Marketing Channels and Supply Chain Management

Transcription

1 and Supply Chain Management Definition Value Delivery Network The network made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system Channel choices affect other decisions in the marketing mix A strong distribution system can be a competitive advantage Channel decisions involve long-term commitments to other firms Figure 13-1: How Channel Members Add Value How Channel Members Add Value Intermediaries Require fewer contacts to move the product to the final purchaser. Help match product assortment demand with supply. Help bridge major time, place, and possession gaps 13-4 Key Functions Performed by Channel Members Information Promotion Contact Matching Negotiation Physical Distribution Financing Risk taking

2 Figure 13-a: Consumer Number of Channel Levels The number of intermediary levels indicates the length of a marketing channel. Direct Channels Indirect Channels Producers lose more control and face greater channel complexity as additional channel levels are added Channel Members Are Connected Via A Variety of s Physical Information Payment Promotion of Ownership 13-8 Channel Behavior and Organization Channel Conflict Occurs when channel members disagree on roles, activities, or rewards. Types of Conflict: Horizontal conflict: occurs among firms at the same channel level Vertical conflict: occurs among firms at different channel levels 13-9 Figure 13-3: Conventional Versus Vertical Marketing System Figure 13-4: Multichannel Distribution System

3 Channel Behavior and Organization Multichannel Distribution Systems Also called hybrid marketing channels Occurs when a firm uses two or more marketing channels Hybrid marketing has many advantages Step 1: Analyzing Consumer Needs Cost and feasibility of meeting needs must be considered Step : Setting Channel Objectives Set channel objectives in terms of targeted level of customer service Many factors influence channel objectives Step 3: Identifying Major Alternatives Types of Intermediaries Company sales force Manufacturer s agency Industrial distributors Step 3: Identifying Major Alternatives Number of marketing intermediaries Intensive distribution Selective distribution Exclusive distribution Responsibilities of channel members Step 4: Evaluating Major Alternatives Economic criteria Sales, costs, profitability Control issues Adaptive criteria

4 Designing International Distribution Channels Global marketers usually adapt their channel strategies to structures that exist within foreign countries Key challenges: Channels may be complex or hard to penetrate Channels may be scattered, inefficient, or totally lacking Channel Management Decisions Selecting Channel Members Identify characteristics that distinguish the best channel members Managing and Motivating Channel Members Partner relationship management (PRM) is key Channel Management Decisions Evaluating Channel Members Performance should be checked against standards Channel members should be rewarded or replaced as dictated by performance Figure 13-5: Supply Chain Management Independent RetaIlers 99.8% of overall enterprises are small and medium sized enterprises; approx. 40% of them has activities in retailing industry in Turkey. In the World, account for one-third of total store sales 70% of independents operated by owners and their families Why so many? Ease of entry From the local florist to the hardware store to the funky boutique Chaın Retaılers Operate multiple outlets under common ownership Engage in some level of centralized or coordinated purchasing and decision making In the U.S., there are roughly 110,000 retail chains operating about 900,000 establishments

5 Louıs Vuitton A Powerhouse of Upscale Retailing The company operates in 50 countries with more than 460 stores worldwide Store-Based Retail Strategy Mixes Food-Oriented Convenience store Conventional supermarket Food-based superstore Combination store Box (limited-line) store Warehouse store General Merchandise Specialty store Traditional department Full-line discount store Variety store Off-price chain Factory outlet Membership club Flea market Box store cases: A101-bım Items are dısplayed ın cut cases TYPE OF SPECIALTY STORE: CATEGORY KILLERS 6 7 MEMBERSHIP CLUB: METRO German based, since wholesale stores in 5 countries; SALES: $ 9.7 bn (015) In Turkey, since 1990 Flea Market Strategy Mix Street selling

6 Retailer Strategy Mix A strategy mix is the firm s particular combination of: store location operating procedures goods/services offered pricing tactics store atmosphere customer services promotional methods TESCO VIRTUAL STORE OPET: CLEAN TOILETTE CAMPAIGN In class study: How does amazon create a value for ıts customers? 6