MKTG 10-Chapter 13: Supply Chain Management and Marketing Channels

Business trends that are affecting supply chain management...

-Outsourcing logistics -maintaining a secure supply chain and minimizing supply chain risk -Maintaining a sustainable supply chain

8 Critical Business Processes

1. Customer relationship management 2. Customer service management 3. Demand management 4. Order fulfillment 5. Manufacturing flow management 6. Supplier relationship management 7. Product development and commercialization 8. Returns management

Retailer

A channel intermediary that sells mainly to consumers

Fourth-Party Logistics Company (4PL or logistics integrator)

A consulting-based organization that assesses another's entire logistical service needs and provides integrated solutions, often drawing on multiple 3PL's for actual service.

Strategic Channel Alliance

A cooperative agreement between business firms to use the other's already established distribution channel.

Direct Channel

A distribution channel in which producers sell directly to consumers

Third-Party Logistics Compant (3PL)

A firm that provides functional logistics services to others

Selective Distribution

A form of distribution achieved by screening dealers to eliminate all but a few in any single area. Ex. Major industrial equipment, Rolls Royce Automobiles

Intensive Distribution

A form of distribution aimed at having a product available in every outlet where target customers might want to buy it. Ex. HBO

Exclusive Distribution

A form of distribution that establishes one or a few dealers within a given area.

Order Fulfillment Process

A highly integrated process, often requiring persons from multiple companies and multiple functions to come together and coordinate to create customer satisfaction at a given place and time.

Outsourcing (Contract Logistics)

A manufacturer's or supplier's use of an independent third party to manage an entire function of the logistics system, such as transportation, warehousing, or order processing.

Supply Chain Analytics

Data analyses that support the improved design and management of the supply chain.

Digital Channels

Electronic pathways that allow products and related information to flow from producer to consumer.

Returns Management Process

Enables firms to manage volumes of returned product efficiently while minimizing returns-related costs and maximizing the value of the returned assets to the firms in the supply chain.

Electronic Distribution

Includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals.

Product Development and Commercialization Process

Includes the group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms.

5 Characteristics of a Supply Chain Oriented Firm

They are credible They are benevolent They are cooperative They have the support of top managers They are effective at conducting and directing supply chain activity.

Intermediaries in marketing channels perform 3 essential functions that enable goods to flow between producer and consumer:

Transactional functions Logistical functions Facilitating function

A product can take..

any of several possible routes to reach the final consumer.

Marketing Channels are valuable...

because they provide a route for products and services to reach the customer.

A marketing channel..

can be viewed as a canal or pipeline through which products, their ownership, communication, financing, payment, and accompanying risk flow to the consumer.

M-Commerce

the ability to conduct commerce using a mobile device for the purpose of buying or selling goods or services.

Nearshoring

The transfer of an offshored activity from a distant to a nearby country.

Dual Distribution (multiple distribution)

The use of two or more channels to distribute the same product to target markets

Place Utility

The usefulness of a good or service as a function of the location at which it is made available.

Marketing Channel (Channel of distribution)

A set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer.

Sustainable Supply Chain Management

A supply chain management philosophy that embraces the need for optimizing social and environmental costs in addition to financial costs.

Demand-Supply Integration (DSI)

A supply chain operational philosophy focused on integrating the supply-management and demand-generating functions of an organization

Supply Chain Orientation

A system of management practices that are consistent with a "systems thinking" approach.

Drop and Shop

A system used by several retailers that allow customers to bring used products for return or donation at the entrance of the store.

Customer Relationship Management (CRM) process

Allows companies to prioritize their marketing focus on different customer groups according to each group's long-term value to the company or supply chain.

Merchant Wholesaler

An institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them.

Supply Chain Agility

An operational strategy focused on creating inventory velocity and operational flexibility simultaneously in the supply chain.

Business Processes

Bundles of interconnected activities that stretch across firms in the supply chain

Reverse Channels

Channels that enable customers to return products or components for reuse or re-manufacturing.

Manufacturing Flow Management Process

Concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process.

Supply Chain Management

Coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.

Three-Dimensional Printing (3DP)

Creation of three-dimensional objects via an additive manufacturing (printing) technology that layers raw material into desired shapes.

Public-Private Partnerships (PPP)

Critical to the satisfaction of both company and societal interests and provide a mechanism by which very-large scale problems or opportunities can be addressed.

Supplier Relationship Management Process

Supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers.

When firms practice good supply chain management...

Their functional departments or areas, such as marketing, research and development, and/or production, are integrated both within and across the linked firms.

Factors Affecting Channel Choice

Market Factors Product Factors Producer Factors

A Key Principle of Supply Chain Management

Multiple entities (firms and/or their functional areas) should work together to perform tasks as a single, unified system, rather than as multiple individual units acting in isolation.

Nontraditional Channels

Non-physical channels that facilitate the unique market access of products and services

Customer Service Management Process

Presents a multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced.

5 Types of External Integration

Relationship integration Measurement integration Technology and planning integration Material and service supplier integration Customer integration

Gray Marketing Channels

Secondary channels that are unintended to be used by the producer, and which often flow illegally obtained or counterfeit product toward customers.

Demand Management Process

Seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and creating demand-related plans of action prior to actual customer purchasing behavior.

Supply Chain

The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function.

Form Utility

The elements of the composition and appearance of a product that make it desirable.

Time Utility

The increase in customer satisfaction gained by making a good or service available at the appropriate time.

Exchange Utility

The increased value of a product that is created as its ownership is transferred.

Offshoring

The outsourcing of a business process from one country to another for the purpose of gaining economic advantage.

Cloud Computing

The practice of using remote network servers to store, manage, and process data.

Big Data

The rapidly collected and difficult-to-process large-scale datasets that have recently emerged, and which push the limits of current analytical capability.

Order Cycle Time

The time delay between the placement of a customer's order and the customer's receipt of that order.

Several technological advances and business trends are affecting the job of the supply chain manager today

True

Supply Chain Integration

When multiple firms or business functions in a supply chain coordinate their activities and processes so that they are seamlessly linked to one another in an effort to satisfy the customer.

Agents and Brokers

Wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers.