Marketing chapter 3 good customers

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Marketing Channels and Supply Chain Management 12 Principles of Marketing 1 Tuesday, 15 November 11 Learning Objectives After studying this chapter, you should be able to: 1. Explain how companies use marketing channels and discuss the functions these channels perform 2. Discuss how channel members interact and how they organise to perform the work of the channel 3. Identify the major channel alternatives open to a company 4. Explain how companies select, motivate, and evaluate channel members 5. Discuss the nature and importance of marketing logistics and integrated supply chain management 2 Tuesday, 15 November 11 Chapter Outline 1. Supply Chains and the Value Delivery Network 2. The Nature and Importance of Marketing Channels 3. Channel Behaviour and Organisation 4. Channel Design Decisions 5. Channel Management Decisions 6. Public Policy and Distribution Decisions 7. Marketing Logistics and Supply Chain Management 3 Tuesday, 15 November 11 1. Supply Chain and the Value Delivery Network 4 Tuesday, 15 November 11 Supply Chains and the Value Delivery Network + 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 5 Company Tuesday, 15 November 11 Supply Chains and the Value Delivery Network + Supply chain “make and sell” view includes the firm’s raw materials, productive inputs, and factory capacity. It suggests that these components should serve as the starting point for market planning. + Demand chain “sense and respond” view suggests that planning starts with the needs of the target customer and the firm responds to these needs by organising a chain of resources and activities with the goal of creating customer value 6 Tuesday, 15 November 11 Supply Chains and the Value Delivery Network + The value delivery network is the firm’s suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system 7 Company Suppliers Distributor Consumers Tuesday, 15 November 11 Supply Chains and the Value Delivery Network Marketing Channel Questions • What is the nature of marketing channels and why are they important? • How do channel firms interact and organise to do the work of the channel? • What role do physical distribution and supply chain management play in attracting customers? 8 Tuesday, 15 November 11 2. The Nature and Importance of Marketing Channels 9 Tuesday, 15 November 11 The Nature and Importance of Marketing Channels + Marketing channel (distribution channel) is a set of independent organisations that help make a product or service available for use or consumption by the consumer or business users 10 Tuesday, 15 November 11 [...]... Organisation + Vertical marketing systems (VMS) provide channel leadership and consist of producers, wholesalers, and retailers acting as a unified system and consist of: • • • Producer Wholesaler Retailer Corporate marketing systems Contractual marketing systems Administered marketing systems Consumer 21 Tuesday, 15 November 11 Channel Behaviour and Organisation + Corporate vertical marketing system integrates... Design Decisions 30 Tuesday, 15 November 11 Channel Design Decisions + Designing a channel system requires: Analysing consumer needs Setting channel objectives Identifying major channel alternatives Evaluation 31 Tuesday, 15 November 11 Analysing consumer needs Channel Design Decisions + Designing a marketing channel starts with finding out what target customers want from the channel 32 Tuesday, 15 November... Organisation + Administered vertical marketing system has a few dominant channel members without common ownership Leadership comes from size and power 25 Tuesday, 15 November 11 Channel Behaviour and Organisation + Horizontal marketing systems include two or more companies at one level that join together to follow a new marketing opportunity Companies combine financial, production, or marketing resources to accomplish... service What segments to serve Best channels to sue Minimising the cost of meeting customer service requirements 33 Tuesday, 15 November 11 Setting channel objectives Channel Design Decisions + Objectives are influenced by: • Nature of the company • Marketing intermediaries • Competitors • Environment 34 Tuesday, 15 November 11 Identifying major channel alternatives Channel Design Decisions Identifying Major... • Physical flow of products Flow of ownership Payment flow Information flow Promotion flow 16 Tuesday, 15 November 11 3 Channel Behaviour and Organisation 17 Tuesday, 15 November 11 Channel Behaviour and Organisation + Marketing channel consists of firms that have partnered for their common good with each member playing a specialised role 18 Tuesday, 15 November 11 Channel Behaviour and Organisation + Channel...The Nature and Importance of Marketing Channels Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them + Producers use intermediaries because they create greater efficiency in making goods available to target markets + Intermediaries offer the firm more than it can... Importance of Marketing Channels How Channel Members Add Value + Matching refers to shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging + Negotiation refers to reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred 13 Tuesday, 15 November 11 The Nature and Importance of Marketing. .. distribution refers to transporting and storing goods + Financing refers to acquiring and using funds to cover the costs or carrying out the channel work + Risk taking refers to assuming the risks of carrying out the channel work 14 Tuesday, 15 November 11 The Nature and Importance of Marketing Channels Number of Channel Members + Channel level refers to each layer of marketing intermediaries that performs... that performs some work in bringing the product and its ownership closer to the final buyer + Direct marketing channel has no intermediary levels; the company sells directly to consumers + Indirect marketing channel contains one or more intermediaries 15 Tuesday, 15 November 11 The Nature and Importance of Marketing Channels Number of Channel Members Connected by types of flows: • • • • • Physical flow of... marketing resources to accomplish more than any one company could alone 26 Tuesday, 15 November 11 Channel Behaviour and Organisation + Multichannel distribution system (Hybrid marketing channels) exist when a single firm sets up two or more marketing channels to reach one or more customer segments 27 Tuesday, 15 November 11 Channel Behaviour and Organisation • Multichannel Distribution Systems Advantages •