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Distribution and Supply Chain - Chapter 10! :)

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by

Victor Perez

on 31 July 2013

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Transcript of Distribution and Supply Chain - Chapter 10! :)

Distribution and Supply Chain
Intermediarie
s' role in marketing channel

Marketing channel structure
Multichannel Marketing
Logistic and Supply Chain Management

Logistics
helps get the right amount of the right products to the right place at the right time at the lowest possible cost.



Vertical marketing system
Key Logistics Functions in a Supply Chain
Channel Choice and Management
L5
L6
L7
THANKS!
Factors Affecting Channel Choice
Market Factors
Geographic concentration of the market:
Concentrated in a few areas = direct sale is practical.
Geographically dispersed = direct sale is likely to be
impractical due to high travel costs
.
Sellers may establish:

Sales branches in densely populated markets and;
Use intermediaries in less-concentrated markets.
Numbers of potential customers:
Few potential customers
Bombardiers
Use its own sales force
to sell directly to ultimate
customers or business users.
Larger number of customers
Tim Hortons has 4,288 systemwide restaurants, including 3,453 in Canada, 808 in the United States and 27 in the Gulf Cooperation Council.
Source: http://www.timhortons.com/ca/en/about/profile.html.
Acessed July 28, 2013.
Tim Hortons
For a larger number of customers, the manufacturer would probably use intermediaries (franchisee).
Type of market:
Consumers products = retailers or;
Business products = direct or intermediaries.
Order size:
Direct distribution = order size is large (large grocery chains).
Do not justify a direct sale = small independent grocery and convenience stores.
Product Factor
Technical factors
Highly sophisticated products = direct to buyers.
Must provide:

Pre-purchase and pos-purchase service;
Typically wholesalers do not do these task.
Perishability:
Some goods such as milk and bread fairly quickly.
Products go directly from the producer to the retailer,
no matter the size of the order
.
Unit value:
"The price attached to each unit of a product affects the amount of funds available for distribution"
Bombardier - Can afford to use its own employees to sell aircrafts.

Hershey Canada - Convenience stores, vending machines and gasoline service stations (
low unit-value products
).
Product life cycle:
Products such as Apple iPod become very popular, easy to operate, and available in more mainstream channels.
Company Factors
Financial resources and ability of management.
Limited financial resources or no know-how = use intermediaries (selling agents or manufacturer's agents).
Desire for channel control:
Direct control = control their product's distribution (
may be more costly
).
Gap Inc. assures
distribution with
its more than
3,000 Gap stores.
Advantage
: Marketed properly and
merchandised prominently.
Channel Design Considerations
Target Market Coverage
Selective
distribution
Intensive
distribution
Exclusive
distribution
Many
retailers (as many as possible)
There are 1.7 billion servings of Coca-Cola sold every day, according to our 2010 annual report.
Source: http://www.coca-cola.co.uk/faq/products/how-many-cans-of-coca-cola-are-sold-worldwide-in-a-day.html
Few
retail outlets
Only one
retail outlet
Yatchs and more.
Satisfying Buyer Requirements
Information
Convenience
Variety
Pre-and / or Post-Sale Services
Profitability
Revenues earned minus cost for each channel.
Cost =
critical factor
of channel profitability.
Costs includes
distribution
,
advertising
, and
selling expenses
.
Channel Relationships: Conflict and Cooperation
Conflict in Marketing Channels
Channel Conflict
Horizontal Conflict
Vertical Conflict
(can be
disintermediation
)
Cooperation in Marketing Channels
Captain Channel

Coordinates
Directs
Supports other channel members
Cost-effective organization of the: flow of raw materials, in-process inventory,
finished goods, and related information:

Point of origin
Point of consumption
Satisfy customer requirements

Logistic Management
Supply Chain
Supply Chain versus Marketing Channels
Supply Chain
Longer
Raw materials and finished goods
Includes suppliers plus wholesalers and retailers

Marketing Channels
Shorter
Finished goods
Focus on retailers

Supply Chain Management
Integration and organization of information
and logistics activities
Creating and delivering goods and services
Provide value to consumers

How distribution channel works:
The automotive supply chain
Supply Chain Management
and Marketing Strategy
Goals of marketing strategy determine the management focus of the supply chain
In order to align the strategies, you need to:
1.
Understand customer segment needs
2.
Understand the supply chain
3.
Harmonize the supply chain with marketing strategy

Harmonizing the Supply Chain and Marketing Strategy
Dell Computer Corporation --> Responsive supply chain

Wal-Mart --> Efficient supply chain

What is marketing channel ?
the set of individuals or firms involved in the process of marketing a product available
Make the flow of goods from producer to consumer through intermediaries
6 kinds of intermediaries
How to create value
?
3 function of intermediaries
5 benefits for consumer
2 types of marketing channel
business
for consumer
for business
Electronic marketing channel
What is it ?
dual presence ofmarketing channel

traditional ( face to face )

e - marketing ( online )
Why ?
market environment is changing...
2 roles of multichannel marketing
promotional
Benefits for consumer
brows & buy
(anytime, anywhere, &any way)
-

cross channel shop
- get many information
-compare price
Global channel strategy
what is it ?
3 types of vertical marketing
- corporate
- administered
- contractual : 3 variation

4 types of
franchise arrangement
Victor & Yukari
Outline
- introduction
- Intermediaries' role in marketing channel
- Channel structures
- Multichannel marketing
- Vertical marketing
- Channel choice & management
- Logistic & supply chain management
- Key logistics function in a supply chain
- Conclusion
agent / broker
wholesaler
retailer
distributor
transactions
logistics
victor
facilitation
time
place
form
information
possession
consumer
transactional
professionally managed & centrally coordinated marketing channels designed to achieve channel economies & maximum marketing impact
# wholesaler sponsored voluntary chains
# retailer sponsored cooperatives
# franchise program
- manufacture sponsored retail F.S
- manufacture sponsored wholesale F.S
- retail F.S
- service F.S
Introduction
What do you want to buy ?
Transportation
Cost
Time
Capability
Dependability
Accessibility
Frequency
Order Processing
Eletronic data interchange (EDI)
The use of EDI increases the speed, accuracy and operations between retailer and supplier.
Inventory Management
Just-in-time (JIT) inventory system
Warehousing
I didn't forget the
quiz
!
1. Channel conflict
2. Disintermediation
3. EDI
4. Exclusive distribution
5. Intensive distribution
6. JIT
7. Logistics
8. Selective distribution
9. Supply chain
10. Supply chain management
if...there is
no intermediary...
we have intermediary !!
expensive...too much time...
strategic alliance
& dual distribution
1, cross channel shopper
2, dual distribution
3, electronic marketing channel
4, franchising
5, intermediaries
6, marketing channel
7, multichannel marketing
8, vertical marketing systems
more opportunity
for selling
Full transcript