Marketing Channels and Supply Chain Management

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KOTLER ON MARKETING

Establish channels for different target markets and aim for efficiency, control, and adaptability.

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INTRODUCTION
Firms rarely work alone in

creating value for customers and building profitable customer relationships.

Individual firms success

depends not only on how well it performs but also on how well its entire distribution channel competes with competitors 8-3

SUPPLY CHAIN
Supply chain consists of

upstream and downstream partners. Upstream

set of firms that supply the raw

materials , components, parts , information, finances , expertise

Downstream Wholesalers, retailers

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MARKETING CHANNELS (DISTRIBUTION CHANNELS)

Set of interdependent organizations involved

in the process of making a product or service available for use or consumption by the consumer or business user. Distribution channel decision often involve long term commitments to other firms (other elements can be changed How channel members add value
Through their contacts, experience,

specialization and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. Role of marketing intermediaries is to transform the assortments of products may by producers into assortments wanted by 8-5 consumers.

How a Distributor Effects an Economy of Effort

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As more retailers develop a web presence, they often move from a brick-and-mortar to a click-and-mortar business model where customers expect channel integration. Can you identify any potential problems for these companies? Can you identify any unique marketing opportunities that such a change would offer these companies?
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CHANNEL LEVELS AND BEHAVIOUR

Channel Levels
Zero-level channel (a.k.a. direct-

marketing channel) One-level channel Two-level channel Three-level channels

Channel Behavior
Horizontal Conflict (among

distributors) Vertical Conflict (when using multiple channels)

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Channel Dynamics
Vertical Marketing Systems
Conventional marketing channel Vertical marketing systems (VMS)

Multichannel Distribution

Systems
With each new channel, the

company expands its sales and market coverage and gains opportunities to tailor its products and services. But it also creates vertical and horizontal conflicts
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Marketing Logistics and Supply Chain Management

Logistics Physical distribution of goods Involves not only outbound distributions but also inbound and reverse distribution Companies are placing

greater emphasis on logistics for several reasons

Can get competitive advantage by

using improved logistics to give customer better service or lower prices. Can yield tremendous cost savings Explosion in product variety has created a need for improved 8-10 logistics management

MAJOR LOGISTICS FUNCTIONS

Warehousing
Inventory Management Transportation

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