1. Making and Delivering Value

2. Generic Value Chain

3. Supply Chain Management
Software programs
help to manage the
supply chain

4. Supply Chain Management
The supply chain includes all the firms that engage in activities that are necessary to convert raw materials into a good or service and put it in the hands of the consumer or business customer
Supply chain management is the management of flows among the firms in a supply chain to maximize total profitability

5. Supply Chain

6. What is a Distribution Channel?
Series of firms or individuals that facilitate the movement of a product from the producer to the final customer
Direct
Indirect

7. Functions of Distribution Channels
Time, place, and ownership utilities
Logistics functions
Transportation and storage functions
Efficiency creation
Facilitating functions
Repair and maintenance functions
Risk-taking
Communications and transaction functions

8. Supermarkets as Channel Members

9. Creating Efficiencies
Breaking bulk - channel members purchase large quantities from manufacturers and sell smaller quantities to many different customers
Creating assortments - channel members provide a variety of products in one location

10. Reducing Transactions

11. The Internet
Even small firms with limited resources can enjoy competitive advantages by making products available to customers around the globe at a very low cost
Disintermediation - process by which traditional intermediaries are eliminated as companies question the value added by layers in the distribution channel

12. Types of Wholesaling Intermediaries
Wholesaling intermediaries are firms that handle the flow of products from the manufacturer to retailer or business user
Independent
Manufacturer owned

13. Independent Intermediaries
Merchant wholesalers
Full-service
Limited-service
Cash-and-carry wholesalers
Truck jobbers
Drop shippers
Mail-order wholesalers
Rack jobbers
Merchandise Agents or Brokers
Manufacturers’ agents
Selling agents
Commission merchants
Merchandise brokers

14. Rack Jobbers

15. Wholesalers

16. Manufacturer-Owned Intermediaries
Sales Branches
Sales Offices
Manufacturers’
Showrooms

17. Independent Intermediaries

18. Types of Distribution Channels

19. Types of Distribution Channels
Consumer channels
Direct
Manufacturer-retailer-consumer
Manufacturer-wholesaler-retailer-consumer
Business-to-business channels
Manufacturer-industrial distributor-business customer

20. Consumer Channels

21. B2B Channels

22. Dual Distribution Systems
Multiple channel usage
Example:
pharmaceutical industry sells to hospitals, clinics, and organizational customers directly and to consumers indirectly through drug retailers

23. Dual Distribution Systems

24. Steps in Distribution Planning

25. Vertical System

26. Vertical Marketing Systems
Administered
Corporate
Contractual

27. Contractual VMS Wholesaler-Sponsored Retailer-Cooperative
Franchise Organizations

28. Distribution Intensity
Decision Factors:
Company,
Customers,
Channels,
Constraints, and
Competition
Intensive, Exclusive, or Selective Distribution

29. Exclusive Distribution

30. Selective Distribution

31. Selective Distribution

32. Intensive Distribution

33. Managing the Channel Selecting channel partners
Managing the channel of distribution
Channel leader is the dominant firm that controls the channel
Channel leaders have some form of power relative to other members
Economic
Reward
Legitimate

34. Logistics
Process of designing, managing, and improving the movement of products through the supply chain
purchasing
manufacturing
storage
transport

35. Logistics and Customer Satisfaction
Traditionally, logistics was thought of as physical distribution
order processing, warehousing, materials handling, transportation, and inventory control
objective to deliver product at lowest cost
Now, customers’ goals become the logistics provider’s goals

36. Logistics Functions Order Processing Materials Warehousing Handling
Inventory
Control
Transportation

37. Transportation Mode Considerations
Dependability
Cost
Speed of Delivery
Accessibility
Capability
Traceability

38. Modes of Transportation
Water
Internet
Pipeline
Truck
Rail
Air

39. Water Transportation Water transportation is best for large, bulky,
nonperishable goods