WSU MKTG 360 - Distribution Channels (3 pages)

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Distribution Channels



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MKTG 360 1nd Edition Lecture 19 Outline of Last Lecture 1 Basic concepts 2 Principle 1 Reciprocation 3 Principle 2 Commitment and consistency 4 Principle 3 Social proof 5 Principle 4 Liking 6 Principle 5 Authority 7 Principle 6 Scarcity Outline of Current Lecture 1 Distribution channels 2 Logistics 3 Supply chain management 4 Intermediaries 5 Distribution the marketing mix and ethical issues 6 Steps in distribution planning Current Lecture 1 Distribution channels a The bridge between producers and final consumers which allows firms to collaborate in the physical movement of the goods or services 2 Logistics a The process of i Planning These 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 3 4 5 6 ii Implementing iii Controlling b 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 chain d Inbound raw inputs and outbound semi or fully finished outputs logistics are important e Reverse logistics is increasingly important due to sustainability practices of firms Supply chain management a 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 Intermediaries a 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 Distribution the marketing mix and ethical issues a Distribution decisions interact with the marketing mix in a number of ways i Place decisions influence pricing costs ii Distribution decisions can help develop a position in the market iii Nature of the product influences choice of distribution channels especially retailers b Distribution decisions can create ethical dilemmas i Slotting allowances shelf space ii Large companies pressure on smaller ones Steps in distribution planning a Step 1 Develop distribution objectives i Profits market share sales ii Product type e g if heavy or bulky need to decrease shipping costs b Step 2 Evaluate internal and external environmental influences i Intensive selective or exclusive distribution ii Need high know how of technical details c Step 3 Choose a distribution strategy i Number of channel levels ii Conventional members work independently iii VMS members decide to work together in different levels of a chain iv HMS members decide to work with other businesses at the same levels of a chain d Step 4 Develop distribution tactics i Selecting channel partners 1 Normally a long term commitment ii Managing the channel 1 Channel leader captain Dominant firm that controls the channel via economic legitimate reward or coercive power


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