Distribution Channels and Logistics Management

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2. What is the Nature Of DistributionChannels?. How do Channel Firms Interact andOrganize to do theWork of theChannel?. Issues Concerning Distribution Channels. What Problems doCompanies Face inDesigning andManaging TheirChannels?. What Role Does Physical DistributionPlay in Attractin
Distribution Channels and Logistics Management

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1. 1 Chapter 12 Distribution Channels and Logistics Management

2. 2 Issues Concerning Distribution Channels

3. 3 What is a Distribution Channel? A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user. Marketing Channel decisions are among the most important decisions that management faces and will directly affect every other marketing decision.

4. 4 Why are Marketing Intermediaries Used? The use of intermediaries results from their greater efficiency in making goods available to target markets. Offer the firm more than it can achieve on it?s own through the intermediaries: Contacts, Experience, Specialization, Scale of operation. Purpose: match supply from producers to demand from consumers.

5. 5 How a Marketing Intermediary Reduces the Number of Channel Transactions

6. 6 Distribution Channel Functions

7. 7 Number of Channel Levels (Fig. 12.2)

8. 8 Channel Behavior & Conflict 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. When this doesn?t happen, conflict occurs: Horizontal Conflict occurs among firms at the same level of the channel, i.e retailer to retailer. Vertical Conflict occurs between different levels of the same channel, i.e. wholesaler to retailer. For the channel to perform well, each channel member?s role must be specified and conflict must be managed.

9. 9 Conventional Marketing Channel Vs. a Vertical Marketing System (Fig. 12.3)

10. 10 Types of Vertical Marketing Systems

11. 11 Types of Vertical Marketing Systems

12. 12 Innovations in Marketing Systems Horizontal Marketing System Two or More Companies at One Channel Level Join Together to Follow a New Marketing Opportunity. Example: Banks in Grocery Stores Hybrid Marketing System A Single Firm Sets Up Two or More Marketing Channels to Reach One or More Customer Segments. Example: Retailers, Catalogs, and Sales Force

13. 13 Discussion Connections Describe the kinds of horizontal and vertical channel conflict that might occur in one of the following: Personal computer industry, Automobile industry, Music industry, Clothing industry. How would you remedy the problems you have just described?

14. 14 Changing Channel Organization A Major Trend is Toward Disintermediation Which Means that Product and Service Producers are Bypassing Intermediaries and Going Directly to Final Buyers or That New Types of Channel Intermediaries are Emerging to Displace Traditional Ones.

15. 15 Channel Design Decisions

16. 16 Channel Management Decisions

17. 17 Nature and Importance of Marketing Logistics Involves getting the right product to the right customers in the right place at the right time. Companies today place greater emphasis on logistics because: customer service and satisfaction have become the cornerstone of marketing strategy. logistics is a major cost element for most companies. the explosion in product variety has created a need for improved logistics management. Improvements in information technology has created opportunities for major gains in distribution efficiency.

18. 18 Goals of the Logistics System

19. 19 Major Logistics Functions

20. 20 Transportation Modes

21. 21 Choosing Transportation Modes

22. 22 Integrated Logistics Management

23. 23 Review of Concept Connections Explain why companies use distribution channels and discuss thee functions these channels perform. Discuss how channel members interact and how they organize to perform the work of the channel. Identify the major channel alternatives open to a company. Discuss the nature and importance of physical distribution. Analyze integrated logistics, including how it may be achieved and its benefits to the company.

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