Kotler POM13e Instructor 12 - GE

7/31/2019 Kotler POM13e Instructor 12 - GE

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Chapter 12 - slide 1Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall

Chapter Twelve

Marketing Channels:Delivering Customer Value


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Supply Chains and the

Value Delivery Network

Upstream partners include raw

material suppliers, components,parts, information, finances, andexpertise to create a product orservice

Downstream partners include themarketing channels or distributionchannels that look toward the

customer

Supply Chain Partners


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Supply chain make and sell viewincludes the firms raw materials,productive inputs, and factory capacity

Demand chain sense and respondview suggests that planning starts with

the needs of the target customer, andthe firm responds to these needs byorganizing a chain of resources andactivities with the goal of creating

customer value

Supply Chain Views


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Value deliverynetworkis the

firms suppliers,distributors, andultimatelycustomers whopartner with eachother to improvethe performance of

the entire system



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The Nature and Importance of

Marketing Channels

Intermediaries offer producers

greater efficiency in makinggoods available to target markets.

Through their contacts,

experience, specialization, andscale of operations,intermediaries usually offer the

firm more than it can achieve onits own.

How Channel Members Add Value


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Copyright 2010 Pearson Education, Inc.


Marketing Channels From an economic view,

intermediaries transform the

assortment of products intoassortments wanted by consumers

Channel members add value by

bridging the major time, place, andpossession gaps that separategoods and services from those who

would use them

How Channel Members Add Value





Marketing ChannelsHow Channel Members Add Value





Marketing ChannelsNumber of Channel Levels





Marketing Channels

Connected by types of flows:

Physical flow of products

Flow of ownership

Payment flow

Information flow Promotion flow

Number of Channel Levels


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Channel Behavior and Organization

Marketing channel consists offirms that have partnered for their

common good with each memberplaying a specialized roleChannel conflict refers to

disagreement over goals, roles,

and rewards by channel members Horizontal conflict Vertical conflict

Channel Behavior


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Conventional distributionsystems consist of one or moreindependent producers,wholesalers, and retailers. Eachseeks to maximize its own profits,

and there is little control over theother members and no formalmeans for assigning roles and

resolving conflict.

Conventional Distributions Systems


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Vertical marketing systems (VMSs)

provide channel leadership and consistof producers, wholesalers, and retailersacting as a unified system and consistof:

Corporate marketing systems Contractual marketing systems

Administered marketing systems

Vertical Marketing Systems


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Channel Behavior and

OrganizationCorporate

vertical

marketingsystemintegratessuccessive

stages ofproduction anddistributionunder singleownershi



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Contractual vertical marketing

system consists of independent firmsat different levels of production anddistribution who join together throughcontracts to obtain more economies or

sales impact than each could achievealone. The most common form is thefranchise organization.



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Franchise organization links several

stages in the production distributionprocess

Manufacturer-sponsored retailer franchisesystem

Manufacturer-sponsored wholesalerfranchise system

Service firm-sponsored retailer franchisesystem

http://www.franchiseeurope.com/


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Administered vertical

marketingsystem has a fewdominant channel memberswithout common ownership.

Leadership comes from size andpower.



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Horizontalmarketing systemsare when two or more

companies at onelevel join together tofollow a newmarketingopportunity.

Companies combinefinancial, production,or marketingresources toaccomplish morethan any one

company could alone.

Horizontal Marketing System


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Multichannel Distributionsystems (Hybrid marketingchannels) are when a singlefirm sets up two or more

marketing channels to reachone or more customer segments

Multichannel Distribution SystemsHybrid Marketing Channels
http://www.peapod.com/


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Channel Behavior and

OrganizationMultichannel Distribution System


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Disintermediation

occurs when productor service producerscut out intermediariesand go directly to

final buyers, or whenradically new types ofchannelintermediaries

displace traditional

Changing Channel Organization
http://www.pg.com/en_US/products/all_products/index.shtml


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Channel Design Decisions


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Targeted levels of customer service

What segments to serve Best channels to use

Minimizing the cost of meeting

customer service requirements

Setting Channel Objectives


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Types of intermediaries

Number of marketingintermediaries

Responsibilities of channelmembers

Identifying Major Alternatives


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Identifying Major Alternatives


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Each alternative

should beevaluatedagainst:

Economic criteria Control

Adaptive criteria

Evaluating the Major Alternatives


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Channel systemscan vary from

country tocountry

Must be able to

adapt channelstrategies to theexistingstructures within

each country

Designing International Distribution Channels


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Channel Management Decisions


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Public Policy and Distribution

DecisionsExclusive distribution is when the

seller allows only certain outlets to

carry its productsExclusive dealing is when the seller

requires that the sellers not handlecompetitors products

Exclusive territorial agreements arewhere producer or seller limit territory

Tying agreements are agreementswhere the dealer must take most or all

of the line


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Marketing Logistics and

Supply Chain Management

Marketing logistics(physical distribution)

involves planning,implementing, andcontrolling the physicalflow of goods, services,

and related informationfrom points of origin topoints of consumption tomeet consumer

requirements at a profit

Nature and Importance of MarketingLogistics


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Supply Chain ManagementNature and Importance of

Marketing Logistics


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Supply chain management is the

process of managing upstream anddownstream value-added flows ofmaterials, final goods, and relatedinformation among suppliers, thecompany, resellers, and finalconsumers

Nature and Importance ofMarketing Logistics


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Supply Chain ManagementMajor Logistics Functions


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How many

What types

Location

Distribution centers

Warehousing Decisions


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Just-in-time systems

RFID

Knowing exact product location

Smart shelves

Placing orders automatically

Inventory Management


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Major Logistics Functions

Transportation affects thepricing of products,

delivery performance,and condition of thegoods when they arrive


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Logistics information management is

the management of the flow ofinformation, including customerorders, billing, inventory levels, andcustomer data

EDI (electronic data interchange)

VMI (vendor-managed inventory)

Logistics InformationManagement


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Integrated logistics

management is therecognition that providingcustomer service andtrimming distribution

costs requires teamworkinternally and externally

Integrated Logistics Management


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Third-partylogistics is the

outsourcing oflogistics functionsto third-partylogistics providers

(3PLs)

Integrated Logistics Management


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C i ht 2010 P Ed ti I

All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2010 Pearson Education, Inc.Copyright 2010 Pearson Education, Inc.

Publishing as Prentice HallPublishing as Prentice Hall

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Kotler POM13e Instructor 12 - GE