chapter 12 new.pdfmarketing information pdf

Marketing

1. Marketing Channels & Channels Design
decisions

2. Learning Objectives
•Define Marketing channels
•Importance of using distributors
•Channel levels
•Functions of marketing channels
•Channels design decisions
•Channel management decisions
•Define Retailing, Wholesaling and logistics
•Physical Distribution management

3. Supply Chains
•Upstreamsupplychainistheprocessof
gettingtherawmaterials,components,parts,
information,finances,andexpertisetothe
manufacturer.
•Downstreamsupplychainmeanprocessof
gettingproductsfromthemanufacturerto
theendconsumer

4. Value Delivery Network
•Company, suppliers, distributors, and
customers who partner with each other to
improve the performance of the entire
system

5. Marketing Channels
(Distribution Channels)
•Interdependent organizations that help make
a product or service available for use or
consumption
•Channel decisions
•Affect every other marketing decision
•Can lead to competitive advantage
•May involve long-term commitments to other
firms

6. How a Distributor Reduces the Number of
Channel Transactions

7. How Channel Members Add Value
•Intermediaries create greater efficiency in
making goods available to target markets.
•Role of marketing intermediaries
•Transform the assortments of products made by
producers into the assortments wanted by
consumers
•Bridge the major time, place, and possession
gaps that separate goods and services from
users

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Functions of Marketing Channels

9. Number of Channel Levels
•Channel level: A layer of intermediaries that
performs work in bringing the product and its
ownership closer to the final buyer
•Direct marketingchannel: No intermediary
levels
•Indirect marketing channels: One or more
intermediary levels

10. Number of Channel Levels
•Types of flows that connect the institutions in
the channel:
•Physical flow of products
•Flow of ownership
•Payment flow
•Information flow
•Promotion flow

11. Consumer and
Business Marketing Channels

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Importance of using distributors
•Knowledge of the market
•Enhanced customer service
•Market Research
•Expansion
•Storage facilities
•Larger customer base
•Expand Customer service
•Reduced capital expenditure

13. Channel Behavior
•Channelconflict:Disagreementsamongmarketing
channelmembersongoals,roles,andrewards
•Horizontalconflictoccursamongfirmsatthesamelevel
ofthechannel.
Eg:Retailerstoretailer,WholesalerstoWholesalers
•Verticalconflictoccursbetweendifferentlevelsofthe
samechannel.
Eg:RetailerstoWholesalers,ProducertoRetailer
•Multi-ChannelConflictoccurwhenthemanufacturer
hasestablishedtwoormorechannelstoselltosame
market.
Eg:Newspaperindustry

14. Vertical Marketing Systems
•Consists of one or more independent producers, wholesalers,
and retailers
•Each member is a separate business seeking to maximize its
own profits even at the expense of profits for the system as a
whole.
Conventional distribution channel
•Producers, wholesalers, and retailers act as a unified system.
•Types: Corporate, contractual, and administered
Vertical marketing system (VMS)

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16. Horizontal Marketing System
•Two or more companies at one level join
together to follow a new marketing
opportunity.

17. Multichannel Distribution Systems
•A single firm sets up two or more marketing
channels to reach customer segments.
•Advantages:
•Expansion of sales and marketing coverage
•Tailor-made products and services for the
specific needs of customer segments
•Disadvantages:
•Harder to control
•Generates conflict

18. Multichannel
Distribution System

19. Disintermediation
•Occurs when product or service producers cut
out marketing channel intermediaries or
when radically new types of channel
intermediaries displace traditional ones

20. Channel Design Decisions
•Marketing channel design involves designing
effective marketing channels by:
•Analyzing customer needs
•Setting channel objectives
•Identifying major channel alternatives
•Evaluating the alternatives

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1.Analyzing customer needs

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2.Setting channel objectives

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3.Identifying major channel alternatives

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4.Evaluating the alternatives

25. Designing International Channels
•Channel strategies should be adapted to the
existing structures within each country.
•Distribution systems can have many layers
and a large number of intermediaries.
•Customs and government regulation can
restrict distribution in global markets.

26. Channel Management Decisions
Selecting channel
members
Managing and
motivating
channel members
Evaluating
channel members

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•Marketingchannelmanagementcallsforselecting,managing,andmotivating
individualchannelmembersandevaluatingtheirperformanceovertime.
•Whenselectingintermediaries,thecompanyshoulddeterminewhatcharacteristics
distinguishthebetterones.Itwillwanttoevaluateeachchannelmember’syearsin
business,otherlinescarried,location,growthandprofitrecord,cooperativeness,
andreputation.
•Onceselected,channelmembersmustbecontinuouslymanagedandmotivatedto
dotheirbest.Manycompaniespracticestrongpartnerrelationshipmanagementto
forgelong-termpartnershipswithchannelmembers.Thiscreatesavaluedelivery
systemthatmeetstheneedsofboththecompanyanditsmarketingpartners.
•Thecompanymustregularlycheckchannelmemberperformanceagainststandards
suchassalesquotas,averageinventorylevels,customerdeliverytime,treatmentof
damagedandlostgoods,cooperationincompanypromotionandtrainingprograms,
andservicestothecustomer.Companiesneedtobesensitivetotheneedsoftheir
channelpartners.Thosethattreattheirpartnerspoorlyrisknotonlylosingtheir
supportbutalsocausingsomelegalproblems.

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What is retailing?

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What is wholesaling

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36. Marketing Logistics
(Physical Distribution)
•Planning,implementing,andcontrollingthephysicalflowofmaterials,final
goods,andrelatedinformationfrompointsoforigintoconsumption
•Customer-centeredlogistics:Marketplacetothefactoryorsourcesofsupply
•Outboundlogistics
•Inboundlogistics
•Reverselogistics
Outboundlogisticsaretheactionsrequiredtogetthefinalgoodsdeliveredto
theend–users.Inboundlogisticsisthereceivingofrawmaterialsorproducts
fromasuppliertoawarehouse.Reverselogisticswhichinvolvesreusing,
recycling,refurbishing,ordisposingofbroken,unwanted,orexcessproducts
returnedbyconsumersorresellers

37. Supply
Chain Management

38. Marketing Logistics and
Supply Chain Management
•The goal of marketing logistics is to deliver a
targeted level of customer service at the least
cost.
•Logistics functions include:
•Warehousing
•Inventory management
•Transportation
•Logistics information management

39. Warehousing
•Storagewarehousesstoregoodsfor
moderatetolongperiods.
•Distributioncentersarelarge,highly
automatedwarehousesthatreceivegoods,
takeorders,fillthem,anddelivergoodsto
customers.

40. Inventory Management
•Should be done in a cost effective and
profitable manner
•Just-in-time logistics systems
•Radio frequency identification (RFID), smart tag
technology, gives the physical location of a
product.

41. Transportation
•Pricing of products
•Delivery performance
•Condition of goods
•Customer satisfaction
Factors affected by choice of transportation
•Trucks, railroads, water carriers, pipelines, air carriers, and the
Internet
Modes
•Combining two or more modes of transportation
•Piggyback, fishyback, trainship, and airtruck
Multimodal transportation

42. Logistics Information Management
•Flows of information closely linked to channel
performance
•Information can be shared and managed
through:
•Electronic data interchange (EDI)
•Vendor-managed inventory (VMI)

43. Integrated Logistics Management
•Emphasizes teamwork both inside the
company and among all the marketing
channel organizations
•Forming cross-functional teams inside the firm
•Building logistics partnerships
•Outsourcing to third-party logistics providers
•Third-party logistics (3PL) provider: Performs any or
all of the functions required to get a client’s product to
market