Publishing as Prentice Hall
Publishing as Prentice Hall
• Supply Chains and the Value Delivery Network
• The Nature and Importance of Marketing
Channels
Management
Publishing as Prentice Hall
'he supply chain consists o* t+o types o* partners
pstrea% partners include raw material suppliers$ components$ parts$ information$ finances$ and e%pertise to create a product or service
#o+nstrea% partners include the marketing channels or distri&ution channels that look toward the customer 
upply Chain Partners
Publishing as Prentice Hall
ro% supply chain to de%and chain
upply chain 'make and sell( view includes the firm)s raw materials$ productive inputs$ and factory capacity
#e%and chain 'sense and respond( view suggests that planning starts with the needs of the target customer$ and the firm responds to these needs &y organi"ing a chain of resources and activities with the goal of creating customer value
upply Chain &ie+s
Publishing as Prentice Hall
• &alue deli$ery net+or" is the firm)s
suppliers$ distri&utors$ and ultimately
customers who partner with each other
to improve the performance of the
entire system
Publishing as Prentice Hall
Inter%ediaries offer producers greater
efficiency in making goods availa&le to
target markets* Through their contacts$
e%perience$ speciali"ation$ and scale of
operations$ intermediaries usually offer the
firm more than it can achieve on its own*
Ho+ Channel !e%bers 4dd &alue
 
Publishing as Prentice Hall
• +rom an economic view$ intermediaries
transform the assortment of products
into assortments wanted &y consumers
• Channel mem&ers add value &y &ridging
the ma,or time$ place$ and possession
gaps that separate goods and services
from those who would use them
Ho+ Channel !e%bers 4dd &alue
 
Publishing as Prentice Hall
!ar"eting Channels Ho+ Channel !e%bers 4dd &alue
 
Publishing as Prentice Hall
Connected &y types of flows-
• .hysical flow of products
 
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
!ar"eting channel consists of firms that have partnered for their common good with each mem&er playing a speciali"ed role
Channel con*lict refers to disagreement over goals$ roles$ and rewards &y channel mem&ers
• /ori"ontal conflict • Vertical conflict
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
one or more independent producers$
wholesalers$ and retailers* 0ach seeks to
ma%imi"e its own profits$ and there is little
control over the other mem&ers and no
formal means for assigning roles and
resolving conflict*
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
&ertical %ar"eting syste%s &!: provide channel leadership and consist of producers$ wholesalers$ and retailers acting as a unified system and consist of-
• Corporate marketing systems
• Contractual marketing systems
•  1dministered marketing systems
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
Corporate $ertical %ar"eting syste%
and distri&ution under single ownership
&ertical !ar"eting yste%s
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
Contractual $ertical %ar"eting syste% 
levels of production and distri&ution who ,oin
together through contracts to o&tain more
economies or sales impact than each could
achieve alone* The most common form is
the franchise organi"ation*
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
the production distri&ution process
 2 Manufacturer3sponsored retailer franchise
&ertical !ar"eting yste%s
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
has a few dominant channel mem&ers
without common ownership* #eadership
&ertical !ar"eting yste%s
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
Hori8ontal %ar"eting syste%s are when two or more companies at one level ,oin together to follow a new marketing opportunity* Companies com&ine financial$ production$ or marketing resources to accomplish more than any one company could alone*
Hori8ontal !ar"eting yste%s
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
%ar"eting channels: are when a single
firm sets up two or more marketing
channels to reach one or more customer
segments
Publishing as Prentice Hall
Channel 7eha$ior and (rgani8ation
go directly to final &uyers$ or when radically
new types of channel intermediaries
displace traditional ones
Changing Channel (rgani8ation
Publishing as Prentice Hall
Publishing as Prentice Hall
• 4hat segments to serve
• est channels to use
service re5uirements
Publishing as Prentice Hall
mem&er 
Publishing as Prentice Hall
Publishing as Prentice Hall
against-
Publishing as Prentice Hall
to country
strategies to the e%isting structures
within each country
Publishing as Prentice Hall
Channel !anage%ent #ecisions
Publishing as Prentice Hall
Public Policy and #istribution
only certain outlets to carry its products
E<clusi$e dealing is when the seller re5uires that
the sellers not handle competitor)s products
E<clusi$e territorial agree%ents is when producer or seller limit territory
 
Publishing as Prentice Hall
!ar"eting logistics 7physical distri&ution8
involves planning$ implementing$ and
of origin to points of consumption to meet
consumer re5uirements at a profit
ature and I%portance o* !ar"eting =ogistics
 
Publishing as Prentice Hall
upply chain %anage%ent is the process of
managing upstream and downstream value3
added flows of materials$ final goods$ and
related information among suppliers$ the
company$ resellers$ and final consumers
ature and I%portance o* !ar"eting =ogistics
 
Publishing as Prentice Hall
Publishing as Prentice Hall
• /ow many
• 4hat types
Publishing as Prentice Hall
• 9ust3in3time systems
• 6+ID
• Smart shelves
Publishing as Prentice Hall
'ransportation affects the pricing of products$
delivery performance$ and condition of the
goods when they arrive
Publishing as Prentice Hall
=ogistics in*or%ation %anage%ent is the
management of the flow of information$
including customer orders$ &illing$ inventory
levels$ and customer data 
• 0DI 7electronic data interchange8
 
Publishing as Prentice Hall
Integrated logistics %anage%ent is the
recognition that providing customer service
and trimming distri&ution costs re5uires
teamwork internally and e%ternally
• Cross3functional teamwork inside the
Publishing as Prentice Hall
'hird-party logistics is the outsourcing of logistics functions to third3party logistics providers 7;.#s8
Integrated =ogistics !anage%ent
Publishing as Prentice Hall
 1ll rights reserved* No part of this pu&lication may &e reproduced$ stored in a
retrieval system$ or transmitted$ in any form or &y any means$ electronic$
mechanical$ photocopying$ recording$ or otherwise$ without the prior written
permission of the pu&lisher* .rinted in the <nited States of 1merica*
Copyright = >?@? .earson 0ducation$ Inc*Copyright = >?@? .earson 0ducation$ Inc*
.u&lishing as .rentice /all.u&lishing as .rentice /all