1. 1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Prepared by Deborah Baker Texas Christian University 12 Marketing Channels and Supply Chain Management

2. 2 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 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

3. 3 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 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

4. 4 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objectives (continued) 6.Explain channel leadership, conflict, and partnering 7.Describe the logistical components of the supply chain 8.Discuss new technology and emerging trends in supply chain management

5. 5 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objectives (continued) 9.Discuss channels and distribution decisions in global markets 10.Identify the special problems and opportunities associated with distribution in service organizations

6. 6 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Marketing Channels Marketing Channel Marketing Channel Supply Chain 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. 1

7. 7 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Marketing Channel Functions Specialization and division of labor Overcoming discrepancies Providing contact efficiency 1

8. 8 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Overcoming Discrepancies 1 Place (Spatial) Place (Spatial) Time (Temporal) Time (Temporal) Assortment Quantity

9. 9 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Channel Intermediaries 2 Intermediaries Retailers Merchant Wholesalers Merchant Wholesalers Agents and Brokers Agents and Brokers + Not all intermediaries take title to goods!

10. 10 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Factors Suggesting Type of Wholesaling Intermediary to Use 2 Product characteristics Buyer considerations Market characteristics

11. 11 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Channel Functions Performed by Intermediaries Contacting/Promotion Negotiating Risk Taking Researching Financing Physically distributing Storing Sorting Facilitating Functions Transactional Functions Logistical Functions Logistical Functions 2

12. 12 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Alternative Channel Arrangements Multiple channels Strategic channel alliances Nontraditional channels 3

13. 13 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Channel Strategy Decisions Producer Factors Product Factors Market Factors FactorsAffectingChannelChoiceFactorsAffectingChannelChoice Exclusive Distribution Selective Distribution Intensive Distribution Level of Distribution Intensity 5

14. 14 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Social Dimensions of Channels Channel partnering Channel conflict Channel leadership Channel control Channel power 6

15. 15 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Integrated Logistical Components of the Supply Chain Sourcing & Procurement Production Scheduling Order Processing & Customer Service Inventory Control Supply Chain Team Warehouse & Materials Handling Transportation Logistics Information System 7

16. 16 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Role of Purchasing Departments Negotiate service levels Negotiate price Select suppliers Develop specifications Plan purchasing strategies 7

17. 17 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Inventory Management 2 Trends JIT MRP DRP

18. 18 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Transportation Mode Choice Cost Transit Time Reliability Capability Accessibility Traceability 7

19. 19 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Focus Areas for Service Distribution Minimizing wait times Managing service capacity Improving service delivery 10