marketing channel management or supply chain management
refers to a set of approaches and techniques firms employ to efficiently and effectively intergrate their suppliers (manufacturers, warehouses, stores, and transportation intermediaries) into a seamless operation in which merchandise is produced and distributed in the right quantities to the right locations and at the right time, as well as to minimize systemwide costs while satisfying the service levels their customers require.
firms that buy products from manufacturers and resell them to retailers
sell products directly to consumers
one the encourages people to pass along a marketing message to other potential consumers
why are marketing channels important?
they add value and makreting channel management affects other aspects of marketing
facility for the receipt, storage, and redistribution of goods to company stores, may be operated by retailers, maunfacturers, or distribution specialists
instead of shipping to stores, these are used to ship directly to customers
no intermediaries between the buyer and the seller
indirect marketing channel
one ore more intermediaries work with maunfacturers to provide goods and services to customers
vertical channel conflict?
when supply chain members that buy and sell to one another re not in agreement about their goals, roles or rewards, this type of conflict happens
horizontal channel conflict
when there is disagreement or discord among members at the same level in a marketing channel, such as two competing retailers or two competing manufacturers
independent (conventional) marketing channel
several independent members (a manufacturer, a wholesaler, and a retailer), attempt to satisfy their own objective and maximize their profits, often at the expense of the other members
vertical marketing system
marketing channel in which th emembers act as a unified system
3 types of vertical marketing systems
1. administered2. contractual 3. corporate
administered vertical marketing system
no common ownership or contractual relationships, but the dominant channel member controls or holds the balance of power
when one firm has the means or ability to dictate the actions of another member at a different level of distribution
1. reward2. coercive3. referent4. expertise5. information 6. legitimate
main supplier offers a reward, sometimes money incentive, if the wholesaler or manufacturer do what they want them to do
when the main supplier threatens to punish or punishes the other channel member for not undertaking certain tasks
if a supplier desperately wants to be assoicated with the company such as walmart, because being known as an important walmart supplier enables that supplier to attract other business
when the dominate channel member relies on its vast experience and knowledge to decide how to market a particular suppliers products
when a channel member has information they can use to leverage the other member or members into doing what they want
power based on getting a channel member to behave in a certain way because a contractual agreement between the two firms
contractual vertical marketing systems
independent firms at different levels of the marketing channel join through contracts to obtain economies of scale and coordination and to reduce conflict
contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor
franchising is the most common type of?
corporate vertical marketing system
parent company has complete control and can dictate the priorities and objectives of the marketing channel because it owns multiple segments of the channel, such as manufacturing plants, warehouse facilities, and retail outlets
strategic relationship aka partnering relationship
when marketing channel members are committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial
successful strategic relationships require? 5 things
mutual trust, open communication, common goals, interdependence, and credible commitments
what is the flow of information and merchandise in the marketing channel? 6 flows
Flow 1 (customer to store)flow 2 ( store to buyer)flow 3 (buyer to manufacturer)flow 4 (store to manufacturer)flow 5 (store to distribution center) flow 6 ( manufacturer to distribution center and buyer)
flow 1 customer to store. UPC code?
scans the Universal product code, code that indicates the manufacturer of the item, description of the item etc...
flow 2 store to buyer. POS
point of sale, this terminal records the purchase of information and electronically sends it to the buyer at best buys corporate office
flow 6 manufacturer to distribution center and buyer. ASN?
advanced shipping notice. an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly when to expect in the shipment
electronic data interchange (EDI)
computer to computer exchange of business documents from a retailer to a vendor and back
vendor managed inventor (VMI)
approach for improving marketing channel efficiency in which the manufacturer is responsible for maintaining the retailers inventory levels in each of its stores
what are the 4 benefits of distribution centers
1. more accurate sales forecasts when retailers combine forecasts for many stores serviced by one distribution center rather than doing a forecast for each store2. they enable the reatiler to carry less merchandise int he individual stores3. easier to avoid running out of stock or having too much stock in a partcular store 4. retail store space is typically much more expensice than space at a distribution center
employees responsible for the financial planning and analysis of merchandise and its allocation to stores
person who coordinates deliveries the the distribution center
process of recording the receipt of merchandise as it arrives at a distribution center
provess of going through the goods upon receipt to make sure they arried undamaged and that the merchandise ordered was the merchandise received
advance shipping notice tells what
the distribution center what should be in eahc carton
EPC labed or radio frequency identification (RFID) tag identifies what?
the cartons contents and is scanned and automatically counted as it being received and checked
Radio frequency identification (RFID) tags
tiny computer chips that automatically transmits to a special scanner all the information about a containers contents or individual products
cross docking distribution center
when merchandise comes off the unloading dock and goes to the loading dock for the truck going to the specific store hence the name cross docked
merchandise that is ready to be placed ont he selling floor
refers to affixing price and identification labels to the merchandise
a document or display on a screen in a fork lift truck indicating how much of each item to get from specific storage areas
mobile task management technology
a wireless network and a mobile device that receives demand notification and enables a speedy response
Just in time (JIT) inventory systems AKA qucik response (QR) inventory systems
inventory management systems that deliver less merchandise on a more frequent basis than in traditional inventory systems
amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the sellers store available for sale |