Distribution and Supply Chain Management

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MARKETING STRATEGYO.C. FERRELL MICHAEL D.
HARTLINE
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Distribution and Supply Chain Management
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Distribution andSupply Chain Concepts

• Marketing Channels
• An organized system of marketing institutions
  through which products, resources, information,
  funds, and/or product ownership flow from the
  point of production to the final user.
• Physical Distribution
• Coordinating the flow of information and
  products among members of the channel to ensure
  that products are available in the right places,
  in the right quantities, at the right times, and
  in a cost-efficient manner.

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Graphical Depiction of a Supply Chain
Exhibit 9.1
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Marketing Channel Functions

• Channel Function Specializations
• Sorting
• Breaking Bulk
• Maintaining Inventories
• Maintaining Convenient Locations
• Providing Services
• Channel Effectiveness and Efficiency
• Distribution Decision Criteria
• (1) Is the channel effective?
• (2) Is the channel efficient?

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Strategic Issues in Distributionand Supply Chain
Management

• Marketing Channel Structure
• Exclusive Distribution
• Selective Distribution
• Intensive Distribution
• Channel Integration (three key factors)
• Connectivity
• Community
• Collaboration
• Creating and Enhancing Value in the Supply Chain

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Maximizing Profit Margin Performance
Exhibit 9.2
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Conflict and Collaborationin the Supply Chain (1
of 2)

• The Basis of Conflict in the Supply Chain
• Five basic sources of power
• Legitimate Power
• Reward Power
• Coercive Power
• Information Power
• Referent Power

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Factors in SuccessfulSupply Chain Collaboration
Exhibit 9.3
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Conflict and Collaborationin the Supply Chain (2
of 2)

• Collaborative Supply Chains
• Category management must be
• Customer driven
• Strategically driven
• Multifunctional
• Financially based
• Systems dependent
• Focused on immediate consumer response

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Major Components ofCategory Management
Exhibit 9.4
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Trends in Marketing Channels (1 of 2)

• Advancing Technology
• Growth of Internet and e-commerce
• Radio frequency identification (RFID)
• Shifting Power in the Channel
• Discount mass merchandise retailers
• Wal-Mart, Kmart, and Target
• Category focused retailers (category killers)
• Toys R Us, Lowes, Office Depot, AutoZone,
  and Best Buy
• Outsourcing Channel Functions
• Outsourcing is growing rapidly

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The Trend in Outsourcing
Exhibit 9.5
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Trends in Marketing Channels (2 of 2)

• The Growth of Direct Distribution and Nonstore
  Retailing
• Examples of Nonstore Channels
• Catalog and Direct Marketing
• Direct Selling
• E-Commerce
• Home Shopping Networks
• Vending
• Direct Response Advertising
• The Growth of Dual Distribution

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Legal and Ethical Issuesin the Supply Chain

• Dual Distribution
• Exclusive Channel Arrangements
• Tying Arrangements
• Counterfeit Products