McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved ChapterFifteen Distributing Products Efficiently and Competitively: Supply Chain Management

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Channel of Distribution  Marketing Intermediaries  Wholesaler  Retailer  Brokers  Role of Intermediaries  Create Efficiency  Value vs. Cost

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved The Supply Chain (Figure 15.6)

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Utility Form Time Place Possession Information Service OPEN 24 HRS

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Wholesale Intermediaries  Merchant Wholesalers  Rack Jobbers  Cash-and-Carry  Drop Shippers  Business to Business (B2B) XYZ Warehouse

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Percent of B2B Commerce from Internet *Excludes Service Industries Source: Source: Forrester Research Inc.

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Retail Competition  Price  Service  Location  Selection  Entertainment

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Is it Becoming a Wal-Mart World? *There are 2,985 stores in the U.S. Source: Source: Wal-Mart Annual Report 2000

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Retail Store Distribution  Intensive  Selective  Exclusive

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Identify a Retailer in Your Area  Supermarket  Convenience Store  Discount Store  Department Store  Category Killer  Specialty Store  Factory Outlet  Superstores  Catalog Showroom

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved The Wheel of Retailing PassageofTime 2. Retail Outlet 1. Retail Outlet Starts 3. Retail Outlet 4. New Outlet Enters  Adds Service  Raises Prices  Better Location  Adds Service  Raises Prices  Better Location  Low Price  Limited Service  Out-of-way Location  Low Price  Limited Service  Out-of-way Location  Higher Prices  Higher Status  Higher Prices  Higher Status  Low Price  Limited Service  Low Price  Limited Service

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Non-Store Distribution  E-tailing  Telemarketing  Vending Machines, Kiosks, Carts  Internet  Direct Selling  Multilevel Marketing  Direct Marketing

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved E-Business Expectations Share of company revenues CEOs say come from e-business Now vs. In 5 years Source: Source: USA Today

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Has The Internet Changed Your Shopping Habits? Survey of Americans who have high* Internet use vs. those with low use * high use = 15+ hours per week Source: Source: USA Today

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved What Online Shoppers Bought* Per Month in 2000 *In thousands of dollars Source: Source: Forrester Research

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved What does it take to persuade consumers to buy online? * Survey of 1,944 Web users that had not made an online purchase Source: Source: CIO Web Business, 10/1/1999

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Channel Cooperation  Corporate Distribution  Contractual Distribution  Administered Distribution  Supply Chain Management

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Contractual Distribution  Franchise Systems  Wholesaler-Sponsored Chains  Retail Cooperatives

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved Distribution/Storage Mode  Railroad  Motor Vehicles  Water  Pipeline  Air  Intermodal  Storage  Materials Handling