1. Marketing Channels and Supply Chain Management10
chapter
Prepared by
Deborah Baker
Texas Christian University
Chapter 10 Version 3e

2. chapter 10 Learning Objectives
1. Explain what a marketing channel is and why intermediaries are needed.
2. Define the types of channel intermediaries and describe their functions and activities. 10
chapter
Chapter 10 Version 3e

3. Learning Objectives (continued)
3. Describe the channel structures for consumer and business-to-business products and discuss alternative channel arrangements.
4. Define supply chain management and discuss its benefits.
5. Discuss the issues that influence channel strategy. 10
chapter
Chapter 10 Version 3e

4. Learning Objectives (continued)
6. Explain channel leadership, conflict, and partnering.
7. Describe the logistical components of the supply chain.
8. Discuss the concept of balancing logistics service and cost. 10
chapter
Chapter 10 Version 3e

5. Learning Objectives (continued)
9. Discuss new technology and emerging trends in supply chain management.
10. Discuss channels and distribution decisions in global markets.
11. Identify the special problems and opportunities associated with distribution in service organizations. 10
chapter
Chapter 10 Version 3e

6. Explain what a marketing channel is and why intermediaries are needed.1
Learning Objective
Explain what a marketing channel
is and why intermediaries are needed.
Chapter 10 Version 3e

7. 1 Marketing Channels Marketing Channel Supply Chain
A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.
The connected chain of all the business entities, both internal and external to the company, that perform or support the logistics function.
Chapter 10 Version 3e

8. Marketing Channel Functions1
Marketing Channel Functions
Specialization and
Division of Labor
Channels
Fulfill
Three
Important
Functions
Overcoming
Discrepancies
Providing Contact
Efficiency
Chapter 10 Version 3e

9. Specialization and Division of Labor1
Provides economies of scale
Aids producers who lack resources to market directly
Builds good relationships with customers
Chapter 10 Version 3e

10. Overcoming Discrepancies1
Overcoming Discrepancies
Discrepancy of
Quantity
Assortment
The difference between the amount of product produced and the
amount an end user wants to buy.
The lack of all the items a
customer needs to receive full satisfaction from a product or products.
Chapter 10 Version 3e

11. Overcoming Discrepancies1
Overcoming Discrepancies
Temporal
Discrepancy
Spatial
A situation that occurs when a product is produced but a
customer is not ready to buy it.
The difference between the
location of a producer and the location of widely
scattered markets.
Chapter 10 Version 3e

12. 1 Contact Efficiency Zenith Sony RCA Toshiba Zenith Sony RCA Toshiba
Circuit City
Chapter 10 Version 3e

13. 2 Learning Objective Define the types of channel
intermediaries and describe their
functions and activities.
Chapter 10 Version 3e

14. Channel Intermediaries2
Channel Intermediaries
Retailer
Merchant
Wholesaler
Agents and
Brokers
A channel intermediary that
sells mainly to customers.
An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them.
Wholesaling intermediaries who facilitate the sale of a product by representing channel member.
Chapter 10 Version 3e

15. Channel Intermediaries2
Channel Intermediaries
Retailers
Merchant
Wholesalers
Agents
and
Brokers
Take Title to Goods
Do NOT Take Title to Goods
Chapter 10 Version 3e

16. Channel Functions Performed by Intermediaries2
Contacting/Promotion
Negotiating
Risk Taking
Facilitating Function
Transactional Functions
Logistical
Functions
Researching
Financing
Physically distributing
Storing
Sorting
Chapter 10 Version 3e

17. 2
Logistics
The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption.
Chapter 10 Version 3e

18. 3 Learning Objective Describe the channel structures for consumer and
business-to-business products
and discuss alternative
channel arrangements.
Chapter 10 Version 3e

19. A distribution channel in which producers sell directly to consumers.3
Direct Channel
A distribution channel in which producers sell directly to consumers.
Chapter 10 Version 3e

20. Channels for Consumer Products3
Channels for Consumer Products
Producer
Consumers
Retailers
Wholesalers
Agents or Brokers
Wholesaler
Channel
Retailer
Direct
Agent/Broker
Chapter 10 Version 3e

21. Channels for Business-to-Business Products3
Producer
Industrial User
Industrial Distributor
Agents or
Brokers
Agent/Broker
Channel
Direct
Government Buyer
Industrial Channel
Chapter 10 Version 3e

22. Alternative Channel Arrangements3
Alternative Channel Arrangements
Different Channels May be Used
Multiple Channels
Adaptive Channels
Strategic Channel Alliances
Nontraditional Channels
Chapter 10 Version 3e

23. Define supply chain management and discuss its benefits.4
Learning Objective
Define supply chain management
and discuss its benefits.
Chapter 10 Version 3e

24. Supply Chain Management4
Supply Chain Management
A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption.
Chapter 10 Version 3e

25. Supply Chain Management4
Supply Chain Management
Results of
Supply Chain
Management
Focus on Innovative Solutions
Competitive with focus on
Customer Satisfaction
Synchronized Flow
Customer Value
Chapter 10 Version 3e

26. Role of Supply Chain Management4
Role of Supply Chain Management
Physical flow process
that engineers the
movement of goods
Communicator of
customer demand from
point of sale to supplier
Role of
Supply Chain
Management
Chapter 10 Version 3e

27. Supply Chain Management Activities4
Manage relationships
in the supply chain
Manage the logistical components of the supply chain
Determine channel strategy and
level of distribution intensity
Balance the costs of the supply chain
with the service level demanded by customer
Chapter 10 Version 3e

28. Benefits of Supply Chain Management4
Common Benefits of Supply Chain
Management
Reduced Costs
Improved Service
Enhanced Revenues
Chapter 10 Version 3e

29. Discuss the issues that influence channel strategy.5
Learning Objective
Discuss the issues that
influence channel strategy.
Chapter 10 Version 3e

30. Channel Strategy Decisions5
Channel Strategy Decisions
Issues that Influence Channel Strategy
Producer Factors
Product Factors
Market Factors
Factors
Affecting
Channel
Choice
Exclusive Distribution
Selective Distribution
Intensive Distribution
Levels of Distribution Intensity
Chapter 10 Version 3e

31. Market Factors That Affect5
Market Factors
Market Factors That Affect
Channel Choices
Customer Profiles
Consumer or Industrial
Customer
Size of Market
Geographic Location
Chapter 10 Version 3e

32. Product Factors That Affect5
Product Factors
Product Factors That Affect
Channel Choices
Product Complexity
Product Price
Product Life Cycle
Product Delicacy
Chapter 10 Version 3e

33. 5 Producer Factors Producer Resources Producer Factors That Affect
Channel Choices
Producer Resources
Number of Product Lines
Desire for Channel Control
Chapter 10 Version 3e

34. Levels of Distribution Intensity5
Levels of Distribution Intensity
Intensity Level
Objective
Number of Intermediaries
Intensive
Selective
Exclusive
Achieve mass market selling.
Convenience goods.
Work with selected
intermediaries.
Shopping and some
specialty goods.
Work with single intermediary. Specialty goods and industrial
equipment.
Many
Several
One
Chapter 10 Version 3e

35. Explain channel leadership, conflict, and partnering.6
Learning Objective
Explain channel leadership,
conflict, and partnering.
Chapter 10 Version 3e

36. Managing Channel Relationships6
Managing Channel Relationships
Channel Partnering
Channel Conflict
Channel Leadership
Channel Control
Channel Power
Social Dimensions of Channels
Chapter 10 Version 3e

37. Channel Power, Control, and Leadership6
Channel
Power
Control
Channel Leader
A channel member’s capacity to control or influence the behavior of other channel members
A situation that occurs when one marketing channel member intentionally affects another member’s behavior.
A member of a marketing channel
that exercises authority/power over the activities of other members.
Chapter 10 Version 3e

38. A clash of goals and methods between distribution channel members.6
Channel Conflict
A clash of goals and methods between distribution channel members.
Horizontal
Conflict
Occurs among channel members on the same level
Vertical
Occurs among channel members at different levels
Chapter 10 Version 3e

39. 6
Channel Partnering
The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage.
Chapter 10 Version 3e

40. Transaction- vs. Partnership-Based Firms6
Transaction-Based
Short-term relationships
Multiple suppliers
Adversarial relationships
Price dominates
Minimal supplier investment
Minimal information sharing
Firms are independent
Minimal functional area interaction
Partnership-Based
Long-term relationships
Few suppliers
Cooperative partnerships
Value-added services dominate
High supplier/buyer investment
Extensive information sharing
Firms are interdependent
Extensive functional area interaction
Chapter 10 Version 3e

41. Describe the logistical components7
Learning Objective
Describe the logistical components
of the supply chain.
Chapter 10 Version 3e

42. Integrated Logistical Components of the Supply Chain7
Sourcing & Procurement
Production Scheduling
Order Processing & Customer Service
Inventory Control
Supply Chain Team
Warehouse & Materials Handling
Transportation
Logistics Information System
Chapter 10 Version 3e

43. Sourcing and Procurement7
Sourcing and Procurement
Negotiate
Service Levels
Price
Select
Suppliers
Develop
Specifications
Plan Purchasing Strategies
Role of
Purchasing
Departments
Chapter 10 Version 3e

44. Production Scheduling7
Production Scheduling
Push/Pull Strategy
Traditional Focus
Push
Start of Production
Manufacturing
Inventory-Based
Mass Production
Customer Focus
Pull
Customer-Order Based
Mass Customization
Chapter 10 Version 3e

45. Just-in-Time Manufacturing7
Just-in-Time Manufacturing
A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line.
JIT
Chapter 10 Version 3e

46. 7 Benefits of JIT Reduces raw material inventories Shortens lead times
Creates better supplier relationships
Reduces production and storeroom costs
Reduces paperwork
Chapter 10 Version 3e

47. Electronic Data Interchange7
Electronic Data Interchange
Information technology that replaces paper documents that accompany business transactions.
EDI
Chapter 10 Version 3e

48. Inventory Control System7
Inventory Control System
A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand.
Chapter 10 Version 3e

49. Warehouse and Materials-Handling7
Functions of
Materials
Handling
Receive goods into
warehouse
Dispatch the goods to
temporary storage
Recall, select, or pick the goods for shipment
Identify, sort and label goods
Chapter 10 Version 3e

50. 7 Transportation Criteria for Transportation Mode Choice Cost
Transit Time
Reliability
Capability
Accessibility
Traceability
Criteria
for
Transportation Mode
Choice
Chapter 10 Version 3e

51. Criteria for Ranking Modes of Transportation7
Relative
Cost
Transit
Time
Reliability
Capability
Accessibility
Traceability
Highest
Lowest
Air
Water
Pipe
Rail
Truck
Chapter 10 Version 3e

52. balancing logistics service and cost.8
Learning Objective
Discuss the concept of
balancing logistics service and cost.
Chapter 10 Version 3e

53. 8
Logistics Service
Interrelated activities performed by a member of the supply chain to ensure that the right product is in the right place at the right time.
Chapter 10 Version 3e

54. Logistical Competencies8
Logistical Competencies
Devise logistics service strategies as a means of competitive differentiation
Integrate members of supply chain to achieve operating excellence
Respond quickly to changing logistical requirements
Constantly monitor all aspects of the supply chain
Chapter 10 Version 3e

55. Discuss new technology supply chain management.9
Learning Objective
Discuss new technology
and emerging trends in
supply chain management.
Chapter 10 Version 3e

56. Trends in Supply Chain Management9
Trends
Affecting the
Logistics
Industry
Advanced
Computer Technology
Outsourcing of Logistics Functions
Electronic Distribution
Chapter 10 Version 3e

57. Discuss channels and distribution decisions in global markets.10
Learning Objective
Discuss channels and distribution
decisions in global markets.
Chapter 10 Version 3e

58. Channels and Distribution Decisions for Global Markets10
Channel structure differs
Channel types differ
“Gray” marketing channels
Global Channel
Development
Global Supply Chain Management
Awareness of trade legalities
Transportation Infrastructure
Chapter 10 Version 3e

59. 11 Learning Objective Identify the special problems and
opportunities associated with
distribution in service organizations.
Chapter 10 Version 3e

60. Channels and Distribution Decisions for Services11
Areas of Focus
for Service Distribution
Minimizing wait times
Managing service capacity
Improving delivery
through new channels
Chapter 10 Version 3e