2. If you see a train of coal
going by:
That’s marketing!

3. Marketing Channel
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.
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4. A Transaction has not occurred
until a transaction has occurred!

5. The variety of terms are used for intermediaries that vary in specificity and use in different markets
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6. Marketing channel intermediaries perform three functions:
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7. 1. Consumer Products Channels
Direct Channel
Indirect Channel
Retailers
WholesalersRetailers
AgentsWholesalersRetailers
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8. Common marketing channels for consumer products and services
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9. 2. Business Products Channels
Direct Channel
Indirect Channel
Industrial Distributor
Agents
AgentsIndustrial Distributors
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10. Common marketing channels for business products and services
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11. Electronic Marketing Channels
3. Other Channels
Electronic Marketing Channels
Direct Marketing Channels
Multichannel Marketing
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12. Consumer electronic marketing channels are similar to those for consumer products and services
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13. Multichannel Marketing Multichannel marketing:
involves the blending of communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online.
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14. Dual Distribution
Dual distribution: involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
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15. Dual Distribution
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16. Strategic Channel Alliances
An agreement between two or more parties to pursue a set of agreed upon objectives need while remaining independent organizations.
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17. Some other definitions: Merchant wholesalers:
Independent owned business with title of goods and
assumes all roles.
Full-service wholesalers: Perform all services
General-merchandise: Carry width but not depth of products
Limited-merchandise: Carry depth but not width

18. Some other definitions: Merchant wholesalers:
Independent owned business with title of goods and
assumes all roles.
Specialty-line: Single product line
Rack jobbers: Own and maintain
display racks in stores

19. Limited-service wholesalers:
Some definitions:
Limited-service wholesalers:
Independent owned business with title of goods and
specializes in a few roles.
Cash-and-carry: Limited… whose customers pay cash and
furnish their own transportation

20. Limited-service wholesalers:
Some definitions:
Limited-service wholesalers:
Independent owned business with title of goods and
specializes in a few roles.
Truck: Limited… transport goods directly to customers
Drop shippers: Limited…is a supply chain management technique
in which the retailer does not keep goods in stock, but instead transfers
customer orders and shipment details to either the manufacturer
or a wholesaler, who then ships the goods directly to the customer.
The majority of retailers make their profit on the difference between the wholesale
and retail price or the retailers earn an agreed percentage of the sales in
commission, paid by the wholesaler to the retailer.

21. Some definitions: Middle agents:
Agents: Represent buyers or sellers on a permanent basis
Brokers: Represent buyers or sellers on a temporary basis
Manufacturing agents: Represent more than one seller
and offers a complete product line
Selling agents: Market a complete product line for a manufacture

22. Vertical Marketing Systems
Vertical marketing systems: are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.
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23. Three types of vertical marketing systems: 1) corporate, 2) contractual (most popular), and 3) administered
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24. VERICAL MARKETING SYSTEMS
1. Corporate Systems
Forward Integration
Backward Integration
2. Contractual Systems
Wholesaler-Sponsored Voluntary Chains
Retailer-Sponsored Cooperatives
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25. VERICAL MARKETING SYSTEMS
Contractual Systems
Franchising
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26. VERICAL MARKETING SYSTEMS
3. Administrated Systems
A coordinated system of distribution channel organization controlled by the power and size of one member of the channel system rather than by common ownership or contractual ties.
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27. CHANNEL MANAGEMENT CHANNEL CHOICE CONSIDERATIONS
Target Market Coverage (Density)
Intensive Distribution
Exclusive Distribution
Gucci
Selective Distribution
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28. Intensive Distribution
is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.
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29. Exclusive Distribution
is a level of distribution density whereby only one retailer in a specific geographical area carries the firm’s products.
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30. Selective Distribution
is a level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products.
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31. Two important terms
Logistics
Supply Chain
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32. Logistics
Logistics:
consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.
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33. Supply Chain
A supply chain:
consists of a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users.
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34. Relating logistics management and supply chain management to networks and channels
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35. The automotive supply chain includes thousands of firms that provide the 5,000 or so parts in a typical car
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36. CHANNEL MANAGEMENT CHANNEL CHOICE CONSIDERATIONS
Buyer Requirements
Information
Variety
Convenience
Pre- or Post-Sale Service
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37. Jiffy Lube and Petco What buyer requirements have been satisfied?
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38. CHANNEL MANAGEMENT CHANNEL CHOICE CONSIDERATIONS
Profitability
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39. Channel Conflict
Channel conflict:
arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.
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40. CHANNEL MANAGEMENT CHANNEL RELATIONSHIPS
Sources of Channel Conflict
Vertical Conflict
Horizontal Conflict
Disintermediation
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41. Disintermediation
Disintermediation:
involves channel conflict that arises when a channel member bypasses another member and sells or buys products direct.
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42. Supply Chain Management
The Institute for Supply Management
“the design and management of seamless (aka supply chain integration), value-added processes across organizational boundaries to meet needs of end customers”.
Council of Supply Chain Management Professionals (Council of Logistics Management until Dec 2004):
“integration of key business processes from end user through original suppliers that provides products, services, and information, that add value for customers and other stakeholders”.

43. CHANNEL MANAGEMENT CHANNEL RELATIONSHIPS
Channel Captain
Like a marriage!
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44. CHANNEL MANAGEMENT CHANNEL RELATIONSHIPS
Channel Influence
Economic Who has the power?
Expertise
Identification
Legitimate Right
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45. CHANNEL MANAGEMENT CHANNEL RELATIONSHIPS
Legal Considerations
Dual Distribution
Tying Arrangements
Vertical Integration
Full-Line Forcing
Exclusive Dealing
Refusal to Deal
Resale Restrictions
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46. The Clayton Act and Sherman Act place legal restrictions on specific marketing channel strategies and practices
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47. ….SCM Objectives: Importance: Value Profitability Complexity
Efficiencies
Competencies

48. Distribution
Connection between individuals/firms that contributes to the occurrence of an exchange
Basic function: create customer value/add value to customer by reducing spacial separation – physical and time distance – between point of production and point of consumption
Place and time utility

49. Value Addition Contactual efficiency Routinization Categorizing
Assembly/assortment
Breaking bulk/accumulating bulk
Transportation
Processing/storage
Risk reduction
Service/repairs
Reverse logistics

50. Distribution Design Decisions
Level 1(governance structure): direct distribution v/s conventional v/s vertical marketing systems.
Corporate
Contractual
Administered

51. ..design decisions: Level 2-Intensity of Distribution

52. Distribution Strategies
Two fundamental distribution strategies:
Items can be directly shipped from the supplier or manufacturer to end customer
Use intermediate points

53. Direct Shipment Distribution Strategies
Advantages:
expenses of operating a distribution center
Lead times.
Disadvantages:
Risk-pooling effects
Manufacturer and distributor transportation costs

54. Intermediate Inventory Storage Point Strategies
Traditional warehousing strategy
Cross-docking strategy
Centralized pooling and transshipment strategies

55. Traditional Facilities
factors
Centralized vs. Decentralized Management
Central vs. Local Facilities

56. Central vs. Local Facilities
Centralized facilities
Employ both fewer warehouses and distribution centers
Facilities are located further from customers.
Other factors:
Safety stock.
Overhead.
Economies of scale
Lead time.
Service.
Transportation costs.

57. Cross-Docking Popularized by Wal-Mart
Warehouses function as inventory coordination points rather than as inventory storage points.
Goods spend very little time in storage at the warehouse

58. Target Distribution Center

59. Transshipment
Shipment of items between different facilities at the same level in the demand chain to meet some immediate need
Occurs mostly at the retail level
advanced information systems
Reasonable shipping costs
Integrated supply chain

60. Distribution-system Performance and customer-facing capabilities
Performance evaluation on two dimensions:
Level of customer service
Cost of providing customer service
Capabilities
Responsiveness
efficiency

61. Supply Chain strategy should be aligned with Marketing Strategy
Understand the Customer
Understand the Supply Chain
Harmonize the Supply Chain with the Marketing Strategy
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62. 1. Total Logistics Cost Concept
2. Customer Service Concept
These must be balanced!
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63. Supply chain managers balance five total logistics cost factors against four customer service factors
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64. TRANSPORTATION MODES Railroads Unit Train Intermodal Transportation
Piggyback or Trailer on Flat Car
Containers
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65. Motor Carriers (Trucks)
TRANSPORTATION MODES
Motor Carriers (Trucks)
Air Carriers and Express Companies
Freight Forwarders
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66. TRANSPORTATION MODES
Pipelines
Water Carriers
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67. Advantages and disadvantages of five transportation modes
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68. WAREHOUSING AND MATERIALS HANDLING
Storage Warehouses
Distribution Centers
Materials Handling
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69. CLOSING THE LOOP:
Reverse Logistics
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70. Reverse Logistics
Reverse logistics:
is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution,or disposal.
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