Chapter 15 Marketing Channels and Supply Chain Management All the activities associated with the flow and transformation of product from raw The total set of managerial activities used by an organization to transform 1 Supply chain materials to the end consumer 2 Operations Management resource inputs into products 3 Logistics Management Planning implementing and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption 4 Supply Management 5 Supply Chain Management The processes that enable the progress of value from raw materials to final customer and back to redesign and final disposition A set of approaches used to integrate the functions of operations management logistics management supply management and marketing channel management so products are produced and distributed in the right quantities the right locations and at the right time 6 Marketing channel A set of approaches used to integrate the functions of operations management logistics management supply management and marketing channel management so products are produced and distributed in the right quantities the right locations and at the right time 7 Marketing intermediaries Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangement or through the purchase and reselling of products 8 Time Utility 9 Place Utility 10 Possession Utility Having products available when the customer wants them Making products available in locations where customers wish to purchase them Making it easy to buy information assortments displays package size shopping experience credit 11 Form Utility customer needs Formed by assembling preparing or otherwise refining the product to suit 12 Marketing channel decisions influence the rest of the marketing mix 13 Industrial Distributor An independent business that takes title to products and carries inventories An independent businessperson who sells complementary products and is 14 Manufacturers Agent compensated by commissions 15 Dual Distribution same target market 16 Strategic Channel Alliance of another 17 Channel Captain Channel Leader 18 Channel Power achievements 19 Vertical Channel Integration 20 Vertical Marketing Systems The use of two or more marketing channels to distribute the same product to the The products of one organization are distributed through the marketing channels The dominant leader of a marketing channel or a supply chain May be a producer wholesaler or retailer The ability of one channel member to influence other channel members goal Combines two or more stages of the marketing channel under one management A single channel member coordinates or manages channel activities to achieve low cost distribution aimed at satisfying target market customers 21 Horizontal Channel Integration Combines organizations at the same level of operation under one management Creates economies of scale Increases sales 2 Does not the directly improve distribution efficiency May let you afford vertical integration 22 Physical Distribution Activities used to move products from producers to consumers and other end The contracting of physical distribution tasks to third parties users 23 Outsourcing 24 Cycle Time The time needed to complete a process 25 Inventory Management Stockouts i Shortages of products that can result in loss of customers i The inventory level that signals the need to place a new order i The average time lapse between placing the order and receiving it Reorder Point Order Lead Time Usage Rate Safety Stock Just in Time i The rate at which inventory is used sold i The extra inventory a firm keeps i An inventory management approach in which supplies arrive just when needed for production or resale The physical handling of tangible goods supplies and resources The design and operation of facilities for storing and moving goods The movement of products from where they are made to intermediaries and end Two or more transportation modes are used in combination 26 Materials Handling 27 Warehousing 28 Transportation users 29 Intermodal Transportation 30 Freight Forwarders 3 31 Megacarriers 32 Dual Distribution territories 34 Tying Agreement 35 Exclusive Dealing manufacturers 36 Refusal to Deal Organizations that consolidate shipments from several firms into efficient lot sizes Freight transportation companies that offer several shipment methods Runs the risk of being viewed as anti competitive 33 Restricted Sales Territories Courts have conflicting opinions on restricting intermediaries to certain sales A supplier furnishes a product to a channel member with the stipulation that the channel member purchases other products A manufacturer forbids an intermediary to carry products of competing Producers have the right to choose channel members 4
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