1. Chapter 8 Distribution channels and logistics management

2. The learning objectives
The nature of distribution channels
Channel behavior and organization
Channel design decisions
Channel management decision
Physical distribution and logistics management

3. 1.The nature of distribution channels
What is distribution?
Why are marketing intermediaries used?
The function of distribution channel
Channel level

4. What is distribution channel?
A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

5. How a Distributor Reduces the Number of Channel Transactions
A. Number of contacts
without a distributor
M x C = 3 X 3 = 9 1 3 2 4 5 6 7 8 9
= Manufacturer
= Customer

6. How a Distributor Reduces the Number of Channel Transactions
B. Number of contacts
with a distributor
M x C = = 6
Store 1 2 3 4 5 6
= Manufacturer
= Distributor
= Customer

7. Distribution Channel Functions
Information
Transfer
Communication
Payments
Negotiation
Physical
Distribution
Ordering
Risk Taking
Financing

8. Consumer Marketing Channels
Manufacturer
0-level channel
Consumer
1-level channel
Manufacturer
Retailer
Consumer 
Mfg
2-level channel
Wholesaler
Retailer
Consumer 
Mfg
3-level channel
Wholesaler
Jobber
Retailer
Consumer 

9. Industrial Marketing Channels
Manufacturer
Consumer
Industrial
distributors
Manufacturer’s
representative
Manufacturer’s
sales branch

10. Customers’ Desired Service Levels
Lot size
Waiting time
Spatial convenience
Product variety
Service backup

11. Why are marketing intermediaries used?

12. Distribution channel function
Information
Promotion
Contact
Matching
negotiation

13. Channel level

14. Channel behavior and organization
Channel conflict
Vertical marketing system
Horizontal marketing system
Hybrid marketing systems

15. Common Ownership at Different
Corporate
Common Ownership at Different
Levels of the Channel
Types of Vertical Marketing Systems
Administered
Leadership is Assumed by One or
a Few Dominant Members
Contractual
Contractual Agreement Among
Channel Members

16. Conventional Distribution Channel vs. Vertical Marketing Systems
Manufacturer
Manufacturer
Wholesaler
Wholesaler
Retailer
Retailer
Consumer
Consumer

17. Channel conflict
Horizontal conflict
Vertical conflict

18. Vertical marketing systems
Conventional distribution
VMS
Corporate VMS
Contractual VMS
Administered VMS
Franchise organization

19. Horizontal marketing system

20. Hybrid marketing channel

21. 2.channel design decision
Analyzing consumer service needs
Setting channel objectives and constraints
Identifying major alternatives
Evaluating the major alternatives

22. Identifying major alternative
Types of intermediaries
Number of marketing intermediaries
Responsibilities of channel members

23. Level of sales (dollars)
Break-Even Cost Chart
Selling
costs
(dollars)
Level of sales (dollars)
Manufacturer’s
sales agency
Company
sales force SB

24. Number of marketing intermediaries
Intensive distribution
Exclusive distribution
Selective distribution

25. 3.Channel management Decision
Selecting channel members
Motivating channel members
Evaluating channel members

26. Selecting Training Motivating Evaluating
Channel Management Decisions
FEEDBACK
Training
Motivating
Evaluating

27. 4.physical distribution and logistics management
Physical distribution(marketing logistics)
major logistics function
Integrated logistics management
Third-party logistics

28. Major logistics function
Order processing
Warehousing
Inventory
transportation

29. Integrated logistics management
Cross-functional teamwork inside the company
Building channel partnerships

30. Third-party logistics
An independent logistics provider that performs any or all of the functions required to get their clients’ product to market.