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Chapter 15 provides knowledge of managing marketing channels and supply chains. This chapter explain what is meant by a marketing channel of distribution and why intermediaries are needed; distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems; describe factors that marketing executives consider when selecting and managing a marketing channel.
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved 15-1 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO: LO1 LO2 Explain what is meant by a marketing channel of distribution and why intermediaries are needed Distinguish among traditional marketing channels, electronic marketing channels, and different types of vertical marketing systems 15-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO: LO3 Describe factors that marketing executives consider when selecting and managing a marketing channel LO4 Explain what supply chain and logistics management are and how they relate to marketing strategy 15-3 CALLAWAY GOLF: DESIGNING AND DELIVERING THE GOODS FOR GREAT GOLF 15-4 FIGURE 15-1 The variety of terms used for marketing intermediaries that vary in specificity and use in consumer and business markets 15-5 LO1 NATURE AND IMPORTANCE OF MARKETING CHANNELS THE VALUE CREATED BY INTERMEDIARIES Marketing Channel Functions Performed by Intermediaries • Transactional Function • Logistical Function • Facilitating Function Utilities Received by Consumers 15-6 FIGURE 15-2 Marketing channel intermediaries perform three functions, each consisting of different activities 15-7 CHANNEL STRUCTURE & ORGANIZATION LO2 MARKETING CHANNELS FOR CONSUMER PRODUCTS AND SERVICES Direct Channel Indirect Channel • Retailers • WholesalersRetailers • AgentsWholesalersRetailers 15-8 FIGURE 15-3 Common marketing channels for consumer products and services by the kind and number of intermediaries 15-9 CHANNEL STRUCTURE & ORGANIZATION LO2 MARKETING CHANNELS FOR BUSINESS PRODUCTS AND SERVICES Direct Channel Indirect Channel • Industrial Distributor • Agents • AgentsIndustrial Distributors 15-10 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 15-44 Multichannel Marketing Multichannel marketing involves the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online 15-45 Dual Distribution Dual distribution involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product 15-46 Vertical Marketing Systems Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact 15-47 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 15-48 Exclusive Distribution Exclusive distribution is a level of distribution density whereby only one retailer in a specific geographical area carries the firm’s products 15-49 Selective Distribution Selective distribution is a level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products 15-50 Channel Conflict Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals 15-51 Disintermediation Disintermediation involves channel conflict that arises when a channel member bypasses another member and sells or buys products direct 15-52 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 15-53 Supply Chain A supply chain consists of a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users 15-54 Total Logistics Cost Total logistics cost consists of the expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling 15-55 Customer Service Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience 15-56 Vendor-Managed Inventory (VMI) 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 15-57 Reverse Logistics Reverse logistics is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal 15-58 ... MARKETING CHANNELS; MULTICHANNEL MARKETING Electronic Marketing Channels Direct Marketing Channels Multichannel Marketing 15- 12 FIGURE 15- 5 Consumer electronic marketing channels are similar... electronic marketing channels, and different types of vertical marketing systems 15- 2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 15, YOU SHOULD BE ABLE TO: LO3 Describe factors that marketing. .. Partners Worldwide 15- 15 FIGURE 15- 6 Three types of vertical marketing systems: corporate, contractual (most popular), and administered 15- 16 LO2 CHANNEL STRUCTURE & ORGANIZATION VERICAL MARKETING SYSTEMS