Marketing Channels and

Supply Chain Management

By: Jerielyn V. Reyes

 Distribution
• Place is where the product is made available
consistent with the target market purchasing
pattern.
• Marketing channel is a set of interdependent
organization involved in the process of making a
product or service available.
• Intermediaries are firms that help the
company to promote, sell and distribute its
goods to final buyers.
Number of Channel Levels
 Intermediaries
• Merchant Middlemen - buy, take title to and resell the
merchandise
•Wholesaler
• Retailer
• Agent Middlemen - negotiate on behalf of the producers
but do not take title to the goods
• Brokers, Manufacturers representative , Sales agents

• Facilitators- assist in the performance of distribution but

neither take title to goods nor negotiate purchases or sales
• Transportation companies, Independent warehouses,
Banks
• Advertising agencies
• Facilitate the exchange process by cutting the
number of contacts necessary

 Adjust for discrepancies in the market’s

assortment of goods and services via sorting
Distribution Channel Functions
Information
Promotion
Negotiation
Ordering
Financing
Risk taking
Physical possession
Payment
Title
 Channel Management
Channel Conflict
Horizontal Conflict
Occurs among firms at the same channel
level sometimes results from disagreements
among channel members
Vertical Conflict
Occurs among firms at different channel
levels
Causes of Marketing Channel Conflict
• Goal Incompatibility
• Domain Dissensus
• Differing Perceptions of Reality

Effects on Marketing Channel Performance

• Channel members may become less cooperative
• Channel members may share less information
• May have less time for routine operation
 Channel Systems
Producer
Producer

Wholesaler Wholesaler
Retailer

Retailer

Consumer
Consumer

Conventional Marketing Vertical Marketing

System System
 Vertical Marketing Systems
• VMS consist of producers, wholesaler, and
retailers acting as a unified system. One channel
member owns the other, has contract with them,
or wields so much power that they must all
cooperate.
• Three major types of VMS
Corporate
Contractual
Administered
Corporate:
Corporate a VMS in which a single owner
operates at each stage in its marketing channel.
• Contractual: a VMS that consist of independent firms
at different levels of marketing channel. Join together
through contract to obtain more economies and sales
impact
Ex:- Franchise organization.
• Administered:
Administered : VMS that achieves channel
coordination when a dominant channel member
exercises its power
 Horizontal Marketing System
• In this two or more companies at one level join
together to follow a new marketing opportunity.
Multi Channel Distribution System
• Multichannel marketing occurs when a single firms
sets up two or more marketing channel to reach to
one or more customer segment.

Producer

Wholesaler

Retailer Retailer

Consumer Consumer Consumer

Segment 1 Segment 2 Segment 3
Changing Channel Organization

• Disintermediation

• Increased use of internet as channel.

• Conflict with established reseller channels.

 Types of Intermediaries
Channel alternatives:

Company Sales force - expand the company’s direct

sales force.

Manufacturer’s Agency – independent firms handling

related products from many companies.

Industrial Distributors - distributors in the different

regions who will buy and carry device where you can give
exclusive distribution adequate margins and
promotional support.
The Number of Intermediaries in each level

Strategies
Intensive Distribution - stocking products in
numerous outlets
Exclusive Distribution - limited number of dealers
with exclusive right to distribute the product within
territories.
Selective Distribution – the use of more than one, but
fewer than all, of the intermediaries who are willing to
carry a company’s product
 Marketing Logistics and Supply
Chain Management
• Involves getting the right product to the right
customer in the right place at the right time

• Inbound distribution
• Outbound distribution
• Reverse distribution
Major Logistics Functions
• Warehousing
• Inventory Management
• Transportation
Marketing Logistics and Supply
Chain Management

• Transportation Carrier Options

• Truck
• Railroads
• Water carriers
• Pipelines
• Air
• Internet
• Intermodal
• Third-party
Thank You!!!