Chapter 11- Marketing Management

Outsourcing

3PL; attractive for firms whose own core competencies fo not include these elements. Allows firms to focus on core business

Legal issues in SCM

Exclusive dealings, exclusive territories, trying contracts

Distributor

Exclusive markets

Electronic Retailing Advantages

Extensive Selection, info available for product research and eval, build product communities, individual customer experience

Agent

Facilitate and do not own product

Facilitating Agent

Facilitate transactions with retailer

Types of Facilitating functions

Financing; Market research; Risk-taking; other services

Types of retailers

Food & General merchandise

Exclusive Dealing

Freedom to compete. EX: apple cannot tell AT&T to not sell samsung since they sell iphones

Reward power

Gaining something

Facilitating Function

Intermediaries perform activities the help fullfill completed transactions and also maintain the viability of the channel relationship

Electronic commerce

Inventory, payments, communication, systems, etc

Physical distribution functions

Logistics; integrated process of moving input materials to the producer, in-process inventory through the firm, or finished goods through the channel of distribution

Referent power

Member is respected, admired, or revered based on one of more attributes

2 Principal intermediaries

Merchant: Take title of product Agent: No title of the product

Major types of intermediaries

Middleman; Merchant Middleman; Agent; Manufacturer's Agent; Distributor; Wholesaler; Jobber; Facilitating Agent; Retailer

Tying Contracts

Mixing multiple products to the contract as a force to sell the products

Direct Channel

No intermediaries and operates strictly from producer to end-user

Distribution intensity

Number of intermediaries involved in distributing the product. Can be intensive, selective, or exclusive

Breaking Bulk

Occurs within a channel to better match quantities needed to space constraints and inventory turnover requirements. Can be performed by different intermediaries

Retailing functions

Offer Variety for Consumers; seperate large product volume into consumer purchase quantities; Maintain Inventory Levels;Make Additional Services Available to Consumers. 15% of US jobs

Aspects of Physical Distribution functions

Outbound Logistics, inbound logistics, reverse logistics

Merchant Middleman

Own the title of the product

Functions of channel intermediaries

Physical, Transaction and communication, and facilitating

Transportation modes

Pipeline, water, rail, motor, air

Exclusive Territories

Producer says to not sell to certain retailers in certain areas. This is helping a monopoly since not allowing competition in the area. Unless by selling there is dilutes the product brand.

Prioritization of Channel Functions

Push and Pull strategies

Types of Transaction and Communication functions

Selling; Buying; Marketing Communication

Retailer

Sells directly to consumers

Customer Communities

Sites where customers share stories about vendor experiences

Jobber

Stocks shelves in store on behalf of retailer

Electronic Retailing

Subset of E-commerce. Only websites and purchases

Framework on Supply Chain

Supplier to Producer to retailer to consumer

Wholesaler

Takes title & sells to retailer

Channel Conflict issues

This can ultimately impact end-users through inferior products, higher prices, and spotty inventory

Characteristics of store retailers

Type of merchandise, services imparted to consumers, assortment, differences in value equation

Vertical Marketign system (VMS)

Vertically aligned networks behaving and performing as a unified system. Forward- towards consumer and backwards towards buying producer

Network Organization

Virtual Organization; eliminated in-house business functions and activities in favor of focusing only on aspects for which it is best equipped to add value or quicker market responses

Expert power

adopt approach of utilizing their unique competencies to influence others

Nimble

be in position to be maxinally flexible, adaptable, and speedy in response to the many key change drivers afecting business

Exclusive Distribution

channel often part of an overall positioning strategy built on prestige and premium pricing

Electronic Retailing Disadvantages

customers walk away easily, Reduced Ability to Sell Features and Benefits, Security of Personal Data

Channel of distribution

entities that are aligned for the purpose of transferring products from producer to consumer or business user

Coercive power

explicit or implicit threat that a channel captain will invoke negative consequences on the channel members is not comply with requests

Communication function: Marketing Communication

intermediaries receive incentives from manufactures to participate in helping promote products

Intenstive Distribution

maximum product exposure throughout channel; typically low cost convenience goods and impulse goods

Intermediaries

middle men in the exchange process between producer and consumer

Indirect Channel

one or more indermediary channels

Value network

overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form to a maket space

Supply Chain

represents all organizations involved in supplying a firm, the members of its channel of distribution, and its end-user consumers and business users.

Communication function: Selling

sales force to represent product line

Selective Distribution

when consumers may engage in limited search such as home furnishings

Communication function: Buying

wholesaler and retailers perform eval of products

Selecting channel approaches

Distribution intensity sought within channel; control and adaptability; Channel priority functions that require investment

Value Co-creation

All SC set-ups that add value. Members of the network combine capabilities according to their expertise and the competencies required for the situation.

Retailing

Any business activity that creates value in the delivery of goods and services for personal consumption.

Channel Power

Any member of a marketing channel can exercise influence over the other members of the channel

Types of Physical Distribution functions

Breaking Bulk; Accumulating Bulk and sort; creating assortments; reducing transactions; transportation and storage

Non-store retailers

Catalog, Direct Selling, TV home shopping, vending machines

Sources of power revelvant to channels

Coercive power; Reward; expert; referent; legitimate

Disintermediation

Collapsing of marketing channels due to the elimination of one or more intermediaries. Common in the electronic Channel

Legitimate power

Contract or other formal agreements give the power

Supply Chain Management

Coordination of the value-adding flows amount the entities in a way that maximinzes overall value delivered and profit realized

Types of VMS

Corporate, Contractual, Administered

Market Makers

Dedicated sites for the exchange of products and services

Channel Conflict

Disagreeements and relationships can be strained or fall apart for members of the channel.