CHAPTER Day 20 BUS 222

Agenda Questions? Assignment 6 Not Corrected yet – Will be corrected by next class Assignment 7 will be posted by next class Quiz 5 is Corrected – 3 A’s, 3 B’s, 2 C’s, 1 D and 4 F’s Quiz 6 is April 21. One week from today – Chaps 15 & 16, 30 Mins – 10 M/C questions and one extra credit on types of retailers Finish Discussion on Supply Chain and Channel Management Begin Discussion on Retailing and Multichannel Marketing

Rest Of Semester Schedule April 17 – Chap 17 April 21 – Quiz 6 ( Chap 15 & 16) – Chap 18 April 24 – Chap 18 April 28 – Chap 19 – Assignment 7 Due May 1 – Quiz 7 (chaps 17, 18 & 19) May 10 AM – Marketing Plan Presentations May – Marketing Plans due

CHAPTER SUPPLY CHAIN AND CHANNEL MANAGEMENT 15 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OBJECTIVES Supply Chain and Channel Management LO1Define supply chain management LO2Recognize the value added by the supply chain. LO3Describe the flow of merchandise and the flow of information in the supply chain. LO4Describe how supply chains are managed.

Inventory Management Through Just-In-Time SystemsJust-In-Time Systems Just-in-time (JIT) Quick response (QR) Courtesy Tubular Steel, Inc.

Benefits of JIT Systems Reduced lead time Increased product availability and lower inventory investment James Leynse/Corbis

1. How does merchandise flow through a typical supply chain? 2. Why have just-in-time supply chain systems become so popular? Check Yourself

Managing the Marketing Channel and Supply Chain Supply chain or channel conflict Courtesy The Stanley Works

Managing the Marketing Channel and Supply Chain through Vertical Marketing Systems Independent or conventional supply chain

McDonald’s Vertical Marketing/Supply Chain

Types of Vertical Marketing Systems Independent or conventional supply chain Administered vertical marketing system Contractual vertical marketing system Corporate vertical marketing system

Managing Marketing Channels and Supply Chains Through Strategic RelationshipsStrategic Relationships Mutual Trust Open Communications Common GoalsInterdependence Credible Commitments

Relationship of supply chain members Used by Permission of Deutsch Inc as Agent for National Fluid Milk Processor Promotion Board

1. What are the differences between the three types of vertical marketing systems? 2. How do firms develop strong strategic partnerships with their supply chain partners? Check Yourself

CHAPTER RETAILING AND MULTICHANNEL MARKETING 16 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OBJECTIVES Retailing and Multichannel Marketing LO1Discuss the four factors manufacturers should consider as they develop their strategy for working with retailers. LO2Outline the considerations associated with choosing retail partners. LO3List the three levels of distribution intensity. LO4Describe the various types of retailers. LO5Describe the components of a retail strategy. LO6Identify the benefits of stores. LO7Identify the benefits of multichannel retailing. LO8Detail the challenges of multichannel retailing.

Factors for Establishing a Relationship with Retailers

Choosing a Retail Partner Channel Member Characteristics Customer expectations Channel Structure Distribution Intensity

Choosing Retail Partners Channel Structure Degree of vertical integration Manufacturers brand Power of manufacturer and retailer ©M Hruby

Choosing Retail Partners Customer Expectations

Choosing Retail Partners Channel Member Characteristics Larger firms Less likely to use supply chain intermediaries Can gain more control, be more efficient, and save money.

Choosing Retail Partners Distribution Intensity (number of partners) IntensiveExclusiveSelective ©Jeff Greenberg/PhotoEdit ©Susan Van Etten/PhotoEdit

Distribution Intensity Why might Birkenstock choose an exclusive distribution intensity? Courtesy Birkenstock USA

Check Yourself 1. What issues should manufacturers consider when choosing retail partners? 2. What is the difference between intensive, exclusive, and selective levels of distribution intensity?

Retailer’s Reaction? How do you expect retailers would respond to this? Courtesy wwwadbustersorgwwwadbustersorg

Types of Retailers

Food Retailers Peapod Website

General Merchandise Retailers Broad variety and deep assortment Department Stores Broad variety at low prices Full-line Discount Limited merchandise with service in small store Specialty Specialty for pharmaceutical and heath Drugstores Discount with narrow but deep assortment Category Specialist Full line, limited, very low prices Extreme value Inconsistent assortment of brand name at low prices Off-Price

Kmart and Sears

GNC Private Brands Courtesy GNC Corporation

Service Retailers

1. What strategies distinguish the different types of food retailers? 2. What strategies distinguish the different types of general merchandise retailers? 3. Are organizations that provide services to consumers considered to be retailers? Check Yourself

Developing a Retail Strategy Using the Four P’s: Product Providing the right mix of merchandise and services Providing the right mix of merchandise and services AP Photo/David Kohl

Price Price defines the value of both the merchandise and the service provided Build-a-Bear Workshop Commercial Courtesy DDB - London

Promotion Retailers use a wide variety of promotions, both within their retail environment and through mass media Retailers use a wide variety of promotions, both within their retail environment and through mass media Courtesy Bass Pro Shops AP Photo/MarkHumphrey

Place Convenience is a key ingredient to success Convenience is a key ingredient to success ©M Hruby The McGraw-Hill Companies, Inc/ Jill Braaten, photographer

Wal-Mart Faces Biggest Civil Rights Suits

Benefits of Stores for Consumers BrowsingTouching and FeelingPersonal ServiceCash and CreditEntertainment and Social InteractionInstant GratificationRisk Reduction

Benefits of the Internet and Multichannel Retailing Deeper and Broader Selection Personalization Gain Insights into Consumer Shopping Behavior Increase Customer Satisfaction and Loyalty Expand Market Presence

How does the Internet Improve Multichannel Shopping? Courtesy LL Bean

Perceived Risk in Internet Shopping Courtesy Zafu

Effective Multichannel Marketing Integrated CRM Brand Image Pricing Supply Chain