Chp 14 Supply Chain Management
Channel Cooperation
A marketing channel should be viewed as a unified supply chain Members should work toward common objectives Channel member tasks must be clearly defined
Inventory Management
Developing and maintaining adequate assortments of products to meet customers' needs
Honey Farms is a maker of fine chocolates. The company's latest product, Fudge-Dipped Strawberries, is the premier product in its Fudge-Dipped line. The product is very expensive and targeted to upscale consumers. Which form of distribution would Honey Farms be likely to use for its new product?
Exclusive
Channel conflict occurs when:
Self-interest creates misunderstanding about role expectations of channel members Communication is poor between channel members There is increased use of multiple channels has increased the chance for miscommunication and conflict
Supply Management
Sourcing of necessary resources, goods, and services from suppliers to support all supply-chain members
Rob Stevens is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ____ to maintain contact with the firms using its products.
agents
Consumers receive the benefits of place utility when
products are available in locations where consumers want to buy them.
When Sophie buys organic produce for her household using a channel with only one intermediary, that intermediary is classified as a
retailer.
order processing
the receipt and transmission of sales order information
marketing channel
(Channel of Distribution, Distribution Channel) A group of individuals and organizations that direct the flow of products from producers to customers within the supply chain
Selecting Marketing Channels
*costumer characteristics* business: -buy directly from producers in large quantities. costumer: -buy indirectly from producers (by retailers) in limited quantities. if concentrated in small geo= direct channel. if spread in large geo= indirect channel w/ intermediates. *product attributes* expensive or perishable or fragile: -short channels less-expensive and less-perishable or less-fragile: -long channels *type of org* large firms: -deal with vendors or channels small firms: -deal with regional channel members and may NOT have the resources to develop their own sales force. *competition* success or failure encourages the kind of organizational approach. competitive: -low costs for low prices to have an advantage *environmental forces* new environmental conditions: -low cost channel new tech: -modify channel new regulations: -modify channel *characteristics of intermediates* success/failure may add/remove/modify intermediates
Intensity of Market Coverage
1. Intensive -Convenience products such as coke, pringles and duracell batteries -Available in many retail outlets 2.Selective -Shopping products such as iPods, TVs, DVD players and shoes -Available in some outlets 3.Exclusive - Specialty products such as BMWs and fendi handbags. -Available in very few outlets
Electronic Data Interchange (EDI)
A computerized means of integrating order processing with production, inventory, accounting, and transportation
Just-In-Time
An inventory-management approach in which supplies arrive just when needed for production or resale
Key tasks in supply chain management
Operations Management, Supply Management, Logistics Management, Channel Management
Operations Management
Organizational and system-wide coordination of operations and partnerships to meet customers' product needs
Supply Chain Management issues
Technology -Information technology has created almost seamless distribution processes -Information sharing has reduced costs -Increased speed, flexibility, and cooperation Technology has improved service -Increasing number of innovative goods -Increased involvement of firms in management supply chain Effective supply-chain management is closely linked to a market orientation
Channel Power
The ability of one channel member to influence another member's goal achievement -Reward-coercive-referent-expertise-information-legitimate
Channel Captain
The dominant leader of a marketing channel or a supply channel -may be a producer, wholesaler, or retailer
Supply Chain Management
The goal is to achieve optimal levels of efficiency and service -The supply chain includes all entities that facilitate product distribution and benefit from cooperative efforts
Channel Integration
Vertical Channel Integration ☆ Combines 2 or more stages of the marketing channel under one management Horizontal Channel Integration ☆ Combines organizations at the same level of operation under one management ☆ Creates economics of scales - Not the best for improving distribution
Logistics management
all activities designed to move the product through the marketing channel to the end user, including warehousing and inventory management
Channel Management
all activities related to selling, service, and the development of long-term customer relationships
Overall channel goals and individual channel member goals cannot be achieved together without
cooperation.
A commonly used computerized means of integrating order processing with production, inventory, accounting, and transportation is
electronic data interchange.
To expand the number of its retail outlets in the Washington, D.C. area, Whole Foods bought out a small chain of organic food stores in northern Virginia. This type of integration is called
horizontal.
Fragile products that require special handling are more likely to be distributed through
shorter channels.
Walmart is working with its suppliers, using tools such as electronic billing, purchase order verification, and bar code technology, to integrate data used to improve overall performance. This is an example of
supply chain management.
Benetton, a leading manufacturer of knitwear in Italy, expanded its operations to include retail outlets in the United States and South America. This type of channel is called
vertical integration.