

7 CHAPTER 13 Marketing Channels and Supply Chain Management o Dual distribution - Network that moves products to a firm’s target market through more than one marketing channel o Reverse channel - Channel designed to return goods to their producers Dual Distribution and Reverse Channels Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

8 CHAPTER 13 Marketing Channels and Supply Chain Management Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

9 CHAPTER 13 Marketing Channels and Supply Chain Management o Intensive distribution - Distribution of a product through all available channels o Selective distribution - Distribution of a product through a limited number of channels o Exclusive Distribution - Distribution of a product through a single wholesaler or retailer in a specific geographic region Determining Distribution Intensity Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

10 CHAPTER 13 Marketing Channels and Supply Chain Management o Horizontal conflict o Vertical conflict o The gray market Channel Conflict Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

11 CHAPTER 13 Marketing Channels and Supply Chain Management o Planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating various functions throughout the distribution chain o Rely on forward or backward integration o Forward integration - Firm attempts to control downstream distribution o Backward integration - Manufacturer attempts to gain greater control over inputs to production process Vertical Marketing Systems Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

12 CHAPTER 13 Marketing Channels and Supply Chain Management o Three categories of VMSs o Corporate systems o Administered systems o Contractual systems Vertical Marketing Systems Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

13 CHAPTER 13 Marketing Channels and Supply Chain Management Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

14 CHAPTER 13 Marketing Channels and Supply Chain Management o Technology that uses a tiny chip with identification information that can be read by a scanner using radio waves from a distance o Can be used to grant access to restricted areas or to speed delivery processing Radio Frequency Identification (RFID) Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

15 CHAPTER 13 Marketing Channels and Supply Chain Management o Software system that consolidates data from among a firm’s various business units o ERP and its related software aren’t always perfect Enterprise Resource Planning Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

16 CHAPTER 13 Marketing Channels and Supply Chain Management o A physical distribution system contains these elements: o Customer service o Transportation o Inventory control o Protective packaging and materials handling o Order processing o Warehousing Physical Distribution Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

17 CHAPTER 13 Marketing Channels and Supply Chain Management o Results when the managers of individual physical distribution functions attempt to minimize costs, but the impact of one task on the others leads to less than optimal results o Occurs when a firm introduces a new product that may not fit easily into its current physical distribution system o Effective management of physical distribution requires cost trade-offs The Problem of Suboptimization Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

18 CHAPTER 13 Marketing Channels and Supply Chain Management Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

19 CHAPTER 13 Marketing Channels and Supply Chain Management o Piggyback - Most widely used form of intermodal coordination o Birdyback service - Sends motor carriers to pick up a shipment locally and deliver that shipment to local destinations o Fishyback service - Intermodal coordination system between motor carriers and water carriers Intermodal Coordination Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

20 CHAPTER 13 Marketing Channels and Supply Chain Management o Storage warehouse - Holds goods for moderate to long periods in an attempt to balance supply and demand for producers and purchasers o Distribution warehouse - Assembles and redistributes goods, keeping them moving as much as possible Warehousing Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.


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