1. Chapter 12 Marketing Channels and Supply Chain Management

2. 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.

3. Marketing Channel Functions Specialization and Division of Labor Specialization and Division of Labor Channels Fulfill Three Important Functions Channels Fulfill Three Important Functions Overcoming Discrepancies Overcoming Discrepancies Providing Contact Efficiency Providing Contact Efficiency

4. Contact Efficiency Zenith Sony RCA Toshiba Zenith Sony RCA Toshiba Circuit City

5. Channel Intermediaries Retailer Merchant Wholesaler Merchant Wholesaler Agents and Brokers Agents and Brokers A channel intermediary that sells mainly to customers. 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.

6. Channel Functions Performed by Intermediaries Contacting/Promotion Negotiating Risk Taking Facilitating Function Transactional Functions Logistical Functions Logistical Functions Researching Financing Physically distributing Storing Sorting

7. Channels for Consumer Products Producer Consumers Retailers Wholesalers Agents or Brokers WholesalerChannelRetailerChannel DirectChannelAgent/BrokerChannel

8. Channels for Business-to- Business Products Producer Industrial User Industrial Distributor Agents or Brokers Agents or Brokers Agent/BrokerChannel Industrial Distributor DirectChannel Producer Government Buyer DirectChannel Agent/Broker Agent/Broker Industrial Channel

9. Alternative Channel Arrangements Different Channels May be Used Multiple Channels Adaptive Channels Strategic Channel Alliances Nontraditional Channels

10. Supply Chain Management Resultsof Supply Chain ManagementResultsof Management Focus on Innovative Solutions Competitive with focus on Customer Satisfaction Competitive with focus on Customer Satisfaction Synchronized Flow Customer Value

11. Physical flow process that engineers the movement of goods Physical flow process that engineers the movement of goods Communicator of customer demand from point of sale to supplier Communicator of customer demand from point of sale to supplier Role of Supply Chain Management Role of Supply Chain Management Role of Supply Chain Management

12. Channel Strategy Decisions Issues that Influence Channel Strategy Producer Factors Product Factors Market Factors FactorsAffectingChannelChoiceFactorsAffectingChannelChoice Exclusive Distribution Selective Distribution Intensive Distribution Levels of Distribution Intensity

13. Intensity Level ObjectiveObjective Number of Intermediaries Intensive Selective Exclusive Achieve mass market selling. Convenience goods. Achieve mass market selling. Convenience goods. Work with selected intermediaries. Shopping and some specialty goods. Work with selected intermediaries. Shopping and some specialty goods. Work with single intermediary. Specialty goods and industrial equipment. Work with single intermediary. Specialty goods and industrial equipment. Many Several One

14. Managing Channel Relationships Channel Partnering Channel Conflict Channel Leadership Channel Control Channel Power Social Dimensions of Channels

15. Channel Power, Control, and Leadership Channel Power Channel Power Channel Control Channel 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. A member of a marketing channel that exercises authority/power over the activities of other members.