Chapter 13 Marketing Channels and Supply Chain Management

Tuesday, 11/11

Wal-Mart’s E-Stumble….WSJ 1. What portion of US consumer goods sales are online? a. What is the annual increase in US Online sales? b.What is expected to happen to online sales between the time are article was writing and (4 Years). 2. How well was Wal-mart positioned to capitalize on online sales in 2013, when the article was written? a.How did Walmart’s online sales compare with Amazon’s for 2012? b.What portion of Walmart’s sales were online? c.How do Walmart’s online shipping costs compare to Amazon?

Walmart’s E Stumble…..cont’d 3.In order to catch-up, explain the system that Walmart is testing to increase online sales? a. Why is Walmart’s competitive advantage with this system (What does Walmart have that Amazon does not (in terms of stores and distance to consumers)? 4.How much did Amazon’s revenue rise the year before the articles was published? a.How were Amazon’s profits in the same period? 5.Look at the map included in the article. Describe the pattern you see in the location of Amazon’s warehouses (fulfillment center) on the US map? Why are the warehouses where they are?

Which of the 4 p’s? PLACE  An area of profound change in US and Other countries following.  Powerful forces restructuring  Decrease in independent retailers?  Office supply, hardware, appliances, etc.

Why is this topic important to Louisiana?

Major In Supply Chain Mgt./Logistics/transportation Important industry with lots of jobs. Pay higher than most industries. Need for managers with training.

What is a market channel? What is a supply chain?

CONSIDER THIS: “WE CUT OUT THE MIDDLE- MEN AND PASS THE SAVINGS ON TO YOU”

CONTRIBUTIONS OF “MIDDLEMEN”  ALLOW FOR SPECIALIZATION sub assembly in mfg  OVERCOME DISCREPANCIES  PROVIDE CONTACT EFFIECIENCY

Overcoming Discrepancies Discrepancy of Quantity Discrepancy of Quantity Discrepancy of Assortment Discrepancy of Assortment The difference between the amount of product produced and the amount an end user wants to buy. 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. The lack of all the items a customer needs to receive full satisfaction from a product or products. 11 Copyright Cengage Learning 2013 All Rights Reserved

Overcoming Discrepancies Temporal Discrepancy Temporal Discrepancy Spatial Discrepancy Spatial Discrepancy A situation that occurs when a product is produced but a customer is not ready to buy it. 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. The difference between the location of a producer and the location of widely scattered markets. 12 Copyright Cengage Learning 2013 All Rights Reserved

Contact Efficiency

CHANNEL FUNCTIONS  TRANSACTION FUNCTION  LOGISTICAL FUNCTION  FACILITATING FUNCTION

CHANNEL STRUCTURE: Types of Consumer Channels DIRECT RETAILER WHOLESALER AGENT/BROKER CHANNEL MULTIPLE

Producer Consumers Retailers Wholesalers Agents or BrokersWholesalerChannelRetailerChannelDirectChannelAgent/BrokerChannel Channels for Consumer Products 16 Copyright Cengage Learning 2013 All Rights Reserved

Producer Consumers Retailers Wholesalers Agents or BrokersWholesalerChannelRetailerChannelDirectChannelAgent/BrokerChannel Channels for Consumer Products 17 Copyright Cengage Learning 2013 All Rights Reserved

LEVEL OF INTENSITY INTENSIVE SELECTIVE EXCLUSIVE

THE SCHOOL YARD BULLY…. Channel Relationships Inherent Conflict – Control – Power

A NEW WAY OF THINKING CHANNEL PARTNERING or “ STRATEGIC SUPPLY ALLIANCES ” Toyota Plant JC Penney’s Shaw Industries – Trust and mutual gain – Who did we read about who was collaborating with vendors?

Supply Chain Management Thinking of it as a unit. (My supply chain is better than your supply chain) Integration (boundary spanning) Logistics

Points From Ch 15 Retailing Definition of Retailing Classification By Ownership – Independent – Chain – Franchise Franchisee Franchisor – Product Franchise – Business Format Franchise