Chapter 14 - Marketing Channels and Supply Chain Management

larger firms

- are in a better position to deal with vendors or other channel members

smaller firms

- have great brand value on a smaller level

supply chain

All the organizations and activities involved with the flow and transformation of products from raw materials through to the end consumer

strategic channel alliance

An agreement whereby the products of one organization are distributed through the marketing channels of another organization

just-in-time

An inventory-management approach in which supplies arrive just when needed for production or resale

vertical channel integration

Combining two or more stages of the marketing channel under one management

recycling

Converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products

digital distribution

Delivering content through the internet to a computer or other device

inventory management

Developing and maintaining adequate assortments of products to meet customers' needs

third-party logistics (3PL) firms

Firms that have special expertise in core logistics activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently

logistics

Manage transportation, warehousing, materials handling, inventory control, and communication.

operations management

Managing activities from production to final delivery through system-wide coordination

marketing intermediaries

Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products

materials handling

Physical handling of tangible goods, supplies, and resources

procurement

Processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information

purchasing

The act of negotiating and executing transactions to buy and sell goods, materials, and services

supply chain management

The coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer

warehousing

The design and operation of facilities for storing and moving goods

sourcing

The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity

marketing channel

a group of individuals and organizations that direct the flow of products from producers to customers within the supply chain

industrial distributor

an independent business organization that takes title to industrial products and carries inventories

marketing information

analyze sales data and other information in databases and information systems. Perform or commission marketing research

logistics management

managing the efficient and effective flow of materials, products, and information

Channel Integration

occurs when one business owns the organizations at other levels of the channel

channels for business products

producer industrial distributor agent/broker channel organizational buyers

transportation modes

railroads, trucks, waterways, airways, pipelines

cycle time

the time needed to complete a process

multichannel distribution

the use of a variety of marketing channels to ensure maximum distribution

percentage of total distribution costs

transportation - 45% warehousing - 22% inventory carrying - 24%

intermodal transportation

two or more transportation modes used in combination

exclusive distribution

using a single outlet in a fairly large geographic area to distribute a product

intensive distribution

using all available outlets to distribute a product

selective distribution

using only some available outlets in an area to distribute a product

horizontal channel integration

combining organizations at the same level of operation under one management

Types of Marketing Channels

consumer products and business products

channels for consumer products

direct channel retailer channel wholesaler channel agent/broker channel

channel management

directing flow of products

channel conflict

disagreements among marketing channel members on goals, roles, and rewards - who should do what and for what rewards

channel cooperation

enables retailers, wholesalers, suppliers, and logistics providers to speed up inventory replenishment, improve service, and cut the costs of bringing products to the customer

distibution

the decisions and activities that make products available to consumers when and where they want to purchase them