Marketing 3250 Final Chapter 16 10 questions Chapter 17 10 questions Chapter 15 10 questions Chapter 8 5 questions Chapter 10 5 questions Chapter 16 Channels Marketing channel management supply chain management approaches and techniques firms employ to efficiently and effectively integrate their suppliers manufactures warehouses stores and transportation intermediaries into a seamless operation in which merchandise is produced and distributed in the right quantities to the right locations and at the right time as well as to minimize systemwide costs while satisfying the service levels their customers require Wholesalers firms that buy products from manufactures and resell them to retailers sell products directly to customers a set of o Retailers Distribution center a facility for the receipt storage and redistribution of goods to company stores or customers may be operated by retailers manufacturers or distribution specialists o Advertising and promotion must be coordinated with those departments that control inventory and transportation Direct marketing channel no intermediaries between the buyer and the seller o Seller is usually a manufacturer or individual o Manufacturer individual customer Indirect marketing channels manufacturers to provide goods and services to customers one or more intermediaries work with o Manufacturer retailer customer o Manufacturer wholesaler retailer customer Vertical channel conflict usually a discrepancy about goals roles or rewards conflict between groups on different levels There is Horizontal channel conflict conflict between groups on the same level o Ex Manufacturer and retailer o Ex Retailer 1 and retailer 2 Vertical marketing system Independent or conventional marketing channel members a manufacturer a wholesaler and a retailer each attempts to satisfy its own objectives and maximize its profits often at the expense of the other members unified system o Three types o The more formal the vertical marketing system the less likely conflict will a marketing channel in which the members act as a administered contractual and corporate several independent ensue Administered vertical marketing system relationships but the dominant channel member controls or holds the balance of power Power another member at a different level of distribution exists when one firm has the means or ability to dictate the actions of no common ownership or contractual a company can offer rewards often money if another company a company threatens to punish or punishes the other company for Reward power does what it wants Coercive power not undertaking certain tasks o Ex Referent power late delivery big company the big company has referent power if the small company desperately wants to be associated with the o The small company would attract other business due to the relationship with the bigger company based on getting a channel member to behave in a certain way A company relies on expertise with marketing of the product the Expertise power little B company sells Information power company A can either provide or withhold information to company B Company A has that information due to budgets size and marketing research Legitimate power because of a contractual agreement between the two firms Contractual vertical marketing systems independent firms at different levels of the marketing channel join together through contracts to obtain economies of scale and coordination and to reduce conflict Franchising a contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor o Franchise contract franchisee pays a lump sum plus a royalty on all sales in return for the right to operate a business in a specific location The franchisee also agrees to operate the outlet the exact way the franchisor wants the parent company has complete control Corporate vertical marketing system and can dictate the priorities and objectives of the marketing channel because it owns multiple segments of the channel such as manufacturing plants warehouse facilities and retail outlets Strategic relationship partnering relationship members are committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial the marketing channel Trust communication common goals interdependence and credible commitments Universal Product Code UPC are important in a strategic relationship Electronic data interchange EDI documents from a retailer to a vendor and back bar code on items computer to computer exchange of business o Reduces cycle time o Information flows quickly inventory turnover is higher o Improves the overall quality of communications through better recordkeeping fewer errors in inputting and receiving an order and less human error in the interpretation of data o The data transmitted by EDI are in a computer readable format that can be easily analyzed and used for a variety of tasks ranging from evaluating vendor delivery performance to automating reorder processes Vendor managed inventory VMI time between the decision to place an order and the receipt of Cycle time merchandise efficiency in which the manufacturer is responsible for maintaining the retailer s inventory levels in each of its stores an approach for improving marketing channel o By sharing the data and communicating it using EDI the manufacturer automatically sends merchandise to the retailer s store or distribution center when the inventory at the store reaches a prespecified level Consignment retailer at which time the retailer pays for the merchandise the manufacturer owns the merchandise until it is sold by the o Provides an incentive for the manufacturer to pick stockkeeping units and inventory levels that will minimize inventory and generate sales Push marketing strategy sales forecasts which is likely to be a collaborative process between the manufacturer wholesaler and retailer merchandise is allocated to stores based on previous o Once a forecast is developed specified quantities of merchandise are shipped pushed to distribution centers and stores at predetermined time intervals o Manufacturer works with wholesalers and retailers to get the products on the shelf by providing incentives such a slotting allowances contests for salespeople and other promotional support at all levels of the marketing channel o The goal is to increase demand for the product by providing
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