1. Principles of Marketing - UNBSJ
BA 2303
Principles of Marketing - UNBSJ
Managing Marketing Channels and Supply Chains
Instructor – Terry Conrod

2. Learning Objectives BA 2303
Explain what is meant by a marketing channel of distribution and why intermediaries are often needed.
Distinguish among traditional marketing channels, electronic marketing channels, multichannel distribution, and different types of vertical marketing systems.
Describe factors considered by marketing executives when selecting and managing a marketing channel.
Recognize how conflict, co-operation, and legal considerations affect marketing channels relationships.
Recognize the relationship among marketing channels, logistics, and supply chain management, and how a company’s supply chain aligns with its marketing strategy.
Identify the major logistics costs and customer service factors that managers consider when making supply chain decisions.
Describe the key logistics functions in a supply chain.

3. NATURE AND IMPORTANCE OF MARKETING CHANNELS
BA 2303
NATURE AND IMPORTANCE OF MARKETING CHANNELS
Defining Marketing Channels of Distribution
Marketing Channel
Value Created by Intermediaries
Functions Performed by Intermediaries
Consumer Benefits from Intermediaries

4. Terms used for marketing intermediaries
BA 2303

5. How intermediaries minimize transactions
BA 2303

6. Marketing channel functions performed by intermediaries
BA 2303

7. What is meant by a marketing channel?
BA 2303
Concept Check
What is meant by a marketing channel?
Answer:
A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.

8. What are the three basic functions performed by intermediaries?
Concept Check
What are the three basic functions performed by intermediaries?
Answer:
Intermediaries perform three marketing channel functions: (1) Transactional function, (2) Logistical function, and (3) Facilitating function

9. CHANNEL STRUCTURE AND ORGANIZATION
BA 2303
CHANNEL STRUCTURE AND ORGANIZATION
Marketing Channels for Consumer Goods and Services
Direct channel
Indirect channels
Marketing Channels for Business Goods and Services
Business distributor
Electronic Marketing Channels
Direct Marketing Channels
Multiple Channels and Strategic Alliances
Multichannel distribution
Strategic channel alliances

10. Common marketing channels for consumer goods and services
BA 2303
Common marketing channels for consumer goods and services

11. Common marketing channels for business goods and services
BA 2303
Common marketing channels for business goods and services

12. Representative electronic marketing channels
BA 2303

13. CHANNEL STRUCTURE AND ORGANIZATION
BA 2303
CHANNEL STRUCTURE AND ORGANIZATION
A Closer Look at Channel Intermediaries
Merchant Wholesalers
Agents and Brokers
Manufacturer’s agents
Selling agents
Brokers
Manufacturer’s Branches and Offices

14. CHANNEL STRUCTURE AND ORGANIZATION
BA 2303
CHANNEL STRUCTURE AND ORGANIZATION
Vertical Marketing Systems and Channel Partnerships
Corporate Systems
Contractual Systems
Franchising
Administered Systems

15. Types of vertical marketing systems
BA 2303

16. What is the difference between a direct and an indirect channel?
BA 2303
Concept Check
What is the difference between a direct and an indirect channel?
Answer:
A direct channel is when a producer and ultimate consumers deal directly with each other. An indirect channel occurs when intermediaries are inserted between the producer and consumers, and numerous channel functions are performed.

17. BA 2303
Concept Check
What is the principal distinction between a corporate vertical marketing system and an administered vertical marketing system?
Answer:
A corporate vertical marketing system is the single ownership of a combination of successive stages of production and distribution. Under an administered vertical marketing system, co-ordination is achieved at successive stages of product and distribution by the size and influence of one channel member rather than through ownership.

18. CHANNEL CHOICE AND MANAGEMENT
BA 2303
CHANNEL CHOICE AND MANAGEMENT
Factors Affecting Channel Choice and Management
Environmental Factors
Consumer Factors
Product Factors
Company Factors

19. CHANNEL CHOICE AND MANAGEMENT
BA 2303
CHANNEL CHOICE AND MANAGEMENT
Channel Design Considerations
Target Market Coverage
Satisfying Buyer Requirements
Profitability
Global Dimensions of Marketing Channels

20. CHANNEL CHOICE AND MANAGEMENT
BA 2303
CHANNEL CHOICE AND MANAGEMENT
Channel Relationships: Conflict, Co-operation, and Law
Conflict in Marketing Channels
Disintermediation
Co-operation in Marketing Channels
Channel captain
Legal Considerations

21. What are the three degrees of distribution density?
BA 2303
Concept Check
What are the three degrees of distribution density?
Answer:
The three degrees of distribution density (or target market coverage) are: (1) Intensive distribution, (2) Exclusive distribution, and (3) Selective distribution

22. BA 2303
Concept Check
What are the three questions marketing executives consider when choosing a marketing channel and intermediaries?
1. Which channel and intermediaries will provide the best coverage of the target market?
2. Which channel and intermediaries will best satisfy the buying requirements of the target markets?
3. Which channel and intermediaries will be the most profitable?

23. What is meant by “exclusive dealing”?
BA 2303
Concept Check
What is meant by “exclusive dealing”?
Answer:
Exclusive dealing exists when a supplier requires channel members to sell only its products or restricts distributors from selling directly competitive products.

24. LOGISTICS AND SUPPLY CHAIN MANAGEMENT
BA 2303
LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics
Logistics management
Supply chain
Supply chain management

25. Logistics management and supply chain management
BA 2303
Logistics management and supply chain management
© 2008 McGraw-Hill Ryerson Ltd. All rights reserved.

26. LOGISTICS AND SUPPLY CHAIN MANAGEMENT
BA 2303
LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain
The automotive supply chain

27. LOGISTICS AND SUPPLY CHAIN MANAGEMENT
BA 2303
LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Supply Chain Management and Marketing Strategy
Aligning a Supply Chain with Marketing Strategy
Understand the customer
Understand the supply chain
Harmonize the supply chain with the marketing strategy

28. BA 2303
Concept Check
What is the principal difference between a marketing channel and a supply chain?
Answer:
A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users. A marketing channel are people or firms involved in the process of marking a product or service available for use or consumption by consumers or industrial users.

29. What three steps does the choice of a supply chain involve?
BA 2303
Concept Check
What three steps does the choice of a supply chain involve?
Answer:
(1) Understand the customer; (2) Understand the supply chain, and (3) Harmonize the supply chain with the marketing strategy.

30. INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN
BA 2303
INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN
Information’s Role in Supply Chain Responsiveness and Efficiency
Electronic data interchanges (EDI)
Enterprise Resource Planning (ERP)
Total Logistics Cost Concept

31. INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN
BA 2303
INFORMATION AND LOGISTICS MANAGEMENT OBJECTIVE IN A SUPPLY CHAIN
Customer Service Concept
Time
Dependability
Communication
Convenience

32. © 2008 McGraw-Hill Ryerson Ltd. All rights reserved.
BA 2303
Supply chain managers balance total logistics cost factors against customer service factors
© 2008 McGraw-Hill Ryerson Ltd. All rights reserved.

33. minimize logistics costs while delivering maximum customer service.
BA 2303
Concept Check
The objective of information and logistics management in a supply chain is to:
Answer:
minimize logistics costs while delivering maximum customer service.

34. BA 2303
Concept Check
How does consumer demand information increase supply chain responsiveness and efficiency?
Answer:
Continuing advances in information technology make it possible to track logistics activities and customer service variables and manage them for efficiency and responsiveness.

35. KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
BA 2303
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
Third-party logistics providers
Transportation
Warehousing and Material Handling
Order Processing

36. Advantages and disadvantages of five modes of transportation
BA 2303
Advantages and disadvantages of five modes of transportation
© 2008 McGraw-Hill Ryerson Ltd. All rights reserved.

37. KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
BA 2303
KEY LOGISTICS FUNCTIONS IN A SUPPLY CHAIN
Inventory Management
Reasons for Inventory
Inventory Costs
Supply Chain Inventory Strategies
Just-in-time (JIT) concept
Vendor-managed inventory (VMI)
Closing the Loop: Reverse Logistics

38. What are the basic trade-offs between the modes of transportation?
Concept Check
What are the basic trade-offs between the modes of transportation?
Answer: Some relative advantages and disadvantages among the different modes of transportation: (1) Rail - full capability, extensive routes, some damage problems, slow, (2) Truck - Complete pickup and delivery, fast, size and weight restrictions, weather sensitive, (3) Air - Low damage, frequent departures, high cost, limited capabilities, (4) Pipeline - Very reliable, frequent departures, limited accessibility, slow, and (5) Water - Low cost, huge capacities, limited routes and schedules, weather sensitive

39. BA 2303
Concept Check
What types of inventory should use storage warehouses and which type should use distribution centres?
Answer:
Storage warehouses are often used for the aging of products or in storing household goods. In the meanwhile, distribution centres allow firms to hold their stock in decentralized locations. Paint companies like to use them, as do manufacturer sales offices and order processing centres.

40. What are the strengths and weaknesses of a just-in- time system?
BA 2303
Concept Check
What are the strengths and weaknesses of a just-in- time system?
Answer:
Strengths of a just-in-time (JIT) system are: (1) Low inventories and (2) Fast, on-time delivery.
Weaknesses of JIT: (1) Relies on accurate demand forecasting and (2) Dependence on computerized system

41. BA 2303
Marketing Channel
Individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.

42. BA 2303
Direct Channel
A marketing channel where a producer and ultimate consumer deal directly with each other.

43. BA 2303
Indirect Channels
A marketing channel where intermediaries are inserted between the producer and consumers and perform numerous channel functions.

44. Electronic Marketing Channels
BA 2303
Electronic Marketing Channels
Employ the Internet to make goods and services available for consumption or sue by consumers or industrial buyers.

45. Direct Marketing Channels
BA 2303
Direct Marketing Channels
Allow consumers to buy products by interacting with various advertising media without a face-to-face meeting with a salesperson.

46. Strategic Channel Alliances
BA 2303
Strategic Channel Alliances
A practice whereby one firm’s marketing channel is used to sell another firm’s products.

47. BA 2303
Merchant Wholesalers
Independently owned firms that take title to the merchandise they handle.

48. Manufacturer’s Agents
BA 2303
Manufacturer’s Agents
Work for several producers and carry non- competitive, complementary merchandise in an exclusive territory.

49. BA 2303
Selling Agents
Represents a single producer and is responsible for the entire marketing function of that product.

50. BA 2303
Brokers
Independent firms or individuals whose principal function is to bring buyers and sellers together to make sales.

51. Vertical Marketing Systems
BA 2303
Vertical Marketing Systems
Professionally managed and centrally co-ordinated marketing channels designed to achieve channel economies and maximum marketing impact.

52. BA 2303
Franchising
Contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchise to operate a certain type of business under an established name and according to specific rules.

53. BA 2303
Channel Conflict
Arises when one channel member believes another channel member is engaged in behaviour that prevents it from meeting its goals.

54. BA 2303
Disintermediation
Channel conflict that arises when a channel member bypasses another member and sells or buys products direct.

55. BA 2303
Business Distributor
Performs a variety of marketing channel functions, including selling, stocking, delivering a full product assortment, and financing.

56. BA 2303
Customer Service
The ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.

57. Just-in-Time (JIT) Concept
BA 2303
Just-in-Time (JIT) Concept
An inventory supply system that operates with very low inventories and requires fast, on-time delivery.

58. BA 2303
Logistics Management
The practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.

59. BA 2303
Materials Handling
Moving goods over short distances into, within, and out of warehouses and manufacturing plants.

60. Multichannel Distribution
BA 2303
Multichannel Distribution
An arrangement whereby a firm reaches buyers by employing two or more different types of marketing channels.

61. BA 2303
Reverse Logistics
A process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal.

62. BA 2303
Supply Chain
A sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users.

63. Supply Chain Management
BA 2303
Supply Chain Management
The integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to customers.

64. BA 2303
Total Logistics Cost
Expenses associated with transportation, materials handling and warehousing, inventory, stockouts, order processing, and return goods handling.

65. Vendor-Managed Inventory
BA 2303
Vendor-Managed Inventory
An inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.