managing marketing channels and supply chains

eddie bauer's "brick, click, and flip"

integrated mix of retail stores, a website, and seasonal catalogs

supply chain dynamics at eddie bauer

delicate balance between effectiveness and efficiency in managing its multichannel marketing channel supply chain

marketing channel

consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users

middleman

any intermediary between the manufacturer and end-user markets

agent or broker

any intermediary with legal authority to act on behalf of the manufacturer

wholesaler

an intermediary who sells to other intermediaries, usually to retailers; term usually applies to consumer markets

retailer

an intermediary who sells to consumers

distributor

an imprecise term, usually used to describe intermediaries who perform a variety of distribution functions, including selling, maintaining inventories, extending credit, and so on; may also refer to wholesalers

dealer

a more imprecise term than distributor that can mean the same as distributor, retailer, wholesaler, and so forth

functions performed by intermediaries

transactional, logistical, facilitating

transactional function of intermediaries

Buying: Purchasing products for resale or as an agent for supply of a product

Selling: Contacting potential customers, promoting products, and seeking orders

Risk Taking: Assuming business risks in the ownership of inventory that can become obsolete or deteriorate

logistical function of intermediaries

assorting, storing, sorting, and transporting products

facilitating function of intermediaries

financing, grading, marketing information and research

time utility

having a product available at a certain time of year or a convenient time of day

Place Utility

Adding value to products by having them where people want them.

form utility

enhancing a product or service to make it more appealing to buyers

Possession Utility

entails efforts by intermediaries to help buyers take possession of a product or service

direct channel

a distribution channel in which producers sell directly to consumers

indirect channel

intermediaries are inserted between the producer and consumers and perform numerous channel functions

channel A

producer to consumer

channel B

Producer --> Retailers --> Consumers

channel C

Producer --> Wholesalers --> Retailers --> Consumers

channel D

producer > agent of brokers > wholesalers > retailers > consumers

digital marketing channels

make products and services available for consumption or use by consumers or organizational buyers

direct to consumer marketing channels

allow consumers to buy products by interacting with various print or electronic media without a face-to-face meeting with a salesperson

multichannel marketing

the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online

BOPUS and BORIS

-buy online and pick up in store

-buy online and return in store

dual distribution

an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product

vertical marketing systems

professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact

corporate vertical marketing system

the combination of successive stages of production and distribution under a single ownership

Forward Integration

occurs when a firm owns or controls the customers or distribution channels for its main products

contractual vertical marketing system

independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone

Wholesaler-sponsored voluntary chains

involve a wholesaler that develops a contractual relationship with small, independent retailers to standardize and coordinate buying practices, merchandising programs, and inventory management efforts

retail sponsored cooperatives

exist when small, independent retailers form an organization that operates a wholesale facility cooperatively

franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.

Manufacturer-sponsored retail franchise systems

prominent in the automobile industry, where a manufacturer such as Ford licenses dealers to sell its cars subject to various sales and service conditions

Manufacturer-sponsored wholesaler franchise system

Ex: Coca-Cola licenses bottlers (wholesalers) in various world markets that buy Coca-Cola syrup concentrate and then bottle and sell the finished product to retailers locally. exist in the soft drink industry

Service-sponsored retail franchise systems

used by firms that have designed a unique approach for performing a service and wish to profit by selling the franchise to others

Service-sponsored franchise systems

exist when franchisors license individuals or firms to dispense a service under a trade name and according to specific guidelines

administered vertical marketing system

achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership

three factors when choosing a marketing channel and intermediaries

-best coverage of target market

-best satisfy buying requirements of target market

-most profitable

density

number of stores in a geographic area

intensive distribution

a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible

exclusive distribution

a level of distribution density whereby only one retailer in a specific geographical area carries the firm's products

selective distribution

a level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products

four consumer interests

information, convenience, variety, and pre- or postsale services

Channel Conflict

arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals

Vertical Conflict

a channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailer

Disintermediation

a source of channel conflict that occurs when a channel member bypasses another member and sells or buys products direct

Horizontal Conflict

a channel conflict that occurs among channel members on the same level

channel captain

a channel member that coordinates, directs, and supports other channel members

four forms of influence

reward, expertise, identification, legitimate right

Logistics

those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost

Logistics Management

the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements

flow of the product

logistics deals with decisions needed to move a product from the source of raw materials to consumption

supply chain

the various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users

Supply Chain Management

the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to consumers

the automotive supply chain

Supplier Network -> Auto Manufacturer -> Marketing Channel -> Consumer

three steps of aligning a supply chain with marketing strategy

1-understand the consumer

2-understand the supply chain

3-harmonize the supply chain with the marketing strategy

dell's supply chain

direct marketing strategy, targeting consumers who desire having up to date computer systems customized to their needs, less efficient

Walmart's Supply Chain

reliable, lower price retailer for a wide variety of mass consumption consumer products, efficient and at the lowest possible cost, cross-docking

cross-docking

a practice that involves unloading products from suppliers, sorting products for individual stores, and quickly reloading products onto its trucks for a particular store

Bullwhip Effect

The tendency for supply chain managers at different levels of the supply chain to exaggerate the need to increase or decrease inventory in response to variation or lack of predictability in customer demand.

total logistics cost

expenses associated with transportation, materials handling and warehousing, inventory, stockouts, order processing, and return products handling

____% of every dollar earned in Amazon sales goes to logistics costs

30

customer service

the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience

time in a supply chain

refers to order cycle or replenishment time for an item, which means the time between the ordering of an item and when it is received and ready for use or sale

dependability in a supply chain

consistency of replenishment

Blockchain Technology

A decentralized digital system for recording, documenting, and facilitating transactions across all participants in a supply chain.

Convenience in a supply chain

there should be a minimum of effort on the part of the buyer in doing business with the seller

vendor-managed inventory (VMI)

an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items

reverse logistics

a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal