Marketing*Channels

12

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 Supply chain
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Upstream partners

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 Downstream partners

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 Supply&Chains&and&the&
Value&Delivery&Network
Supply&Chain&Partners

Upstream)partners)include(raw(material(
suppliers,(components,(parts,(information,(
finances,(and(expertise(to(create(a(
product(or(service

Downstream)partners)include(the(marketing(
channels(or(distribution(channels(that(
look(toward(the(customer
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12 - 5
 Downstream

Wholesalers
Manufacturer

Direct/Supply

Distributors Consumers
Retailers
 The$Nature$and$Importance$of$$$
Marketing$Channels
How$Channel$Members$Add$Value

Intermediaries offer%producers%greater%
efficiency%in%making%goods%available%to%
target%markets.%Through%their%contacts,%
experience,%specialization,%and%scale%of%
operations,%intermediaries%usually%offer%
the%firm%more%than%it%can%achieve%on%its%
own.
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How%channel%members Add Value

PRODUCER CUSTOMER

PRODUCER CUSTOMER

PRODUCER 9 CUSTOMER

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How%channel%members Add Value

PRODUCER CUSTOMER

DISTRIBUTOR
PRODUCER CUSTOMER

PRODUCER
6 CUSTOMER

©2012%Pearson%Education
Exhibit
Samsung 13.1 LG

How Marketing Channels Reduce the

Number of Required Transactions

Samsung LG

Dienmayxanh
 Channel'Functions

Gather and distribute information

Engage in promotion
Contact prospective buyers
Match offer to buyer’s needs
Negotiate transaction

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 Channel'Functions

Physical distribution of goods

Finance transactions along channel
Assume risks of channel work

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 Channel Levels
CONSUMER)CHANNEL

PRODUCER PRODUCER PRODUCER

WHOLESALER

RETAILER RETAILER

CONSUMER CONSUMER CONSUMER

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 Number'of intermediaries
Few Many

Number of
Outlets

EXCLUSIVE SELECTIVE INTENSIVE

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Intensive distribution
Stocking the product in as many outlets as possible.

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 Exclusive distribution
Exclusive distribution:%
Purposely%limit%the%
number%of%
intermediaries%handling%
their%products.%The%
producer%gives%only%a%
limited%number%of%
dealers%the%exclusive%
right%to%distribute%its%
products%in%their%
territories.%
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Selective distribution
Selective distribution:%This%is%the%
use%of%more%than%one,%but%fewer%
than%all,%of%the%intermediaries%who%
are%willing%to%carry%a%company’s%
products.%

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Channel management

SELECT% MANAGE% MOTIVATE% EVALUATE%

CHANNEL% CHANNEL% CHANNEL% CHANNEL%
MEMBERS MEMBERS MEMBERS MEMBERS

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Logistics

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 Warehousing

Inventory Management

Transportation

Information Management

Logistics functions
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Warehousing
©2012%Pearson%Education
 Marketing*Logistics*and*
Supply*Chain*Management
Warehousing,Decisions
• How%many
• What%types
• Where%to%locate
• Warehouses
• Distribution%centers

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Inventory
Control
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 Marketing*Logistics*and*
Supply*Chain*Management
Inventory)Management
• Just&in&time+systems
• RFID
– Knowing+exact+product+location
• Smart+shelves
– Placing+orders+automatically

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 Marketing*Logistics*and*
Supply*Chain*Management
Major&Logistics&Functions
Transportation&affects'the'pricing'
of'products,'delivery'
performance,'and'condition'of'
the'goods'when'they'arrive

Truck Rail Water

Pipeline Air Internet

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 Information
management

©2012%Pearson%Education
 Marketing*Logistics*and***********
Supply*Chain*Management
Logistics(Information(Management

Logistics(information(management is#the#
management#of#the#flow#of#information,#
including#customer#orders,#billing,#inventory#
levels,#and#customer#data
• EDI#(electronic#data#interchange)
• VMI#(vendor?managed#inventory)

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All#rights#reserved.#No#part#of#this#publication#may#be#reproduced,#stored#in#a#
retrieval#system,#or#transmitted,#in#any#form#or#by#any#means,#electronic,#
mechanical,#photocopying,#recording,#or#otherwise,#without#the#prior#written#
permission#of#the#publisher.#Printed#in#the#United#States#of#America.

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