On October 23rd, 2014, we updated our
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A set of interdependent organizations that facilitate the transfer of ownership as products move from producer to business user or consumer
Supply Chain – the connected chain of business entities (internal and external) that perform or support the channel functions
Marketing Channel Functions Specialization and division of labor Overcoming discrepancies Providing contact efficiency
Overcoming Discrepancies Discrepancy of Quantity Discrepancy of Assortment The difference between the amount of product produced and the amount an end user wants to buy. The lack of all the items a customer needs to receive full satisfaction from a product or products.
Providing Contact Efficiency
Channel members - Intermediaries
Retailers – Organizations whose activities are directed toward sales to final (ultimate) consumers
Wholesalers – Organizations that sell to retailers or other wholesalers, and/or to businesses or institutions for use in the conduct of business
Channel Intermediaries Retailers Merchant Wholesalers Agents and Brokers Take Title to Goods Take Title to Goods Do NOT Take Title to Goods
Factors Suggesting Type of Wholesaling Intermediary to Use Product characteristics Buyer considerations Market characteristics
Channels for Consumer Products Producer Producer Producer Producer Consumers Consumers Consumers Consumers Retailers Retailers Retailers Wholesalers Wholesalers Agents or Brokers Wholesaler Channel Retailer Channel Direct Channel Agent/Broker Channel
Channels for Business Products Producer Industrial User Direct Channel Producer Govt. Buyer Direct Channel Producer Producer Producer Industrial User Industrial User Industrial User Industrial Distributor Industrial Distributor Agents or Brokers Agents or Brokers Agent/Broker Channel Industrial Distributor Agent/Broker Industrial Channel
Supply Chain Management Supply Chain A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.
Benefits of Supply Chain Management Means of differentiation Greater supply chain flexibility Improved customer service Higher revenues Reduced costs
Channel Strategy Decisions Factors Affecting Channel Choice Producer Factors Product Factors Market Factors Exclusive Distribution Selective Distribution Intensive Distribution Level of Distribution Intensity
Market Factors Market Factors That Affect Channel Choices Customer profiles Consumer or Industrial Customer Size of market Geographic location
Product Factors Product Factors That Affect Channel Choices Product Complexity Product Standardization Product Life Cycle Product Delicacy Product Price
Producer Factors Producer Factors That Affect Channel Choices Producer Resources Number of Product Lines Desire for Channel Control
Levels of Distribution Intensity Intensive A form of distribution aimed at having a product available in every outlet Selective A form of distribution achieved by screening dealers to eliminate all but a few in any single area Exclusive A form of distribution that established one or a few dealers within a given area
Logistical Components of the Supply Chain Supply Chain Team Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Materials Handling Transportation Logistics Information System
Channels and Distribution Decisions for Services Minimizing wait times Managing service capacity Improving service delivery