1. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-1 ChapterFifteen Distributing Products Efficiently and Competitively: Supply Chain Management

2. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-2 Channel of Distribution  Marketing Intermediaries  Wholesaler  Retailer  Brokers  Role of Intermediaries  Create Efficiency  Value vs. Cost

3. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-3 The Supply Chain (Figure 15.6)

4. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-4 Utility Form Time Place Possession Information Service OPEN 24 HRS

5. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-5 Wholesale Intermediaries  Merchant Wholesalers  Rack Jobbers  Cash-and-Carry  Drop Shippers  Business to Business (B2B) XYZ Warehouse

6. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-6 Percent of B2B Commerce from Internet *Excludes Service Industries Source: Source: Forrester Research Inc.

7. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-7 Retail Competition  Price  Service  Location  Selection  Entertainment

8. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-8 Is it Becoming a Wal-Mart World? *There are 2,985 stores in the U.S. Source: Source: Wal-Mart Annual Report 2000

9. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-9 Retail Store Distribution  Intensive  Selective  Exclusive

10. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-10 Identify a Retailer in Your Area  Supermarket  Convenience Store  Discount Store  Department Store  Category Killer  Specialty Store  Factory Outlet  Superstores  Catalog Showroom

11. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-11 The Wheel of Retailing PassageofTime 2. Retail Outlet 1. Retail Outlet Starts 3. Retail Outlet 4. New Outlet Enters  Adds Service  Raises Prices  Better Location  Adds Service  Raises Prices  Better Location  Low Price  Limited Service  Out-of-way Location  Low Price  Limited Service  Out-of-way Location  Higher Prices  Higher Status  Higher Prices  Higher Status  Low Price  Limited Service  Low Price  Limited Service

12. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-12 Non-Store Distribution  E-tailing  Telemarketing  Vending Machines, Kiosks, Carts  Internet  Direct Selling  Multilevel Marketing  Direct Marketing

13. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-13 E-Business Expectations Share of company revenues CEOs say come from e-business Now vs. In 5 years Source: Source: USA Today

14. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-14 Has The Internet Changed Your Shopping Habits? Survey of Americans who have high* Internet use vs. those with low use * high use = 15+ hours per week Source: Source: USA Today

15. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-15 What Online Shoppers Bought* Per Month in 2000 *In thousands of dollars Source: Source: Forrester Research

16. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-16 What does it take to persuade consumers to buy online? * Survey of 1,944 Web users that had not made an online purchase Source: Source: CIO Web Business, 10/1/1999

17. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-17 Channel Cooperation  Corporate Distribution  Contractual Distribution  Administered Distribution  Supply Chain Management

18. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-18 Contractual Distribution  Franchise Systems  Wholesaler-Sponsored Chains  Retail Cooperatives

19. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 15-19 Distribution/Storage Mode  Railroad  Motor Vehicles  Water  Pipeline  Air  Intermodal  Storage  Materials Handling