1. Marketing Channels and Supply Chain Management
Chapter Eleven
Lecture Slides
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2. Looking Ahead After studying this chapter you should be able to:
Explain why companies use distribution channels and discuss the functions these channels perform
Discuss how channel members interact and how they organize to perform the work of the channel
Identify the major channel alternatives open to a company
Explain how companies select, motivate, and evaluate channel members
Discuss the nature and importance of marketing logistics and integrated supply chain management
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3. The Concept of Contactual Efficiency
Mfg
Mfg
Mfg
Mfg
Mfg
Mfg
Mfg
Mfg
W/S Dist
For further details about this topic see page396
Cus
Cus
Cus
Cus
Cus
Cus
Cus
Cus
Figure 11-1
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4. Distribution Channel Functions
Why use marketing intermediaries?
Contacts, experience, specialization, and scale of operations
Objective:
Provide place, time, and possession utility demanded by customers
Functions performed:
Information
Promotion
Contact
Matching
Negotiation
Physical distribution
Financing
Risk taking
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5. Consumer Marketing Channels
Manufacturer
Consumer
Manufacturer
Retailer
Consumer
Manufacturer
Wholesaler
Retailer
Consumer
Manufacturer
Wholesaler
Jobber
Retailer
Consumer
Figure 11-2
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6. Business Marketing Channels
Manufacturer
Industrial
Consumer
Manufacturer
Industrial
distributor
Industrial
Consumer
Manufacturer
Mfg Sales
Representative
Or Sales Branch
Industrial
Consumer
Manufacturer
Mfg Sales
Representative
Or Sales Branch
Industrial
distributor
Industrial
Consumer
Figure 11-2
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7. Channel Behaviour Channel conflict: Horizontal conflict:
Disagreement between channel members over goals and roles, who should do what and for what rewards
Horizontal conflict:
Conflict between firms on the same level
Vertical conflict:
Conflict between firms on different levels
Disintermediation:
Displacement of a traditional member from the marketing channel
Selling direct via the Internet
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8. Types of Marketing Systems
Conventional distribution channel:
Channel members are independently owned
Pursue their own corporate objectives
Conflict may occur when goals differ
Vertical marketing system:
Channel members act as a unified system
May have common ownership
May contract for this arrangement
May be forced into arrangement by power differential between members
Franchise systems are the most popular
Horizontal marketing systems
Two or more companies on the same level join together for mutual gain
Airline alliances
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9. Hybrid Marketing Channel
Producer
Distributors
Catalogue
telephone
Internet
Sales
force
Dealers
Retailers
For further details about this topic see page
Business
segment 1
Business
segment 2
Consumer
segment 2
Consumer
segment 1
Figure 11-4
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10. Channel Design Decisions
Analyzing consumer service needs
Setting channel objectives and constraints
Identifying major alternatives
Types of intermediaries
Company sales force
Manufacturer’s agency
Industrial distributors
Number of intermediaries
Intensive distribution
Selective distribution
Exclusive distribution
Responsibilities of channel members
Evaluating the major alternatives
International distribution channels
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11. Channel Management Decisions
Selection
Select those who best fit the channel objectives
Degree of selectivity will vary with intensity used
Motivation
Maintain strong partnerships
Reward those intermediaries who perform well
Assist or replace weaker ones
Evaluating
Compare member performance against standards
Use market share, performance against objectives, or qualitative measurements
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12. Marketing Logistics Marketing logistics Supply chain management
Physical distribution of the products
Logistics is a cost of doing business, not a revenue generator
Logistics has a direct impact on customer satisfaction
Marketing logistics addresses outbound distribution and inbound
Supply chain management
Managing value-added flows between suppliers, the company, resellers, and final users
Goal of logistics:
Provide targeted level of customer service for the least cost
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13. Major Logistics Functions
Order processing
Warehousing
Inventory management
Transportation
Integrated supply chain management
Cross-functional teamwork within the company
Building channel partnerships
Third-party logistics (3PL) providers
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14. Looking Back Why companies use intermediaries
How channel members interact
Major channel alternatives
Selecting, motivating, and evaluating channel members
Nature and importance of logistics
©Copyright 2004, Pearson Education Canada Inc.