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Mkt. channels( uploaded by pranit h.)
 

Mkt. channels( uploaded by pranit h.)

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description about marketing channel:- pranit

description about marketing channel:- pranit

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    Mkt. channels( uploaded by pranit h.) Mkt. channels( uploaded by pranit h.) Presentation Transcript

    • Part 5: Distribution Decisions13. Marketing Channels and Supply Chain Management14. Direct Marketing and Marketing Resellers: Retailers and Wholesalers Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
    • Chapter 13 MarketingChannels andSupply ChainManagement Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
    • Chapter Objectives1. Describe the types of marketing channels and 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.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 how transportation intermediaries and combined transportation modes can improve physical distribution.9. Identify and briefly describe the different types of warehousing. Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-3
    • The Role of Marketing Channels in Marketing Strategy Channels provide the means by which the firm moves the goods and services it produces to ultimate users Facilitate the exchange process by cutting the number of contacts necessary Adjust for discrepancies in the market’s assortment of goods and services via sorting Standardize exchange transactions Facilitate searches by both buyers and sellers Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-4
    • Types of Marketing Channels Marketing channel: system of marketing channel institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a distribution channel Marketing intermediary: wholesaler or retailer intermediary that operates between producers and consumers or business users; also called a middleman Wholesaler: marketing intermediary that takes Wholesaler title to goods and then distributes these goods further; also called a jobber or distributor Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-5
    •  Types of Marketing Channels Consumer Goods Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-6
    •  Types of Marketing Channels Business Goods Services Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-7
    •  Direct Selling Direct channel: marketing channel channel that moves goods directly from a producer to ultimate user Direct selling: strategy designed to selling establish direct sales contract between producer and final user Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-8
    •  Channels Using Marketing Intermediaries Producer to wholesaler to retailer to consumer Producer to wholesaler to business user Producer to agent to wholesaler to retailer to consumer Producer to agent to wholesaler to business user Producer to agent to business user Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-9
    •  Dual Distribution: Network that moves Distribution products to a firm’s target market through more than one marketing channel Reverse Channels: Channels designed to Channels return goods to their producers Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-10
    • Channel Strategy Decisions Selection of a Marketing Channel Factors which impact the selection of a marketing channel include: Market factors Product factors Organizational factors Competitive factors Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-11
    •  Factors influencing Marketing Channel Strategies Characteristics of Short Characteristics of Long Channels Channels Market Business users Consumers factors Geographically concentrated Geographically diverse Extensive technical Little technical knowledge and knowledge and regular regular servicing not required servicing required Large orders Small orders Product Perishable Durable factors Complex Standardized Expensive Inexpensive Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-12
    • Characteristics of Short Characteristics of Long Channels ChannelsProducer Manufacturer has adequate Manufacturer lacks adequatefactors resources to perform resources to perform channel functions channel functions Broad product line Channel control important Limited product line Channel control not importantCompetitive Manufacturing feels Manufacturer feelsfactors satisfied with marketing dissatisfied with marketing intermediaries’ performance intermediaries’ performance in promoting products in promoting products Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-13
    •  Determining Distribution Intensity Distribution intensity: number of intermediaries through which a manufacturer distributes its goods Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-14
    •  Intensive distribution: channel policy in distribution which a manufacturer of a convenience product attempts to saturate the market Selective distribution: channel policy in distribution which a firm chooses only a limited number of retailers to handle its product line Exclusive distribution: channel policy in distribution which a firm grants exclusive rights to a single wholesaler or retailer to sell its products in a particular geographic area Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-15
    •  Legal problems of exclusive distribution Exclusive-dealing agreement: arrangement between manufacturer and e-marketing intermediary that prohibits the intermediary from handling competing product lines Closed sales territories: exclusive geographic selling region of a distributor Tying agreement: Arrangement that requires a marketing intermediary to carry items other than those they want to sell Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-16
    •  Who Should Perform Channel Functions? Fundamental principle that governs channel decisions Channel members can shift responsibilities for the performance of certain marketing functions, but they cannot eliminate central functions Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-17
    • Channel Management and Leadership Channel Captain: a dominant and controlling Captain member of a marketing channel Channel Conflict Horizontal Conflict  Most often, horizontal conflict causes sparks between different types of marketing intermediaries that handle similar products  Sometimes results from disagreements among channel members at the same level Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-18
    • Vertical Conflict  Channel members at different levels find many reasons for disputes  Example: when retailers develop private brands to compete with producers’ brands or when producers establish their own retail outlets or WWW SitesThe Gray Market  Grey Good: product made abroad under license from a U.S. firm and then sold in the U.S. market in competition with that firm’s own domestic output  Viewed by producers as undesired competition Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-19
    •  Achieving Channel Cooperation Channel Cooperation, achieved via effective cooperation among channel members, is the desired antidote to channel conflict It is Best achieved when all channel members regard themselves as components of the same organization Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-20
    • Vertical Marketing Systems Vertical marketing system (VMS): planned channel system designed to improve distribution efficiency and cost effectiveness by integrating various functions throughout the distribution chain Forward integration Backward integration Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-21
    •  Administered marketing system: VMS system that achieves channel coordination when a dominant channel member exercises its power Corporate marketing system: a VMS in system which a single owner operates at each stage in its marketing channel Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-22
    •  Contractual marketing system: VMS that system coordinates channel activities through formal agreements among channel members like: Wholesaler-Sponsored Voluntary Chains Retail Cooperatives Franchises Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-23
    • Logistics and Supply Chain Management  Supply (value) chain: sequence of chain suppliers that contributes to the creation and delivery of a good or service Upstream management Downstream management Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-24
    •  Figure 13.6 The Supply Chain of a Manufacturing Company Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-25
    •  Radio Frequency Identification (RFID) Technology that uses a tiny chip with identification information that can be read by a scanner using radio waves from a distance Enterprise Resource Planning Software system that consolidates data among a firm’s units Logistical Cost Control Third party (contract) logistics firm: company that specializes in handling logistics activities for other firms Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-26
    • Physical Distribution A company’s physical distribution system contains the following elements: Customer Service Transportation Inventory Control Protective packaging and materials handling Order Processing Warehousing Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-27
    •  Figure 13.7 Allocation of Physical Distribution Expenditures Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-28
    •  The Problem of Suboptimization Condition that results when individual operations achieve their objectives but interfere with progress toward broader organizational goals Customer Service Standards Statement of goals and acceptable performance for the quality of service that a firm expects to deliver to its customers Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-29
    •  Transportation Class Rate Commodity Rate Classes of Carriers  Common carriers move freight via all modes of transportation for the general public  Contract carriers do not serve the general public  Private carriers do not offer services for hire, but provide transportation services solely for internally generated freight Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-30
    •  Major Modes of Transportation Railroads Motor Carriers Water Carriers Pipelines Air Freight Freight Forwarders and Supplemental Carriers Intermodal Coordination Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-31
    •  Comparison of Transport Modes Mode Speed Depend- Frequency Availabil- Flexibility Cost ability in of ity in in Meeting Shipments Different Handling Schedules LocationsRail Average Average Low Low High AverageWater Very slow Average Very low Limited Very high Very lowTruck Fast High High Very Average High extensivePipeline Slow High High Very Very low Low limitedAir Very fast High Average Average Low Very high Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-32
    •  Warehousing Storage warehouse Distribution warehouse Automated Warehouse Technology  Distribution costs can be cut and customer service improved by automating warehouse systems Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-33
    • Warehouse Locations  Major logistics decision involving the number and location(s) of storage facilities  Two cost categories influence the choice: Warehousing and materials- handling costs Delivery costs from warehouse to customers Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-34
    •  Inventory Control Systems Important since firms need to maintain enough inventory to meet customer demand without incurring unneeded costs for carrying excess inventory Just-in-time (JIT) production Vendor-managed inventory (VMI) Order Processing Stockout: order for a product that is unavailable for shipment or sale Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-35
    •  Protective Packaging and Materials Handling Materials Handling: set of activities that move production inputs and other goods within plants, warehouses, and transportation terminals  Unitizing: process of combining individual materials into large loads for easy handling  Containerization: process of combining several unitized loads into a single, well-protected load Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 13-36