Marketing Management 2nd Edition

1
Marketing Management2nd Edition
Michael R. Czinkota and Masaaki Kotabe

• Chapter 11
• Distribution and Supply Chain Management

2
Distribution Channel

• Member organizations through which a product
  passes to reach the end user.

Intermediaries
Zero-level
Manufacturer
Manufacturer
Wholesaler
Intermediaries
Retailer
Consumer
Consumer
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Channel Decisions

• Choosing a channel is a major decision.
• Once made, the decision can often be difficult
  and expensive to change.
• Using intermediaries reduces the control of the
  producer.
• Technology is changing distribution channel
  relationships.

4
Channel Compensation

• Trade discounts
• Quantity discounts
• Promotional discounts
• Cash discounts

5
Channel Membership
Intensive distribution
Selective distribution
Exclusive distribution
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Coca-Colas Channel
Coca-Cola USA
United PackersCannery
Coca-Cola Bottling Company United, Inc.Eastern
Region -- Bottling
ChainDrug Stores
MassMerchandisers
Cold Drink
Convenience/Oil stores
Supermarkets
Eckerd, DrugEmporium
Wal-Mart,Kmart, Sams
Applebees,Outback
Texaco, BP,7-Eleven
Kroger, Bi-Lo,Publix, Etc.
Special EventsMasters Golf
CokeMachines
Consumers
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Channel Integrationbest pursued at the mature
stage of the market or product
Manufacturer
Forward integration member acquires
a downstream member
Backward integration member acquires
an upstream member
Wholesaler
Retailer
Franchise member licenses property
to independent business
Consumer
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Retailing Type of Product

• Specialty Stores
• Supermarkets
• Department stores
• Discount outlets

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Retailing Type of Service

• Self-service
• Self-selection
• Personal service

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Retailing Location

• Central shopping area
• Sites outside cities
• Catalogs
• Door-to-Door
• Television Shopping Networks
• Electronic Retailing

Three most important words in retailing Location
location location!
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Wholesaling

• Different types of wholesalers
• Cash-and-carry wholesalers
• Full service wholesalers
• Service merchandisers, or rack jobbers
• Distributors
• Agents

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PurchasingInefficient or ineffective purchasing
can easily lose far more value than the best
possible management can add
Buy from Single supplier
Buy from Multiple suppliers
Supplier
Supplier
Supplier
Supplier
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Purchasing

• Buyer must understand needs of internal customers
  (departments selling the goods or services).
• Buyer must understand the product.
• Buyer must know the supplier.
• Buyer should be part of product specification
  process.

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Other Considerations

• International Standards Organization (ISO)
  Certification
• ISO 9000 series represent quality management and
  the practice of quality assurance.
• ISO 14000 is a standard specifically targeted
  at international environmental practices by
  evaluating companies at both the organizational
  and product levels.
• Production Process Standards
• Reverse Distribution Systems

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The Supply Chain
Suppliers
Corporation
Customers
Domestic/ import sourcing
Throughflow
Domestic/ export distribution
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Supply Chain Management

• Five key decisions
• Production
• Transport
• Transit Time
• Reliability
• Cost
• Facility
• Inventory
• JIT
• EDI
• Communications

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Customer Service

• Service levels
• Customers complaints
• Customer satisfaction
• Organizing for customer service
• Internal Marketing

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Dissatisfaction Response
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Sources of Increased Customer Profitability over
Time