5/23/2018 Ch11 Marketing Channels and Supply Chain Management

1/15

C

opyright2

005Pearson

EducationInc.

Chapter 11. Marketing Channels: Delivering

Customer Value

I nstructor name: Tjetjep Djatnika

(AN 017 N)

Study Program: D3 Banking&F inance

Department: Accounting& Finance

Course name: PEMASARAN

Course code: KKAB2042

Student Group: 1A, 1B, 1C

School name: Bandung State of

Polytechnic

Weight: 2 SKS

Lecture Duration: 2 hours each week

for 16 weeks

Principles of Marketing,Sixth Canadian Edition

http://www.pearsoned.ca/kotler/

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

2/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.2

Learning Objectives

After studying this chapter, you should be able to:

Explain why companies use distribution channels and discuss

the functions that these channels perform

Discuss how channel members interact and how they organize

to perform the work of the channel

Identify the major channel alternatives opento a company

Explain how companies select, motivate, and

evaluate channel members

Discuss the nature and importance of physical

distribution

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

3/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.3

Important Terminology

Marketing (distribution) channel:set of interdependentorganizations involved in making a product available for use or

consumption; from the producer down Supply chain:includes upstream

supplier partners, as well as downstream

channel partners Value-delivery network:all those

who partner with each other to improve

the performance of the supply chain

system; including the company,

suppliers, distributors, and even,customers

Sense-and-respond view

Make-and-sell view

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

4/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.4

Using Marketing Intermediaries

Intermediaries reduce the number of contacts needed to cover a market

Transform assortments made by producers into assortments desired by

consumers

Help to complete transactions:

Information

Promotion

Contact

Matching

Negotiation

Fulfill completed transactions:

Physical distribution

Financing

Risk taking

Figure 13.1

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

5/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.5

Consumer Marketing Channels

Channel level:layer of intermediaries that performs some work inbringing the product and its ownership closer to the final buyer

Direct:no intermediary levels

Indirect:containing one or more intermediary levelsFigure 13.2

Flows between

levels: Physical

Ownership

Payment

Information Promotion

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

6/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.6

Channel Behaviour

Channel conflict:disagreements between marketing channelmembers on goals and roles-who should do what and for what

rewards

Horizontal conflict:between

firms on the same channel level

Vertical conflict:between firmson different levels of the channel

Some conflict encourages healthy

competition which produces

innovation and better performance

Too much conflict becomesdysfunctional

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

7/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.7

Types of Marketing Channels

Conventional distribution channel:

One or more independent producers, wholesalers, and retailers

Each seeking to maximize its own profits

Vertical marketing system

(VMS):

Producers, wholesalers, and retailers

Act as a unified system

One channel member owns, has

contracts with, or has so much

power that they all cooperate Franchise organization

Horizontal marketing system

Figure 13.4

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

8/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.8

Hybrid Marketing Channel

Multichannel distribution system:a single firm setsup two or more marketing channels to reach one or more

customer segments

Disintermediation:

Displacment of

traditionalresellers by new

types of

intermediaries or

by selling direct

Figure 13.5

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

9/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.9

Setting Channel Objectives

Channel objectives influenced by:

Nature of the company (size/financial position) and its products

Marketing intermediaries

Competition

Marketing environment

Identifying major

alternatives:

Types of intermediaries

Number of

intermediaries Responsibilities of each

channel member

Types of

intermediaries:

Company sales

force

Manufacturers

agency

Industrialdistributors

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

10/15

C

opyright2

005Pearson

EducationInc.

Principles of Marketing,Sixth Canadian Edition

13.10

Number of Intermediaries

Also known as intensity of distribution

Intensive

distribution

As many outlets

as possible

Convenience

goods

Selective

distribution

More than one, but

not all outlets

Shopping

goods

Exclusive

distribution

One outlet per

market area

Specialty

goods

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

11/15

C

opyright2

005PearsonEducationInc.

Principles of Marketing,Sixth Canadian Edition

13.11

Channel Management Decisions

Selecting channel members: companies will vary in theirability to attract qualified intermediaries

Channel member history, reputation, financial position, location

Other product lines carried, facility

Cooperativeness, future growth potential

Managing & motivating: Partner relationship

management

Programs, contests, sales

incentives

Cooperative advertising

Product/sales training

Evaluating channel

members:

Performance standards

for sales, market share,

customer service levels,inventory carried, and

participation in company

programs

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

12/15

C

opyright2

005PearsonEducationInc.

Principles of Marketing,Sixth Canadian Edition

13.12

Public Policy and Distribution Decisions

Exclusive dealing

Exclusive territories

Tying agreements

Dealers rights

Sources of supply Purchasing and shelving

policies

Slotting allowances

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

13/15

C

opyright2

005PearsonEducationInc.

Principles of Marketing,Sixth Canadian Edition

13.13

Supply Chain Management

Marketing logistics(physical distribution):planning,implementing, and controlling the physical flow of materials, final

goods and related information

Supply chain management:managing upstream anddownstream value-added flows of materials, final goods, and related

information among suppliers, the company, resellers, and final

consumers

Figure 13.6

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

14/15

C

opyright2

005PearsonEducationInc.

Principles of Marketing,Sixth Canadian Edition

13.14

Supply Chain Management (continued)

Goal:provide a targeted level of customer service at the least cost

Major logistics functions:

Warehousing:storage and distribution centres

Inventory management:balance customer needs with cost

Transportation:speed costs money, how fast do you need it?

Rail, trucks, water, pipeline, air, and the Internet

Figure 13.6

5/23/2018 Ch11 Marketing Channels and Supply Chain Management

15/15

C

opyright2

005PearsonEducationInc.

Principles of Marketing,Sixth Canadian Edition

13.15

In Conclusion

The learning objectives for this chapter were:

Explain why companies use distribution channels and discuss

the functions that these channels perform

Discuss how channel members interact and how they organize to

perform the work of the channel

Identify the major channel alternativesopen to a company

Explain how companies select, motivate,

and evaluate channel members

Discuss the nature and importance of

physical distribution