Chapter 11- Marketing Management

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.
Supply Chain Management
Coordination of the value-adding flows amount the entities in a way that maximinzes overall value delivered and profit realized
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
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.
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
be in position to be maxinally flexible, adaptable, and speedy in response to the many key change drivers afecting business
Channel of distribution
entities that are aligned for the purpose of transferring products from producer to consumer or business user
middle men in the exchange process between producer and consumer
2 Principal intermediaries
Merchant: Take title of product
Agent: No title of the product
Direct Channel
No intermediaries and operates strictly from producer to end-user
Indirect Channel
one or more indermediary channels
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
Breaking Bulk
Occurs within a channel to better match quantities needed to space constraints and inventory turnover requirements. Can be performed by different intermediaries
Types of Physical Distribution functions
Breaking Bulk; Accumulating Bulk and sort; creating assortments; reducing transactions; transportation and storage
Major types of intermediaries
Middleman; Merchant Middleman; Agent; Manufacturer’s Agent; Distributor; Wholesaler; Jobber; Facilitating Agent; Retailer
Types of Transaction and Communication functions
Selling; Buying; Marketing Communication
Communication function: Selling
sales force to represent product line
Communication function: Buying
wholesaler and retailers perform eval of products
Communication function: Marketing Communication
intermediaries receive incentives from manufactures to participate in helping promote products
Types of Facilitating functions
Financing; Market research; Risk-taking; other services
Facilitating Function
Intermediaries perform activities the help fullfill completed transactions and also maintain the viability of the channel relationship
Collapsing of marketing channels due to the elimination of one or more intermediaries. Common in the electronic Channel
3PL; attractive for firms whose own core competencies fo not include these elements. Allows firms to focus on core business
Vertical Marketign system (VMS)
Vertically aligned networks behaving and performing as a unified system. Forward- towards consumer and backwards towards buying producer
Types of VMS
Corporate, Contractual, Administered
Channel Power
Any member of a marketing channel can exercise influence over the other members of the channel
Channel Conflict
Disagreeements and relationships can be strained or fall apart for members of the channel.
Channel Conflict issues
This can ultimately impact end-users through inferior products, higher prices, and spotty inventory
Sources of power revelvant to channels
Coercive power; Reward; expert; referent; legitimate
Coercive power
explicit or implicit threat that a channel captain will invoke negative consequences on the channel members is not comply with requests
Reward power
Gaining something
Expert power
adopt approach of utilizing their unique competencies to influence others
Referent power
Member is respected, admired, or revered based on one of more attributes
Legitimate power
Contract or other formal agreements give the power
Selecting channel approaches
Distribution intensity sought within channel; control and adaptability; Channel priority functions that require investment
Distribution intensity
Number of intermediaries involved in distributing the product. Can be intensive, selective, or exclusive
Intenstive Distribution
maximum product exposure throughout channel; typically low cost convenience goods and impulse goods
Selective Distribution
when consumers may engage in limited search such as home furnishings
Exclusive Distribution
channel often part of an overall positioning strategy built on prestige and premium pricing
Prioritization of Channel Functions
Push and Pull strategies
Aspects of Physical Distribution functions
Outbound Logistics, inbound logistics, reverse logistics
Transportation modes
Pipeline, water, rail, motor, air
Legal issues in SCM
Exclusive dealings, exclusive territories, trying contracts
Any business activity that creates value in the delivery of goods and services for personal consumption.
Characteristics of store retailers
Type of merchandise, services imparted to consumers, assortment, differences in value equation
Types of retailers
Food & General merchandise
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
Non-store retailers
Catalog, Direct Selling, TV home shopping, vending machines
Electronic commerce
Inventory, payments, communication, systems, etc
Electronic Retailing
Subset of E-commerce. Only websites and purchases
Electronic Retailing Advantages
Extensive Selection, info available for product research and eval, build product communities, individual customer experience
Electronic Retailing Disadvantages
customers walk away easily, Reduced Ability to Sell Features and Benefits, Security of Personal Data
Framework on Supply Chain
Supplier to Producer to retailer to consumer
Market Makers
Dedicated sites for the exchange of products and services
Customer Communities
Sites where customers share stories about vendor experiences
Merchant Middleman
Own the title of the product
Facilitate and do not own product
Exclusive markets
Takes title & sells to retailer
Stocks shelves in store on behalf of retailer
Facilitating Agent
Facilitate transactions with retailer
Sells directly to consumers
Functions of channel intermediaries
Physical, Transaction and communication, and facilitating
Exclusive Dealing
Freedom to compete. EX: apple cannot tell AT&T to not sell samsung since they sell iphones
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.
Tying Contracts
Mixing multiple products to the contract as a force to sell the products

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