1. Chapter 12 - slide 1
Chapter Twelve
Marketing Channels: Delivering
Customer Value

2. Supply Chains and the
Value Delivery Network
Upstream partners include raw material
suppliers, components, parts, information,
finances, and expertise to create a
Supply Chain Partners
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finances, and expertise to create a
product or service
Downstream partners include the marketing
channels or distribution channels that
look toward the customer

3. Supply Chains and the
Value Delivery Network
Supply chain “make and sell” view includes the
firm’s raw materials, productive inputs, and
factory capacity
Supply Chain Views
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Demand chain “sense and respond” view suggests
that planning starts with the needs of the target
customer, and the firm responds to these needs
by organizing a chain of resources and activities
with the goal of creating customer value

4. Supply Chains and the
Value Delivery Network
Value delivery network is
the firm’s suppliers,
distributors, and
Value Delivery Network
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distributors, and
ultimately customers
who partner with each
other to improve the
performance of the
entire system

5. Channel Behavior and Organization
Marketing channel consists of firms that
have partnered for their common good
with each member playing a specialized
role
Channel Behavior
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role

6. The Nature and Importance of
Marketing Channels
How Channel Members Add Value
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7. The Nature and Importance of
Marketing Channels
Number of Channel Levels
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8. Channel Behavior and
Organization
Multichannel Distribution System
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9. Channel Behavior and Organization
Disintermediation occurs when product or
service producers cut out intermediaries
and go directly to final buyers, or when
Changing Channel Organization
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and go directly to final buyers, or when
radically new types of channel
intermediaries displace traditional ones

10. Channel Design Decisions
Identifying Major Alternatives
Intensive distribution
• Candy and toothpaste
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Exclusive distribution
• Luxury automobiles and prestige
clothing
Selective distribution
• Television and home appliance

11. Channel Design Decisions
Each alternative should
be evaluated against:
Evaluating the Major Alternatives
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be evaluated against:
– Economic criteria
– Control
– Adaptive criteria

12. Public Policy and Distribution
Decisions
Exclusive distribution is when the seller allows only
certain outlets to carry its products
Exclusive dealing is when the seller requires that
the sellers not handle competitor’s products
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the sellers not handle competitor’s products
Exclusive territorial agreements are where
producer or seller limit territory
Tying agreements are agreements where the dealer
must take most or all of the line

13. Marketing Logistics and
Supply Chain Management
Marketing logistics (physical distribution)
involves planning, implementing, and
controlling the physical flow of goods,
services, and related information from
Nature and Importance of Marketing
Logistics
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services, and related information from
points of origin to points of
consumption to meet consumer
requirements at a profit

14. Marketing Logistics and
Supply Chain Management
Nature and Importance of Marketing Logistics
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15. Marketing Logistics and
Supply Chain Management
Supply chain management is the process of
managing upstream and downstream value-
Nature and Importance of Marketing Logistics
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managing upstream and downstream value-
added flows of materials, final goods, and
related information among suppliers, the
company, resellers, and final consumers