Transcript ch12 - GEOCITIES.ws

OHT 12.1
Marketing channels and logistics
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.2
Defining marketing channels
A marketing channel is a structure that links a group of
individuals or organisations through which
products/services are made available to the consumer or
industrial user.
The structure of channels can vary depending on the type of
market, the needs of the end consumer, and the type of
product.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.3
Intermediaries
•
Play an important role in increasing efficiency and
reducing costs.
•
There are several different types of intermediary who
come together to create different kinds of distribution
channels between manufacturer and consumer.
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Each intermediary adds a margin to the price of the
goods handled.
•
Different functions are performed by the different
intermediaries.
•
Not all intermediaries necessarily take legal title or
physical possession of the goods.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.4
Types of intermediary
•
Wholesalers - do not normally deal with the end
consumer instead deal with other intermediaries,
usually retailers. Exception to this is in the B2B market.
Wholesalers do not take legal title to the goods.
•
Retailers - sell direct to the consumer and may purchase
direct from the manufacturer or wholesaler.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.5
Types of intermediary cont.
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Distributors and dealers - add value through services
associated with stocking or selling inventory, credit and
after sales service.
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Franchises hold contracts to supply and market a
product/service to the blueprint of the franchisee.
•
Agents and brokers have legal authority to act on behalf
of the manufacturer without taking legal title to the goods
or handling the products directly.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.6
Channel structures
Channel structure = the route selected to move a product
to market through the different intermediaries.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.7
Consumer channel structures
Figure 12.1
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.8
Product information flow
Figure 12.02
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.9
B2B channels structures
Figure 12.3
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.10
Role of intermediaries (1 of 2)
•
Increase efficiency.
•
Reduce costs of individual transactions.
•
Provide value added services.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.11
Role of intermediaries (2 of 2)
Figure 12.4
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.12
Value added services
Figure 12.5
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.13
Channel strategy
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Channel structure - this should reflect the market and
product characteristics (market coverage, value, quantity
sold, margin available, etc.).
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Market coverage - considerations here include who the
end customer is, demand patterns, frequency of
ordering, degree of comparison shopping, associated
services required, etc.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.14
Alternative distribution intensities
Table 12.1
Brassington and Pettitt: Principles of Marketing, 3rd Edition
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OHT 12.15
Factors influencing channel strategy
Figure 12.6
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.16
Selection criteria for intermediaries
Table 12.2
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© Pearson Education Limited 2003
OHT 12.17
Channel competition
Figure 12.7
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.18
Vertical marketing systems
Channel members who want to co-operate and maximise
possible benefits from channel membership form close
vertical marketing systems (VMS).
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.19
Types of VMS
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Corporate VMS exist where an organisation owns and
operates other levels in the channel.
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Contractual VMS is the most prevalent form of VMS.
Members retain their independence but negotiate
contractual agreements specifying their rights, duties,
and obligations.
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Administered VMS achieve co-ordination and control
through the power of one of the channel members.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.20
Co-operation and conflict (1 of 2)
Table 12.3
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.21
Co-operation and conflict (2 of 2)
Table 12.4
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.22
Physical distribution management (PDM)
The organisation and management of the storage and
movement of goods from the production line to the end
customer.
Functions include receiving and processing orders, picking
and packing, managing the infrastructure, and physical
distribution.
Distribution can be direct using company owned transport or
indirect using external agencies.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.23
Channel management and PDM
Figure 12.8
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.24
Logistics
Focuses on the physical movement and transformation of
goods all the way from the source of supply to the point
of consumption.
Concerned with inbound raw materials and other supplies
and their movement through the plant.
Also concerned with outbound goods and the strategic
issues of warehouse location, and the management of
stock levels and information systems.
Can lower costs and raise standards of service to
customers.
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.25
Logistics cont.
Figure 12.9
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.26
Logistics cont.
Figure 12.10
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003
OHT 12.27
Customer service and transactional
variables
Figure 12.13
Brassington and Pettitt: Principles of Marketing, 3rd Edition
© Pearson Education Limited 2003