Professional Documents
Culture Documents
Supply chain: The term supply chain is too limited: like make and sell view. Its
mean that marketing planning starts from the raw material, product input.
Demand chain: It suggest a sense and response: like marketing planning starts
with the needs of target customer.
suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system.
Distribution channels:
A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business users.
Channel behavior
Each channel member depends on the others. For example: Ford Dealer depends on Ford to design cars that meet consumer needs. Ford depends on their dealers to attract consumers, convince them to buy Ford cars. Samsung role to produce consumer electronic products that consumer will like and to create demand through advertising and then distribute these Samsung products in convenient location.
Channel behavior
Channel Conflict: Disagreement among marketing channel members on goals and roles. Horizontal conflict: occurs among firms at the same level of the channel. For example some Ford dealer in Chicago might complain the other dealers in the city steal sales from them by pricing to low or by advertising outside their assigned territories. Vertical Conflict: A conflict occur between different levels of same channel. Far example: A retail distributor may refuse to carry a manufacturer's product because of low sales, further decreasing the manufacturer's total sales.
Channel Dynamics
Vertical marketing System: consists of producers, wholesalers and retailers acting as a unified system. One channel members owns the others, has contracts them, or wield (hold) so much power that they must all cooperate. Corporate VMS: A vertical Marketing System that combines successive stages of production and distribution under single ownership. For example ZARAs success secret is its control over almost every aspect of the supply chain. Contractual VMS: A VMS in which independent firms at different levels of production and distribution join together through contracts to increase sales than they could achieve alone. For example Franchise.
Channel Dynamics
Horizontal Marketing System: A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. For example: McDonalds now places express version of its restaurants in Wal-Mart stores. Multichannel Distribution System: In cases where a marketer utilizes more than one distribution design the marketer is following a multi-channel distribution system. Starbucks follows this approach as their distribution design includes using a direct retail system by selling in company-owned stores, a direct marketing system by selling via direct mail, and a single-party selling system by selling through grocery stores (they also use other distribution systems).
Types of Intermediaries: Company Sales force: Expand the companys direct sales force. Manufacturers agency: Hire manufacturers agent. Industrial distribution: Find distributors in the different regions.
Territorial Rights: The manufacturer should spell out the territorial jurisdiction of each of the distributor to avoid any territory jumping. This will also help in the distributors evaluation .