Marketing Chapter 14 Supply Chain and Channel Management

supply chain management
refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless operation
firms that buy products from manufacturers and resell them to retailers, and retailers sell the products to consumers
marketing channel
set of institutions that transfer the ownership of and move goods from the point of product to the point of consumption
logistics management
describes the integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption. (Customer service, inventory control, order processing)
distribution center
facility for the receipt, storage, and redistribution of goods to company stores or customers. Operated by retailers, manufacturers, or distribution specialists.
Universal product code
black and white bar code, 13-digits that indicates the manufacture of the item, a description, information about packaging, and special promotions.
advanced shipping notice
electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment
electronic data interchange
computer-to-computer exchange of business documents from a retailer to a vendor and back
cycle time
time between the decision to place an order and the receipt of the merchandise
vendor-managed inventory
manufacturer is responsible for maintaing the retailer’s inventory levels in each of its stores, by sharing the data via EDI
the manufacturer owns the merchandise until it is sold by the retailer, at which time the retailer pays for the merchandise
Collaborative planning, forecasting, and replenishment
sharing of forecast and related business information and collaborative planning between retailers and vendors to improve supply chain efficiency and product replenishment
pull supply chain
orders for merchandise are generated at the store level on the basis of sales data captured by POS terminals
push supply chain
merchandise is allocated to stores on the basis of forecasted demand
process of going through the goods upon receipt to make sure they arrived undamaged and that the merchandise ordered was the merchandise received
Radio frequency identification tags
tiny computer chips that automatically transmit to a special scanner all the information about a container’s contents or individual products
merchandise ready for sale is placed on a conveyor system that routes it from the unloading dock to the specific store
floor-ready merchandise
merchandise that is ready to be placed on the selling floor
ticketing and marketing
refers to affixing price and identification labels to the merchandise
pick ticket
document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas
Just-in-time inventory systems (quick response systems)
inventory management systems designed to deliver less merchandise on a more frequent basis than tradition inventory systems
lead time
amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise
independent or conventional supply chain
manufacturer, wholesaler, retailer each attempt to satisfy their own objectives and maximize their own profits, often at the expense of each others
vertical marketing system
marketing channel in which the members act as a unified system
1) Administered
2) Contractual
3) Corporate
3 types of vertical marketing systems
administered vertical mkt system
no common ownership and no contractual relationship, but the dominant channel member controls or holds the balance of power in the relationship
when one firm has the means or ability to have control over the actions of another member in a channel at a different level of distribution
Reward power
monetary incentive for getting one channel member to do what they want
Coercive power
one channel threatens to punish another channel member for not undertaking certain tasks, such as delaying payment
referent power
one member wants to be associated with the other member to attract business
Legitimate power
getting a member to behave a certain way because of a contractual agreement
Contractual vertical mkt system
firms of the supply cain join together through contracts to obtain economics of sale and coordination to reduce conflict
contractual agreement between a franchisor and franchisee that allows the franchisee employee to operate a retail outlet using a name and format developed and supported by the franchisor
corporate vertical mkt system
the portion a firm owns and controls in the supply chain
strategic relationship (partnering)
supply chain members are committed to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial
The person who coordinates deliveries to distribution centers.
expertise power
A type of marketing channel power that occurs if the channel member exerting the power has expertise that the other channel member wants or needs and can therefore get them to do what they want.
horizontal channel conflict (horizontal supply chain conflict)
a type of channel conflict in which members at the same level of a marketing channel, for example, two competing retailers or two competing manufacturers, are in disagreement or discord, such as when they are in a price war.
information power
A type of marketing channel power that occurs if the channel member exerting the power has information that the other channel member wants or needs and can therefore get them to do what they want.
quick response
An inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it; see just-in-time (JIT) systems.
The process of recording the receipt of merchandise as it arrives at a distribution center or store.
vertical channel conflict (vertical supply chain conflict)
A type of channel conflict in which members of the same marketing channel, for example, manufacturers, wholesalers, and retailers, are in disagreement or discord.

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