Marketing Management 2nd Edition

1. Marketing Management2nd Edition Michael R. Czinkota and Masaaki Kotabe Chapter 11: Distribution and Supply Chain Management

2. Distribution Channel • Member organizations through which a product passes to reach the end user. Intermediaries: Zero-level: Manufacturer Manufacturer Wholesaler Intermediaries Retailer Consumer Consumer

3. Channel Decisions • Choosing a channel is a major decision. • Once made, the decision can often be difficult and expensive to change. • Using intermediaries reduces the control of the producer. • Technology is changing distribution channel relationships.

4. Channel Compensation • Trade discounts • Quantity discounts • Promotional discounts • Cash discounts

5. Channel Membership Intensive distribution Selective distribution Exclusive distribution

6. Coca-Cola’s Channel Coca-Cola USA United PackersCannery Coca-Cola Bottling Company United, Inc.Eastern Region -- Bottling Supermarkets Convenience/Oil stores Cold Drink MassMerchandisers ChainDrug Stores Kroger, Bi-Lo,Publix, Etc. Texaco, BP,7-Eleven Applebee’s,Outback Wal-Mart,Kmart, Sam’s Eckerd, DrugEmporium Special EventsMaster’s Golf CokeMachines Consumers

7. Channel Integrationbest pursued at the mature stage of the market or product Manufacturer Forward integration: member acquires a downstream member Backward integration: member acquires an upstream member Wholesaler Retailer Franchise: member licenses property to independent business Consumer

8. Retailing: Type of Product • Specialty Stores • Supermarkets • Department stores • Discount outlets

9. Retailing: Type of Service • Self-service • Self-selection • Personal service

10. Retailing: Location • Central shopping area • Sites outside cities • Catalogs • Door-to-Door • Television Shopping Networks • Electronic Retailing Three most important words in retailing: Location … location … location!

11. Wholesaling • Different types of wholesalers: • Cash-and-carry wholesalers • Full service wholesalers • Service merchandisers, or “rack jobbers” • Distributors • Agents

12. PurchasingInefficient or ineffective purchasing can easily lose far more value than the best possible management can add Buy from Single supplier Buy from Multiple suppliers Supplier Supplier Supplier Supplier

13. Purchasing • Buyer must understand needs of internal customers (departments selling the goods or services). • Buyer must understand the product. • Buyer must know the supplier. • Buyer should be part of product specification process.

14. Other Considerations • International Standards Organization (ISO) Certification • ISO 9000 series represent quality management and the practice of quality assurance. • ISO – 14000 is a standard specifically targeted at international environmental practices by evaluating companies at both the organizational and product levels. • Production Process Standards • Reverse Distribution Systems

15. The Supply Chain Suppliers Corporation Customers Domestic/ import sourcing Throughflow Domestic/ export distribution

16. Supply Chain Management • Five key decisions: • Production • Transport • Transit Time • Reliability • Cost • Facility • Inventory • JIT • EDI • Communications

17. Customer Service • Service levels • Customers complaints • Customer satisfaction • Organizing for customer service • Internal Marketing

18. Dissatisfaction Response

19. Sources of Increased Customer Profitability over Time