Chapter 14 - Marketing Channels and Supply-Chain Management PDF

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Chapter 14: Marketing Channels and Supply-Chain Management ● The distribution component of the marketing mix focuses on the decisions and activities involved in making products available to customers when and where they want to purchase them. ● An important function of distribution is to create an efective supply chain, which includes all the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer. ○ A distribution system involves frms that are “upstream” in the supply chain (producers and suppliers) and “downstream” (wholesalers and retailers) working together to serve customers and generate competitive advantage. ● Operations management is the total set of managerial activities used by an organization to transform resource inputs into goods, services, or both. ○ Organizational and system wide coordination of operations and partnerships to meet customers’ product needs ● Logistics management involves planning, implementing, and controlling the efcient and efective flow and storage of products and information from the point of origin to consumption to meet customers’ needs and wants. ○ All activities designed to move the product through the marketing channel to the end user, including warehousing and inventory management. ● Supply management: in its broadest form, refers to the processes that enable the progress of value

from raw material to fnal customer and back to redesign and fnal disposition. ○ Sourcing of necessary resources, goods, and services from suppliers to support all supply-chain members. ● Supply chain management (SCM) refers to the coordination of all activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer. It integrates the functions of operations management, logistics management, supply management, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times. It includes activities such as manufacturing, research, sales, advertising, and shipping. ○ All activities related to selling, service, and the development of long term customer relationships. ●

In efcient supply chain, upstream frms provide direct or indirect input to make the product, while downstream frms are responsible for delivery of the product and after-market services to the ultimate consumers. ● Supply-chain management should begin with a focus on the customer, who is the ultimate consumer and whose satisfaction should be the goal of all eforts of channel members. Cooperation between channel members should improve customer satisfaction while also increasing coordination, reducing costs, and increasing proft. ● Integrated information sharing among chain members is very important

● A marketing channel (also called a channel of distribution or distribution channel) is a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain. The major role of marketing channels is to make products available at the right time at the right place in the right quantities. ● Most channels are indirect and have one or more marketing intermediaries that link producers to other intermediaries or to ultimate consumers through contractual arrangements or through the purchase and reselling of products. ● Marketing channel activities performed by intermediaries: ○ Marketing information: analyze sales data and other information in databases and information systems. Perform or commission marketing research ○ Marketing management: establish strategic and tactical plans for developing customer relationships and organizational productivity ○ Facilitating exchanges: choose product assortments that match the needs of customers. Cooperate with channel members to develop partnerships ○ Promotion: set promotional objectives. Coordinate advertising, personal selling, sales promotion, publicity, and packaging ○ Price: establish pricing policies and terms of sales ○ Physical distribution: manage transportation, warehousing, materials handling, inventory control, and communication

● Wholesalers and retailers are examples of intermediaries. ● Channel decisions are critical because they determine a product’s market presence and accessibility. ● Marketing channel decisions have strategic signifcance because they generally entail long term commitments among a variety of frms (suppliers, logistic providers, and operations frms). Furthermore, it is the least flexible component of the marketing mix. ● Marketing channels create four types of utility: time, place, possession, and form. ○ Time utility is having products available when the customer wants them ○ Place utility is making products available in locations where customers wish to purchase them ○ Possession utility means that the customer has access to the product to use or to store for future use ○ Form utility is assessing, preparing, or otherwise refning the product to suit individual customer needs....