Description
Distribution & Channel Management
Distribution Channels and Logistics Management
?A
set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption.
? Channel decisions • affect other marketing decisions • involve long-term commitments
? Greater
efficiency in making goods available to target markets. ? Intermediaries provide
• • • •
Contacts Experience Specialization Scale of operation
? Match
supply and demand.
•Information •Promotion •Contact •Matching
•Negotiation
•Physical Distribution •Financing •Risk taking
•Manufacturer •Wholesaler
•Retailer
•Consumer
?
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.
?
Focus on individual goals leads to conflict
• Horizontal Conflict occurs among firms at the same level of
the channel. • Vertical Conflict occurs between different levels of the same channel.
? ? ?
Corporate
• common ownership at different channel levels
Contractual
• contractual agreement among channel members
Administered
• leadership assumed by dominant members
Horizontal Marketing System Two or more companies at one channel level join together to increase coverage Example:Banks in Grocery Stores
Hybrid Marketing System A single firm sets up two or more marketing channels to increase coverage Example:Retailers, Catalogs, and Sales Force
Channel Design Decisions
Analyzing Consumer Service Needs
Setting Channel Objectives & Constraints Identifying Major Alternatives
Intensive Distribution
Selective Distribution
Exclusive Distribution
Evaluating the Major Alternatives
Selecting
FEEDBACK
Motivating
Evaluating
? Involves
entire supply chain ? Increasing importance of logistics
• effective logistics is becoming a key to winning and
keeping customers. • logistics is a major cost element for most companies. • the explosion in product variety has created a need for improved logistics management. • information technology has created opportunities for major gains in distribution efficiency.
• Provide a Targeted Level of Customer Service at the Least Cost.
• Maximize Profits, Not Sales.
Higher Distribution Costs/ Higher Customer Service Levels Lower Distribution Costs/ Lower Customer Service Levels
Logistics Functions
• • • •
Order Processing Warehousing Inventory Management Transportation
• Design system to minimize costs of attaining objectives
Transportation Modes
Nation’s largest carrier, cost-effective for shipping bulk products, piggyback
Rail
Truck
Flexible in routing & time schedules, efficient for short-hauls of high value goods
Water
Low cost for shipping bulky, low-value goods, slowest form
Pipeline
Ship petroleum, natural gas, and chemicals from sources to markets
Air
High cost, ideal when speed is needed or to ship high-value, low-bulk items
Concept Recognizes that Providing Better Customer Service and Trimming Distribution Costs Requires Teamwork, Both Inside the Company and Among All the Marketing Channel Organizations. Cross-Functional Teamwork inside the Company Building Channel Partnerships Third-Party Logistics
doc_318947951.pptx
Distribution & Channel Management
Distribution Channels and Logistics Management
?A
set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption.
? Channel decisions • affect other marketing decisions • involve long-term commitments
? Greater
efficiency in making goods available to target markets. ? Intermediaries provide
• • • •
Contacts Experience Specialization Scale of operation
? Match
supply and demand.
•Information •Promotion •Contact •Matching
•Negotiation
•Physical Distribution •Financing •Risk taking
•Manufacturer •Wholesaler
•Retailer
•Consumer
?
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.
?
Focus on individual goals leads to conflict
• Horizontal Conflict occurs among firms at the same level of
the channel. • Vertical Conflict occurs between different levels of the same channel.
? ? ?
Corporate
• common ownership at different channel levels
Contractual
• contractual agreement among channel members
Administered
• leadership assumed by dominant members
Horizontal Marketing System Two or more companies at one channel level join together to increase coverage Example:Banks in Grocery Stores
Hybrid Marketing System A single firm sets up two or more marketing channels to increase coverage Example:Retailers, Catalogs, and Sales Force
Channel Design Decisions
Analyzing Consumer Service Needs
Setting Channel Objectives & Constraints Identifying Major Alternatives
Intensive Distribution
Selective Distribution
Exclusive Distribution
Evaluating the Major Alternatives
Selecting
FEEDBACK
Motivating
Evaluating
? Involves
entire supply chain ? Increasing importance of logistics
• effective logistics is becoming a key to winning and
keeping customers. • logistics is a major cost element for most companies. • the explosion in product variety has created a need for improved logistics management. • information technology has created opportunities for major gains in distribution efficiency.
• Provide a Targeted Level of Customer Service at the Least Cost.
• Maximize Profits, Not Sales.
Higher Distribution Costs/ Higher Customer Service Levels Lower Distribution Costs/ Lower Customer Service Levels
Logistics Functions
• • • •
Order Processing Warehousing Inventory Management Transportation
• Design system to minimize costs of attaining objectives
Transportation Modes
Nation’s largest carrier, cost-effective for shipping bulk products, piggyback
Rail
Truck
Flexible in routing & time schedules, efficient for short-hauls of high value goods
Water
Low cost for shipping bulky, low-value goods, slowest form
Pipeline
Ship petroleum, natural gas, and chemicals from sources to markets
Air
High cost, ideal when speed is needed or to ship high-value, low-bulk items
Concept Recognizes that Providing Better Customer Service and Trimming Distribution Costs Requires Teamwork, Both Inside the Company and Among All the Marketing Channel Organizations. Cross-Functional Teamwork inside the Company Building Channel Partnerships Third-Party Logistics
doc_318947951.pptx