MKT 340 Ch12 ppt(1)

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LO1
Explain what is meant by a marketing
channel of distribution and why
intermediaries are needed.
Distinguish among traditional
marketing channels, electronic
marketing channels, and different
types of vertical marketing systems.
LO2
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 12, YOU SHOULD BE ABLE TO:
12-2

LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 12, YOU SHOULD BE ABLE TO:
LO3
Describe factors that marketing
executives consider when selecting
and managing a marketing channel.
Explain what supply chain and
logistics management are and how
they relate to marketing strategy.
LO4
12-3

CALLAWAY GOLF: DESIGNING AND DELIVERING
THE GOODS FOR GREAT GOLF
12-4
Calloway Golf

FIGURE 12-1 The variety of terms used
for marketing intermediaries that vary in
specificity and use in consumer and
business markets
12-5

NATURE AND IMPORTANCE OF
MARKETING CHANNELS
THE VALUE CREATED BY INTERMEDIARIES
LO1
 Marketing Channel
 Functions Performed by Intermediaries
• Transactional Function
• Logistical Function
• Facilitating Function
 Utilities Received by Consumers
12-6

FIGURE 12-2 Marketing channel
intermediaries perform three functions,
each consisting of different activities
12-7

CHANNEL STRUCTURE & ORGANIZATION
MARKETING CHANNELS FOR
CONSUMER PRODUCTS AND SERVICES
LO2
 Direct Channel
 Indirect Channel
• Retailers
• WholesalersRetailers
• AgentsWholesalersRetailers
12-8

FIGURE 12-3 Common marketing channels
for consumer products and services by the
kind and number of intermediaries
12-9

MARKETING CHANNELS FOR
BUSINESS PRODUCTS AND SERVICES
LO2
 Direct Channel
 Indirect Channel
• Industrial Distributor
• Agents
• AgentsIndustrial Distributors
12-10

FIGURE 12-4 Common marketing channels
for business products and services by the
kind and number of intermediaries
12-11

INTERNET & DIRECT MARKETING CHANNELS;
MULTICHANNEL MARKETING
LO2
 Internet Marketing Channels
 Direct Marketing Channels
 Multichannel Marketing
12-12

FIGURE 12-5 Consumer Internet marketing
channels are similar to those for consumer
products and services
12-13

DUAL DISTRIBUTION &
STRATEGIC CHANNEL ALLIANCES
LO2
 Dual Distribution
 Strategic Channel
Alliances
Honey Nut
Cheerios Ad
12-14

MARKETING MATTERS
Nestlé and General Mills—
Cereal Partners Worldwide
LO2
12-15
Cereal Partners

FIGURE 12-6 Three types of vertical
marketing systems: corporate, contractual
(most popular), and administered
12-16

VERICAL MARKETING SYSTEMS
LO2
 Vertical Marketing Systems
 Corporate Systems
• Wholesaler-Sponsored Voluntary Chains
 Contractual Systems
• Retailer-Sponsored Cooperatives
• Forward Integration
• Backward Integration
12-17

VERICAL MARKETING SYSTEMS
LO2
 Contractual Systems
• Franchising
 Manufacturer-Sponsored Retail Franchises
 Manufacturer-Sponsored Wholesale Franchises
 Service-Sponsored Retail Franchises
 Service-Sponsored Franchises
 Administered Systems
12-18

CHANNEL CHOICE AND MANAGEMENT
CHANNEL CHOICE CONSIDERATIONS
LO3
 Target Market Coverage (Density)
• Intensive Distribution
• Exclusive Distribution
• Selective Distribution
12-19

CHANNEL CHOICE CONSIDERATIONS
LO3
• Information • Convenience
• Variety • Pre- or Post-Sale
Service
 Buyer Requirements
 Profitability
12-20

USING MARKETING DASHBOARDS
Channel Sales and Profit at
Charlesburg Furniture
LO3
12-21

CHANNEL RELATIONSHIPS
LO3
 Sources of Channel Conflict
• Vertical Conflict
• Disintermediation
• Horizontal Conflict
12-22

CHANNEL RELATIONSHIPS
LO3
 Channel Influence
• Economic
• Expertise
• Identification
• Legitimate Right
 Channel Captain
12-23

LOGISTICS & SUPPLY CHAIN MANAGEMENT
KEY CONCEPTS
LO4
 Logistics
 Logistics
Management
• Customer
Requirements
• Customer Service
 Supply Chain
 Supply Chain
Management
• Cost-Effective Flow
• The Automotive
Supply Chain
12-24

FIGURE 12-7 Relating logistics
management and supply chain management
to supplier networks and marketing
channels
12-25

FIGURE 12-8 The automotive supply chain
includes thousands of firms that provide the
parts, components, and software in a typical
car
12-26

 Aligning a Supply Chain with
Marketing Strategy
• Understand the Customer
• Understand the Supply Chain
• Harmonize the Supply Chain
with the Marketing Strategy
SUPPLY CHAIN MGMT & MKT STRATEGYLO4
12-27

MARKETING MATTERS
IBM’s Integrated Supply Chain—
Delivering a Total Solution for Its Customers
LO4
12-28
IBM Video

SUPPLY CHAIN MGMT & MKT STRATEGY
LO4
 Dell: A Responsive Supply Chain
 Wal-Mart: An Efficient Supply Chain
• Cross-docking
12-29
Dell Web site
Walmart Web site

TWO CONCEPTS OF LOGISTICS
MANAGEMENT IN A SUPPLY CHAIN
LO4
 Total Logistics Cost Concept
 Customer Service Concept
12-30

FIGURE 12-9 Supply chain managers
balance total logistics cost factors against
customer service factors
12-31

KEY FUNCTIONS IN A SUPPLY CHAIN
CUSTOMER SERVICE FACTORS
LO4
 Time
• Lead Time
 Order Cycle Time
 Replenishment Time
• Quick Response
• Efficient Consumer Response
12-32

 Dependability
 Communication
 Convenience
• Vendor-Managed Inventory (VMI)
KEY FUNCTIONS IN A SUPPLY CHAIN
CUSTOMER SERVICE FACTORS
LO4
12-33

CLOSING THE LOOP:
REVERSE LOGISTICS
LO4
 Reverse Logistics
UPS Video
12-34

MAKING RESPONSIBLE DECISIONS
Reverse Logistics and Green Marketing
Go Together at Hewlett-Packard: Recycling e-Waste
LO4
12-35
HP Recycling Video

AMAZON: DELIVERING THE
GOODS…MILLIONS OF TIMES A DAY
VIDEO CASE 12
12-36
Amazon
Video case

VIDEO CASE 12
AMAZON
1. How do Amazon.com’s logistics
and supply chain management
activities help the company create
value for its customers?
12-37

VIDEO CASE 12
AMAZON
2. What systems did Amazon
develop to improve the flow of
products from suppliers to
Amazon distribution centers?
What systems improved the flow
of orders from the distribution
centers to customers?
12-38

VIDEO CASE 12
AMAZON
3. Why will logistics and supply
chain management play an
important role in the future
success of Amazon.com?
12-39

MARKETING CHANNELS
FOR APPLE
IN-CLASS ACTIVITY 12-1

ICA 12-1
Apple Marketing Channel Structure:
Apple Online Store—Direct Channel
CustomersConsumer
Producer
Apple Store
Producer
E-commerce
Web Site

ICA 12-1
Apple Retail Store—Direct Channel
CustomersConsumer
Producer
Apple Store
Producer
Retail Store
Outlet

ICA 12-1
Ingram Micro/Best Buy—Indirect Channel
Customers
Ingram Micro
Web site
Best Buy Web site
Producer
Wholesaler/Distributor
Retailer

ICA 12-1
MacMall Retail Store/Online/Catalog—Indirect Channel
CustomersConsumer
Producer
Retailer
Apple Store
Producer
MacMall

MARKETING CHANNELS
FOR FASTENAL
IN-CLASS ACTIVITY 12-2

ICA 12-2
Marketing Channels
Fastenal
Web site
Example:
Marketing Channels for
Fastenal Fasteners
(Unique Heads/Tops)

FIGURE 12-4 Common marketing channels for
business products and services

Marketing Channel
A marketing channel consists
of Individuals and firms involved
in the process of making a
product or service available for
use or consumption by consumers
or industrial users.
12-48

Multichannel Marketing
Multichannel marketing involves
the blending of different
communication and delivery channels
that are mutually reinforcing in
attracting, retaining, and building
relationships with consumers who
shop and buy in traditional
intermediaries and online.
12-49

Dual Distribution
Dual distribution involves an
arrangement whereby a firm
reaches different buyers by
employing two or more different
types of channels for the same
basic product.
12-50

Vertical Marketing Systems
Vertical marketing systems
are professionally managed and
centrally coordinated marketing
channels designed to achieve
channel economies and
maximum marketing impact.
12-51

Intensive Distribution
Intensive distribution is a level
of distribution density whereby a
firm tries to place its products and
services in as many outlets as
possible.
12-52

Exclusive Distribution
Exclusive distribution is a level
of distribution density whereby
only one retailer in a specific
geographical area carries the
firm’s products.
12-53

Selective Distribution
Selective distribution is a level
of distribution density whereby a
firm selects a few retailers in a
specific geographical area to carry
its products.
12-54

Channel Conflict
Channel conflict arises when
one channel member believes
another channel member is
engaged in behavior that
prevents it from achieving its
goals.
12-55

Disintermediation
Disintermediation involves
channel conflict that arises when
a channel member bypasses
another member and sells or
buys products direct.
12-56

Logistics
Logistics consists of those
activities that focus on getting the
right amount of the right products
to the right place at the right time
at the lowest possible cost.
12-57

Supply Chain
A supply chain consists of a
sequence of firms that perform
activities required to create and
deliver a product or service to
ultimate consumers or industrial
users.
12-58

Total Logistics Cost
Total logistics cost consists of
the expenses associated with
transportation, materials handling
and warehousing, inventory,
stockouts (being out of inventory),
order processing, and return
goods handling.
12-59

Customer Service
Customer service is the ability
of logistics management to satisfy
users in terms of time,
dependability, communication, and
convenience.
12-60

Vendor-Managed Inventory (VMI)
Vendor-managed inventory
(VMI) is an inventory-management
system whereby the supplier
determines the product amount
and assortment a customer (such
as a retailer) needs and
automatically delivers the
appropriate items.
12-61

Reverse Logistics
Reverse logistics is a process
of reclaiming recyclable and
reusable materials, returns, and
reworks from the point of
consumption or use for repair,
remanufacturing, redistribution,
or disposal.
12-62

MKT 340 Ch12 ppt(1)

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MKT 340 Ch12 ppt(1)