The document discusses marketing channels and supply chain management. It defines key terms like marketing channels, intermediaries, and supply chain. It describes channel structures for consumer and business products. It discusses the functions of intermediaries and issues that influence channel strategy decisions. It also covers managing relationships, logistical components of supply chains, and new technologies and trends in supply chain management.

1. CHAPTER 12 Supply Chain Management Marketing Channels and Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Introduction to Marketing McDaniel, Lamb, Hair 9

2. Learning Outcomes LO I LO 2 LO 3 Explain what a marketing channel is and why intermediaries are needed Define the types of channel intermediaries and describe their functions and activities Describe the channel structures for consumer and business products and discuss alternative channel arrangements

3. Learning Outcomes Define supply chain management and discuss its benefits Discuss the issues that influence channel strategy Explain channel leadership, conflict, and partnering Describe the logistical components of the supply chain LO 5 LO 6 LO 4 LO 7

4. Learning Outcomes Discuss new technology and emerging trends in supply chain management Discuss channels and distribution decisions in global markets Identify the special problems and opportunities associated with distribution in service organizations LO 9 LO IO LO 8

5. Marketing Channels Explain what a marketing channel is and why intermediaries are needed LO I

6. Marketing Channels Marketing Channel LO I A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.

7. Marketing Channels Supply Chain LO I The connected chain of all the business entities, both internal and external to the company, that perform or support the logistics function.

8. Marketing Channel Functions LO I Specialization and division of labor Overcoming discrepancies Providing contact efficiency

10. Overcoming Discrepancies LO I 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.

11. Overcoming Discrepancies LO I Temporal Discrepancy Spatial Discrepancy A situation that occurs when a product is produced but a customer is not ready to buy it. The difference between the location of a producer and the location of widely scattered markets.

12. Providing Contact Efficiency LO I

13. REVIEW LEARNING OUTCOME Marketing Channels LO I Providing Specialization and Division of Labor Overcoming Discrepancies Providing Contact Efficiency Marketing Channel Supply Chain

14. Channel Intermediaries Define the types of channel intermediaries and describe their functions and activities LO 2

15. Channel Intermediaries LO 2 Retailer A channel intermediary that sells mainly to customers. Merchant Wholesaler An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them. Agents and Brokers Wholesaling intermediaries who facilitate the sale of a product by representing channel members.

16. Channel Intermediaries LO 2 Retailers Merchant Wholesalers Agents and Brokers Take Title to Goods Take Title to Goods Do NOT Take Title to Goods

17. Factors Suggesting Type of Wholesaling Intermediary to Use LO 2 Product characteristics Buyer considerations Market characteristics

18. Factors Suggesting Type of Wholesaling Intermediary to Use LO 2 Concentrated Dispersed Concentration of customers Few Many Number of customers Longer lead time Shorter lead time Time between order and receipt of shipment Infrequent Frequent Frequency of ordering Low High Product’s gross margin Simple Complex Technicality of product Nonstandard, custom Standard Nature of product Agents/Brokers Merchant Wholesalers Factor

19. Channel Functions Performed by Intermediaries LO 2 Contacting/Promotion Negotiating Risk Taking Researching Financing Physically distributing Storing Sorting Facilitating Functions Transactional Functions Logistical Functions

20. Logistics LO 2 Logistics The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption.

21. REVIEW LEARNING OUTCOME Channel Intermediaries and Functions LO 2 CHANNEL INTERMEDIARIES Retailers Wholesalers Agents and Brokers CHANNEL FUNCTIONS Transactional Logistical Facilitating Perform

22. Channel Structures Describe the channel structures for consumer and business products and discuss alternative channel arrangements LO 3

23. Channels for Consumer Products LO 3 A distribution channel in which producers sell directly to consumers. Direct Channel

24. Channels for Consumer Products LO 3 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

25. LO 3 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

26. Business-to-Business Exchanges on the Internet LO 3 Agents link buyers and sellers Companies drop the intermediary from the supply chain “ Private exchanges” with select suppliers automate the supply chain Online http://www.sherwinwilliams.com

27. Alternative Channel Arrangements LO 3 Multiple channels Strategic channel alliances Nontraditional channels

28. Biz Flix Casino LO 3

30. Supply Chain Management Define supply chain management and discuss its benefits LO 4

31. Supply Chain Management LO 4 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.

32. Role of Supply Chain Management LO 4 Physical flow process that engineers the movement of goods Communicator of customer demand from point of sale to supplier

34. LO 4 The Supply Chain Process

35. Benefits of Supply Chain Management LO 4 Means of differentiation Greater supply chain flexibility Improved customer service Higher revenues Reduced costs

36. REVIEW LEARNING OUTCOME Supply Chain Management LO 4

37. Making Channel Strategy Decisions Discuss the issues that influence channel strategy LO 5

38. Channel Strategy Decisions LO 5 Factors Affecting Channel Choice Producer Factors Product Factors Market Factors Exclusive Distribution Selective Distribution Intensive Distribution Level of Distribution Intensity

39. Market Factors LO 5 Market Factors That Affect Channel Choices Customer profiles Consumer or Industrial Customer Size of market Geographic location

40. Product Factors LO 5 Product Factors That Affect Channel Choices Product Complexity Product Standardization Product Life Cycle Product Delicacy Product Price

41. Producer Factors LO 5 Producer Factors That Affect Channel Choices Producer Resources Number of Product Lines Desire for Channel Control

42. Levels of Distribution Intensity LO 5 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

43. Levels of Distribution Intensity LO 5 Intensive Achieve mass market selling. Convenience goods. Many Selective Exclusive Work with selected intermediaries. Shopping and some specialty goods. Work with single intermediary. Specialty goods and industrial equipment. Several One Intensity Level Objective Number of Intermediaries

44. REVIEW LEARNING OUTCOME Issues Influencing Channel Strategy LO 5

45. Managing Channel Relationships Discuss the issues that influence channel strategy LO 6

46. Social Dimensions of Channels LO 6 Partnering Conflict Leadership Control Power

47. Channel Power, Control, and Leadership LO 6 Channel Power A channel member’s capacity to control or influence the behavior of other channel members Channel Control A situation that occurs when one marketing channel member intentionally affects another member’s behavior Channel Leader A member of a marketing channel that exercises authority/power over the activities of other members

48. Channel Conflict and Partnering LO 6 Channel Conflict A clash of goals and methods between distribution channel members Channel Partnering The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage

50. Channel Partnering LO 6 Supplier / Manufacturer Relationships Short-term Adversarial Independent Price important Long-term Cooperative Dependent Value-added services Number of Suppliers Many Few Transaction-Based Partnership-Based Information Sharing Minimal High Investment Required Minimal High

51. REVIEW LEARNING OUTCOME Channel Leadership, Conflict, & Partnering LO 6 Channel Relationship Synergy Channel Conflict Horizontal Vertical Channel Power, Control, Leadership Channel Partnering

52. Managing Logistical Components Describe the logistical components of the supply chain LO 7

53. Logistical Components of the Supply Chain LO 7 Supply Chain Team Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Materials Handling Transportation Logistics Information System

55. Production Scheduling LO 7 Push / Pull Strategy Traditional Focus Push Start of Production Manufacturing Inventory- Based Mass Production Customer Focus Pull Customer-Order Based Mass Customization

56. Just-in-Time Manufacturing LO 7 JIT A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line.

58. JIT Requirements LO 7 Receive high-quality parts Meet supplier delivery commitments Have a crisis management plan

59. Order Processing LO 7 Electronic Data Interchange Information technology that replaces paper documents that accompany business transactions with electronic transmission of the information. http://www.walmartstores.com Online

60. Order Processing LO 7 Inventory Control System A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand.

61. Order Processing LO 7 Materials Requirement Planning (MRP) An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. Distribution Resource Planning (DRP) An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer.

62. Inventory Replenishment Example LO 7 MRP Sleep Right Mattress Retail Store Sleep Right Distribution Center ABC Mattress Wholesaling Company Great Mattress Company

63. Materials Handling Functions LO 7 Receive goods into warehouse Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment Identify, sort, and label goods

64. Transportation LO 7 Airways Water Pipelines Motor Carriers Railroads

66. Criteria for Ranking Modes of Transportation LO 7 Relative Cost Transit Time Reliability Capability Accessibility Traceability Highest Lowest Air Water Pipe Rail Truck Water Rail Pipe Truck Air Pipe Truck Rail Air Water Water Truck Rail Truck Air Pipe Rail Air Water Pipe Air Truck Rail Water Pipe

67. Trends in Supply Chain Management Discuss new technology and emerging trends in supply chain management LO 8

68. Trends in Supply Chain Management LO 8 Electronic distribution Outsourcing of logistics functions Advanced computer technology

71. Channels and Distribution Decisions for Global Markets Discuss channels and distribution decisions in global markets LO 9

72. Channels and Distribution Decisions for Global Markets LO 9 Global Channel Development Channel structure and type differ Gray marketing channels Global Supply Chain Management Awareness of trade legalities Transportation Issues

73. REVIEW LEARNING OUTCOME LO 9 Global Market Channel & Distribution Decisions Distribute directly or through foreign partners Different channel structures than in domestic markets Illegitimate “gray” marketing channels Legal and infrastructure differences

74. Channels and Distribution Decisions for Services Identify the special problems and opportunities associated with distribution in service organizations LO IO

75. Channels and Distribution Decisions for Services LO IO Minimizing wait times Managing service capacity Improving service delivery

76. REVIEW LEARNING OUTCOME Distribution in Service Organizations LO IO