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Ch[1]. 13 Final

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This document discusses managing marketing channels and supply chains. It covers: 1. What marketing channels are, the value created by intermediaries through transactional, logistical and facilitating functions. It also discusses consumer benefits. 2. Different types of marketing channel structures for consumer and business goods/services. This includes traditional, electronic and various vertical marketing systems. 3. Factors considered in selecting and managing marketing channels, including target market coverage, satisfying buyer requirements, and profitability. It also addresses potential conflicts and cooperation within channels. 4. The relationship between logistics, supply chain management and marketing strategy. It discusses how supply chains relate to and can be aligned with marketing strategy.

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CHAPTER MANAGING MARKETING CHANNELS AND SUPPLY CHAINS Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-1
AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Explain what is meant by a marketing channel of distribution and why intermediaries are needed. 1. Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-2
AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Describe factors that marketing executives consider when selecting and managing a marketing channel. 1. Explain what supply chain and logistics management are and how they relate to marketing strategy. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-3
APPLE STORES: ADDING HIGH-TOUCH TO HIGH-TECH MARKETING CHANNELS Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-4
NATURE AND IMPORTANCE OF MARKETING CHANNELS • What is a Marketing Channel of Distribution?  Marketing Channel Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-5
FIGURE 13-1 Terms used for marketing intermediaries Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-6
NATURE AND IMPORTANCE OF MARKETING CHANNELS • Value Created by Intermediaries  Functions Performed by Intermediaries • Transactional Function • Logistical Function • Facilitating Function Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-7
FIGURE 13-2 Marketing channel functions performed by intermediaries  Consumer Benefits from Intermediaries Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-8
CHANNEL STRUCTURE AND ORGANIZATION • Marketing Channels for Consumer Goods and Services  Direct Channel  Indirect Channels Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-9
FIGURE 13-3 Common marketing channels for consumer goods and services Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-10
CHANNEL STRUCTURE AND ORGANIZATION • Marketing Channels for Business Goods and Services  Industrial Distributor  Agent Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-11
FIGURE 13-4 Common marketing channels for business goods and services Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-12
CHANNEL STRUCTURE AND ORGANIZATION • Electronic Marketing Channels • Multiple Channels and Strategic Alliances  Dual Distribution  Strategic Channel Alliances Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-13
FIGURE 13-5 Representative consumer electronic marketing channels Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-14
CHANNEL STRUCTURE AND ORGANIZATION • Vertical Marketing Systems  Corporate Systems • Corporate Vertical Marketing System • Forward Integration • Backward Integration Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-15
FIGURE 13-6 Types of vertical marketing systems Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-16
CHANNEL STRUCTURE AND ORGANIZATION • Vertical Marketing Systems  Contractual Systems • Contractual Vertical Marketing System • Wholesaler-Sponsored Voluntary Chains • Retailer-Sponsored Cooperatives Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-17
CHANNEL STRUCTURE AND ORGANIZATION • Vertical Marketing Systems  Contractual Systems • Franchising  Manufacturer-Sponsored Retail Franchise Systems  Manufacturer-Sponsored Wholesale Systems  Service-Sponsored Retail Franchise Systems  Service-Sponsored Franchise Systems  Administered Systems Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-18
Sherwin-Williams and H&R Block What vertical marketing system does each use? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-19
CHANNEL CHOICE AND MANAGEMENT • Factors in Choosing a Marketing Channel  Provide the Best Target Market Coverage  Best Satisfy the Target Market’s Buying Requirements  Be the Most Profitable Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-20
CHANNEL CHOICE AND MANAGEMENT • Factors in Choosing a Marketing Channel  Target Market Coverage • Intensive Distribution • Exclusive Distribution • Selective Distribution Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-21
CHANNEL CHOICE AND MANAGEMENT • Factors in Choosing a Marketing Channel  Satisfying Buyer Requirements • Information • Variety • Convenience • Pre- or Post-Sale Services  Profitability Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-22
Jiffy Lube and PETCO What buyer requirements are satisfied? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-23
CHANNEL CHOICE AND MANAGEMENT • Channel Relationships: Conflict and Cooperation  Conflict in Marketing Channels • Channel Conflict • Vertical Conflict  Disintermediation • Horizontal Conflict Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-24
CHANNEL CHOICE AND MANAGEMENT • Channel Relationships: Conflict and Cooperation  Cooperation in Marketing Channels • Channel Captain  Economic  Identification  Expertise  Legitimate Right Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-25
LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Logistics • Logistics Management  Flow of the Product  Cost-Effective  Customer Service Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-26
LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Supply Chains versus Marketing Channels  Supply Chain  Supply Chain Management Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-27
FIGURE 13-7 Relating logistics management and supply chain management to supplier networks and marketing channels Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-28
FIGURE 13-8: Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-29
FIGURE 13-A Paint industry supply chain Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-30
LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Supply Chain Management and Marketing Strategy  Aligning a Supply Chain w/ Marketing Strategy • Understand the Customer • Understand the Supply Chain • Harmonize the Supply Chain with the Marketing Strategy Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-31
LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Dell: A Responsive Supply Chain • Wal-Mart: An Efficient Supply Chain  Cross-Docking Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-32
TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN • Total Logistics Cost Concept • Customer Service Concept  Time • Order Cycle or Replenishment Time • Quick Response or Efficient Consumer Response Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-33
FIGURE 13-9 Supply chain managers balance total logistics cost factors against customer service factors Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-34
TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN • Customer Service Concept  Dependability  Communication  Convenience • Vendor-Managed Inventory (VMI) Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-35
FIGURE 13-B Advantages and disadvantages of five modes of transportation Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-36
GOING ONLINE FINDING A FRANCHISE FOR YOU Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-37
Going Online 1. Visit the Franchise.com website, and click on the “Franchise Buyer” link. Which franchise opportunities fit you? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-38
Going Online 2. Visit the International Franchise Association website, and click on the “Resource Center” link. Then, click on the “News” link. What are the current trends in franchising? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-39
SUPPLEMENTAL LECTURE NOTE 13-2 TRANSPORTATION: A KEY LOGISTICS FUNCTION IN A SUPPLY CHAIN Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-40
FedEx and Maersk What transportation modes does each perform? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-41
IN-CLASS ACTIVITY 13-1 MARKETING CHANNELS FOR APPLE COMPUTER Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-42
Apple Computer Products Mac mini iMac G5 iPod Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-43
Apple Computer Marketing Channel Structure: Online Apple Store - Direct Channel Producer Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-44
Apple Computer Marketing Channel Structure: Apple Retail Store - Direct Channel Producer Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-45
Apple Computer Marketing Channel Structure: CompUSA - Direct Channel/Strategic Channel Alliance Producer Retailer CompUSA Apple Employees Staff CompUSA Store-Within- A-Store Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-46
Apple Computer Marketing Channel Structure: Ingram Micro/Best Buy - Indirect Channel Producer Ingram Wholesaler Micro Retailer Best Buy Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-47
Apple Computer Marketing Channel Structure: MacMall Online/Catalog Sales - Indirect Channel Producer Retailer MacMall Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-48
IN-CLASS ACTIVITY 13-2 MARKETING CHANNELS FOR FASTENAL’S UNIQUE THREADED FASTENERS Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-49
Fastenal Fasteners Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-50
Fastenal Fasteners (Unique Heads/Tops) Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-51
Fastenal Fasteners (Unique Drivers/Tools) Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-52
FIGURE 13-C Common marketing channels for business goods and services Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-53
Marketing Channel A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-54
Dual Distribution Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-55
Vertical Marketing Systems Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-56
Franchising Franchising is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-57
Intensive Distribution Intensive distribution is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-58
Exclusive Distribution Exclusive distribution is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm’s products. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-59
Selective Distribution Selective distribution is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-60
Channel Conflict Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-61
Disintermediation Disintermediation is channel conflict that arises when a channel member bypasses another member and sells or buys products direct. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-62
Logistics Logistics consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-63
Supply Chain A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-64
Total Logistics Cost Total logistics cost consists of expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-65
Customer Service Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-66
Vendor-Managed Inventory Vendor-managed inventory (VMI) is an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-67

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Ch[1]. 13 Final

  • 1. CHAPTER MANAGING MARKETING CHANNELS AND SUPPLY CHAINS Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-1
  • 2. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Explain what is meant by a marketing channel of distribution and why intermediaries are needed. 1. Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-2
  • 3. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Describe factors that marketing executives consider when selecting and managing a marketing channel. 1. Explain what supply chain and logistics management are and how they relate to marketing strategy. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-3
  • 4. APPLE STORES: ADDING HIGH-TOUCH TO HIGH-TECH MARKETING CHANNELS Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-4
  • 5. NATURE AND IMPORTANCE OF MARKETING CHANNELS • What is a Marketing Channel of Distribution?  Marketing Channel Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-5
  • 6. FIGURE 13-1 Terms used for marketing intermediaries Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-6
  • 7. NATURE AND IMPORTANCE OF MARKETING CHANNELS • Value Created by Intermediaries  Functions Performed by Intermediaries • Transactional Function • Logistical Function • Facilitating Function Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-7
  • 8. FIGURE 13-2 Marketing channel functions performed by intermediaries  Consumer Benefits from Intermediaries Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-8
  • 9. CHANNEL STRUCTURE AND ORGANIZATION • Marketing Channels for Consumer Goods and Services  Direct Channel  Indirect Channels Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-9
  • 10. FIGURE 13-3 Common marketing channels for consumer goods and services Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-10
  • 11. CHANNEL STRUCTURE AND ORGANIZATION • Marketing Channels for Business Goods and Services  Industrial Distributor  Agent Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-11
  • 12. FIGURE 13-4 Common marketing channels for business goods and services Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-12
  • 13. CHANNEL STRUCTURE AND ORGANIZATION • Electronic Marketing Channels • Multiple Channels and Strategic Alliances  Dual Distribution  Strategic Channel Alliances Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-13
  • 14. FIGURE 13-5 Representative consumer electronic marketing channels Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-14
  • 15. CHANNEL STRUCTURE AND ORGANIZATION • Vertical Marketing Systems  Corporate Systems • Corporate Vertical Marketing System • Forward Integration • Backward Integration Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-15
  • 16. FIGURE 13-6 Types of vertical marketing systems Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-16
  • 17. CHANNEL STRUCTURE AND ORGANIZATION • Vertical Marketing Systems  Contractual Systems • Contractual Vertical Marketing System • Wholesaler-Sponsored Voluntary Chains • Retailer-Sponsored Cooperatives Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-17
  • 18. CHANNEL STRUCTURE AND ORGANIZATION • Vertical Marketing Systems  Contractual Systems • Franchising  Manufacturer-Sponsored Retail Franchise Systems  Manufacturer-Sponsored Wholesale Systems  Service-Sponsored Retail Franchise Systems  Service-Sponsored Franchise Systems  Administered Systems Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-18
  • 19. Sherwin-Williams and H&R Block What vertical marketing system does each use? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-19
  • 20. CHANNEL CHOICE AND MANAGEMENT • Factors in Choosing a Marketing Channel  Provide the Best Target Market Coverage  Best Satisfy the Target Market’s Buying Requirements  Be the Most Profitable Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-20
  • 21. CHANNEL CHOICE AND MANAGEMENT • Factors in Choosing a Marketing Channel  Target Market Coverage • Intensive Distribution • Exclusive Distribution • Selective Distribution Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-21
  • 22. CHANNEL CHOICE AND MANAGEMENT • Factors in Choosing a Marketing Channel  Satisfying Buyer Requirements • Information • Variety • Convenience • Pre- or Post-Sale Services  Profitability Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-22
  • 23. Jiffy Lube and PETCO What buyer requirements are satisfied? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-23
  • 24. CHANNEL CHOICE AND MANAGEMENT • Channel Relationships: Conflict and Cooperation  Conflict in Marketing Channels • Channel Conflict • Vertical Conflict  Disintermediation • Horizontal Conflict Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-24
  • 25. CHANNEL CHOICE AND MANAGEMENT • Channel Relationships: Conflict and Cooperation  Cooperation in Marketing Channels • Channel Captain  Economic  Identification  Expertise  Legitimate Right Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-25
  • 26. LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Logistics • Logistics Management  Flow of the Product  Cost-Effective  Customer Service Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-26
  • 27. LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Supply Chains versus Marketing Channels  Supply Chain  Supply Chain Management Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-27
  • 28. FIGURE 13-7 Relating logistics management and supply chain management to supplier networks and marketing channels Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-28
  • 29. FIGURE 13-8: Sourcing, Assembling, and Delivering a New Car: The Automotive Supply Chain Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-29
  • 30. FIGURE 13-A Paint industry supply chain Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-30
  • 31. LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Supply Chain Management and Marketing Strategy  Aligning a Supply Chain w/ Marketing Strategy • Understand the Customer • Understand the Supply Chain • Harmonize the Supply Chain with the Marketing Strategy Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-31
  • 32. LOGISTICS AND SUPPLY CHAIN MANAGEMENT • Dell: A Responsive Supply Chain • Wal-Mart: An Efficient Supply Chain  Cross-Docking Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-32
  • 33. TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN • Total Logistics Cost Concept • Customer Service Concept  Time • Order Cycle or Replenishment Time • Quick Response or Efficient Consumer Response Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-33
  • 34. FIGURE 13-9 Supply chain managers balance total logistics cost factors against customer service factors Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-34
  • 35. TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN • Customer Service Concept  Dependability  Communication  Convenience • Vendor-Managed Inventory (VMI) Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-35
  • 36. FIGURE 13-B Advantages and disadvantages of five modes of transportation Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-36
  • 37. GOING ONLINE FINDING A FRANCHISE FOR YOU Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-37
  • 38. Going Online 1. Visit the Franchise.com website, and click on the “Franchise Buyer” link. Which franchise opportunities fit you? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-38
  • 39. Going Online 2. Visit the International Franchise Association website, and click on the “Resource Center” link. Then, click on the “News” link. What are the current trends in franchising? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-39
  • 40. SUPPLEMENTAL LECTURE NOTE 13-2 TRANSPORTATION: A KEY LOGISTICS FUNCTION IN A SUPPLY CHAIN Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-40
  • 41. FedEx and Maersk What transportation modes does each perform? Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-41
  • 42. IN-CLASS ACTIVITY 13-1 MARKETING CHANNELS FOR APPLE COMPUTER Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-42
  • 43. Apple Computer Products Mac mini iMac G5 iPod Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-43
  • 44. Apple Computer Marketing Channel Structure: Online Apple Store - Direct Channel Producer Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-44
  • 45. Apple Computer Marketing Channel Structure: Apple Retail Store - Direct Channel Producer Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-45
  • 46. Apple Computer Marketing Channel Structure: CompUSA - Direct Channel/Strategic Channel Alliance Producer Retailer CompUSA Apple Employees Staff CompUSA Store-Within- A-Store Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-46
  • 47. Apple Computer Marketing Channel Structure: Ingram Micro/Best Buy - Indirect Channel Producer Ingram Wholesaler Micro Retailer Best Buy Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-47
  • 48. Apple Computer Marketing Channel Structure: MacMall Online/Catalog Sales - Indirect Channel Producer Retailer MacMall Consumer Customers Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-48
  • 49. IN-CLASS ACTIVITY 13-2 MARKETING CHANNELS FOR FASTENAL’S UNIQUE THREADED FASTENERS Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-49
  • 50. Fastenal Fasteners Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-50
  • 51. Fastenal Fasteners (Unique Heads/Tops) Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-51
  • 52. Fastenal Fasteners (Unique Drivers/Tools) Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-52
  • 53. FIGURE 13-C Common marketing channels for business goods and services Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-53
  • 54. Marketing Channel A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-54
  • 55. Dual Distribution Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-55
  • 56. Vertical Marketing Systems Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-56
  • 57. Franchising Franchising is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-57
  • 58. Intensive Distribution Intensive distribution is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-58
  • 59. Exclusive Distribution Exclusive distribution is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm’s products. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-59
  • 60. Selective Distribution Selective distribution is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-60
  • 61. Channel Conflict Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-61
  • 62. Disintermediation Disintermediation is channel conflict that arises when a channel member bypasses another member and sells or buys products direct. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-62
  • 63. Logistics Logistics consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-63
  • 64. Supply Chain A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-64
  • 65. Total Logistics Cost Total logistics cost consists of expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-65
  • 66. Customer Service Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-66
  • 67. Vendor-Managed Inventory Vendor-managed inventory (VMI) is an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items. Copyright © 2007 by The McGraw-Hill Companies, Inc. All Rights Reserved. Slide 13-67

Editor's Notes

  • #31: This shows the sequence of firms that supply, manufacture, store, blend, and sell to the two primary paint consumer segments: (1) professional painters and (2) do-it-yourselfers.
  • #42: Fed-Ex is a third-party logistics provider that performs some transportation functions, such as air and ground freight. Maersk provides multiple modes of transportation, including the use of containers on ships, trains, and trucks.