MKTG 360 1nd Edition Lecture 19 Outline of Last Lecture 1. Basic concepts2. Principle 1- Reciprocation3. Principle 2- Commitment and consistency4. Principle 3- Social proof5. Principle 4- Liking6. Principle 5- Authority7. Principle 6- ScarcityOutline of Current Lecture 1. Distribution channels2. Logistics3. Supply chain management4. Intermediaries5. Distribution, the marketing mix and ethical issues6. Steps in distribution planningCurrent Lecture1. Distribution channelsa. The bridge between producers and final consumers, which allows firms to collaborate in the physical movement of the goods or services.2. Logisticsa. The process ofi. PlanningThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.ii. Implementingiii. Controllingb. The efficient, cost-effective forward and reverse flow of raw materials, in-process inventory, finished goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.c. Logistics: The process of designing, managing, and improving the movement of products through the supply chaind. Inbound (raw inputs) and outbound (semi, or fully finished outputs) logistics are importante. Reverse logistics is increasingly important due to sustainability practices of firms3. Supply chain managementa. The integration of key business processes from end user through original suppliers, that provides products, services, and information that add value for customers and other stakeholders.b. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. c. Supply Chain Management integrates supply and demand management within and across companies.4. Intermediariesa. They handle the flow of products or services to the retailer or business user.b. Independent intermediaries: do business with many different manufacturers and many different customer firms and thus help the flow of goods throughout the marketplace.c. Merchant wholesalers: are independent intermediaries that buy goods from manufacturers and sell to retailers and other B2B organizations. d. Merchandise agents or brokers: provide services in exchange for commissions but never take title on the product.5. Distribution, the marketing mix and ethical issuesa. Distribution decisions interact with the marketing mix in a number of ways:i. Place decisions influence pricing/costsii. Distribution decisions can help develop a position in the marketiii. Nature of the product influences choice of distribution channels, especially retailersb. Distribution decisions can create ethical dilemmasi. Slotting allowances (shelf space)ii. Large companies’ pressure on smaller ones6. Steps in distribution planninga. Step 1: Develop distribution objectivesi. Profits, market share, salesii. Product type, e.g., if heavy or bulky, need to decrease shipping costsb. Step 2: Evaluate internal and external environmental influencesi. Intensive, selective, or exclusive distributionii. Need high know-how of technical detailsc. Step 3: Choose a distribution strategyi. Number of channel levelsii. Conventional: members work independentlyiii. VMS: members decide to work together in different levels of a chainiv. HMS: members decide to work with other businesses at the same levels of a chaind. Step 4: Develop distribution tacticsi. Selecting channel partners 1. Normally a long-term commitmentii. Managing the channel1. Channel leader/captain: Dominant firm that controls the channel (via economic, legitimate,reward or coercive