Chapter 8 Marketing Channels and Supply Chain Management
Chapter 8 Marketing Channels and Supply Chain Management
Issues Concerning Distribution Channels What Role Does What is the Nature Physical Distribution Of Distribution Play in Attracting Channels? and Satisfying Customers? How do Channel What Problems do Firms Interact and Companies Face in Organize to do the Work of the Designing and Managing Their Channel? Channels?
What is the Nature Of Distribution Channels? How do Channel Firms Interact and Organize to do the Work of the Channel? Issues Concerning Distribution Channels What Problems do Companies Face in Designing and Managing Their Channels? What Role Does Physical Distribution Play in Attracting and Satisfying Customers?
Distribution Channels 1.What is a distribution channel? 2. Why are marketing intermediaries used? 3. Distribution channel functions 4. Number of channel levels 5. Conventional Marketing Channel Vs.a Vertical Marketing System
一．Distribution Channels 1. What is a distribution channel? 2. Why are marketing intermediaries used? 3. Distribution channel functions 4. Number of channel levels 5. Conventional Marketing Channel Vs. a Vertical Marketing System
1.What is a Distribution Channel? A set of interdependent organizations (intermediaries)involved in the process of making a product or service available for use or consumption by the consumer or business user. Marketing Channel decisions are among the most important decisions that management faces and will directly affect every other marketing decision
1. What is a Distribution Channel? ⚫ A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user. ⚫ Marketing Channel decisions are among the most important decisions that management faces and will directly affect every other marketing decision
2.Why are Marketing Intermediaries Used? The use of intermediaries results from their greater efficiency in making goods available to target markets. Offer the firm more than it can achieve on it's own through the intermediaries: ●Contacts, 。Experience, 。Specialization, ●Scale of operation. Purpose:match supply from producers to demand from consumers
2. Why are Marketing Intermediaries Used? ⚫ The use of intermediaries results from their greater efficiency in making goods available to target markets. ⚫ Offer the firm more than it can achieve on it’s own through the intermediaries: ⚫ Contacts, ⚫ Experience, ⚫ Specialization, ⚫ Scale of operation. ⚫ Purpose: match supply from producers to demand from consumers
How a Marketing Intermediary 88 Reduces the Number of Channel Transactions 3 Store 6 A.Number of contacts without a distributor B.Number of contacts with a distributor MxC=3x3=9 M+C=3+3=6 Manufacturer Customer Store Distributor
How a Marketing Intermediary Reduces the Number of Channel Transactions
3.Distribution Channel Functions These Functions Should be Assigned to the Channel Member Who Can Perform Them Most Efficiently and Effectively to Provide Satisfactory Assortments of Goods and Services to Target Customers. Risk Taking Information Financing Promotion Physical Contact Distribution Negotiation Matching
Contact Financing Risk Taking Information Promotion Negotiation Matching Physical Distribution These Functions Should be Assigned to the Channel Member Who Can Perform Them Most Efficiently and Effectively to Provide Satisfactory Assortments of Goods and Services to Target Customers. 3. Distribution Channel Functions
4.Number of Channel Levels Channel Level-Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer. Channel 1 Direct Channel M C Channel 2 Indirect Channel R Channel 3 M W R Channel 4 W R
M W J R C M W R C M R C M C Channel 1 Channel 2 Channel 3 Channel 4 Channel Level - Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer. 4. Number of Channel Levels Direct Channel Indirect Channel
Channel Behavior Conflict The channel will be most effective when: each member is assigned tasks it can do best. all members cooperate to attain overall channel goals and satisfy the target market. When this doesn't happen,conflict occurs: Horizontal Conflict occurs among firms at the same level of the channel,i.e retailer to retailer. Vertical Conflict occurs between different levels of the same channel,i.e.wholesaler to retailer. For the channel to perform well,each channel member's role must be specified and conflict must be managed
Channel Behavior & Conflict ⚫ The channel will be most effective when: ⚫ each member is assigned tasks it can do best. ⚫ all members cooperate to attain overall channel goals and satisfy the target market. ⚫ When this doesn’t happen, conflict occurs: ⚫ Horizontal Conflict occurs among firms at the same level of the channel, i.e retailer to retailer. ⚫ Vertical Conflict occurs between different levels of the same channel, i.e. wholesaler to retailer. ⚫ For the channel to perform well, each channel member’s role must be specified and conflict must be managed
5.Conventional Marketing Channel Vs.a Vertical Marketing System Conventional Vertical Marketing Marketing Channel System Manufacturer Manufacturer Wholesaler Retailer Retailer Consumer Consumer
5. Conventional Marketing Channel Vs. a Vertical Marketing System Conventional Marketing Channel Vertical Marketing System Manufacturer Retailer Wholesaler Manufacturer Wholesaler Retailer Consumer Consumer