1. 16-1 CHAPTER SUPPLY CHAIN AND CHANNEL MANAGEMENT 16 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2. 16-2 LEARNING OBJECTIVES Understand the importance of marketing channels and supply chain management. Understand the difference between direct and indirect marketing channels. Describe how marketing channels are managed. Describe the flow of information and merchandise in the marketing channel. Supply Chain and Channel Management LO1 LO2 LO3 LO4

3. 16-3 Supply Chain Management

4. 16-4 Marketing Channels Add Value Reduce number of transactions Increase value for consumers More efficient and effective http://www.youtube.com/watch?v=NeK5ZjtpO-M

5. 16-5 Marketing Channel Management Affects Other Aspects of Marketing Fulfilling delivery promisesMeeting customer expectationsReliant on an efficient supply chain Courtesy Zara International, Inc.

6. 16-6 Designing Marketing Channels Manufacturer Customer Direct Channel Manufacturer Customer Retailer Direct Channel One Intermediary Manufacturer Customer Retailer Wholesaler Direct Channel Two Intermediaries

7. 16-7 Types of Vertical Marketing Systems Administered vertical marketing system Corporate vertical marketing system Contractual vertical marketing system

8. 16-8 Power RewardCoerciveReferentExpertiseInformationLegitimate

9. 16-9 Managing Marketing Channels and Supply Chains Through Strategic RelationshipsStrategic Relationships Mutual Trust Open Communications Common GoalsInterdependence Credible Commitments

10. 16-10 CHECK YOURSELF 1.What is the difference between an indirect and a direct marketing channel? 2.What are the differences among the three types of vertical marketing systems? 3.How do firms develop strong strategic partnerships with their marketing channel partners?

11. 16-11 Making Information Flow through Marketing Channels

12. 16-12 Data Warehouse Electronic Data Interchange Electronic Data Interchange Cycle time Quality of communications Easily analyzed and used Photo by Cabela’s

13. 16-13 Vendor-Managed Inventory DH Kong/Plush Studios/Getty Images

14. 16-14 CHECK YOURSELF 1.What are the marketing channel links associated with each information flow? 2.How do marketing channel members use data warehouses to make decisions? 3.What is EDI and how is it used? 4.Why do some marketing channels use VMI, while others do not?

15. 16-15 Making Merchandise Flow Through Marketing Channels

16. 16-16 The Distribution CenterDistribution Center Shipping to store Preparing to ship Getting Merchandise Floor Ready Storing and Cross-Docking Receiving and checking using UPC and RFID Management of inbound transportation ABC News Segment on a Walgreens Warehouse

17. 16-17 Inventory Management Through Just-In-Time SystemsJust-In-Time Systems Just-in-time (JIT) Quick response (QR) Zappos Courtesy Tubular Steel, Inc.

18. 16-18 CHECK YOURSELF 1.How does merchandise flow through a typical marketing channel? 2.Why have just-in-time supply chain systems become so popular?

19. 16-19 Return to slide Merchandise cartons that are cross-docked are prepackaged by the vendor for a specific store. Glossary

20. 16-20 Return to slide Manufacturers can ship merchandise either directly to a store or to a distribution center, where it is then shipped to the store. Glossary

21. 16-21 Return to slide Electronic data interchange (EDI) is the computer-to-computer exchange of business documents from a retailer to a vendor and back. Glossary

22. 16-22 Return to slide Just-in-time inventory systems are inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems. Glossary

23. 16-23 Return to slide Radio frequency identification (RFID) tags are tiny computer chips that automatically transmit to a special scanner all the information about a container’s contents or individual products. Glossary

24. 16-24 Return to slide A strategic relationship or partnering relationship involves the supply chain members being committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial. Glossary

25. 16-25 Return to slide Supply chain management is a set of approaches and techniques firms employ to integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless operation in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system wide costs while satisfying the service levels that their customers require. Glossary

26. 16-26 Return to slide Vendor-managed inventory (VMI) is an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer’s inventory levels in each of its stores. Glossary