Marketing - Chapter 10

Marketing Channels and Distribution Channels

• A value delivery network includes the company, suppliers, distributors, and customers partnering to enhance the entire system's performance in delivering customer value.
• Pepsi manages a network of people within the company, including marketing, sales, finance, and operations, to make and market its beverages.
• Marketing channels, or distribution channels, are interdependent organizations that make products available for consumption, affecting every marketing decision and potentially leading to a competitive advantage.
• Channel decisions often involve long-term commitments to other firms and can impact a company's pricing and product development.
• Using intermediaries in distribution channels can provide economies, reducing the number of contacts required for transactions and adding value by bridging time, place, and possession gaps.
• Marketing intermediaries transform the assortments of products made by producers into those wanted by consumers, creating greater efficiency in making goods available to target markets.
• Channel members perform key functions such as information gathering, promotion, contact, matching, negotiation, physical distribution, financing, and risk taking.
• A channel level is a layer of intermediaries that brings the product and its ownership closer to the final buyer, and the number of intermediary levels indicates the channel's length.
• Direct marketing channels have no intermediary levels, while indirect marketing channels contain one or more intermediary levels.
• A greater number of channel levels means less control and greater channel complexity for the producer, and institutions in the channel are connected by physical product flow, ownership flow, payment flow, information flow, and promotion flow.
• From a producer's perspective, the number of channel levels affects control and channel complexity, impacting the flow of products, ownership, payments, information, and promotion.
• All the institutions in the channel are connected by several types of flows, including the physical flow of products, flow of ownership, payment flow, information flow, and promotion flow.

Marketing Logistics and Supply Chain Management

• Marketing logistics involves the physical flow of goods and related information from points of origin to points of consumption.
• It includes outbound logistics (from factory to customers), inbound logistics (from suppliers to the factory), and reverse logistics (reusing, recycling, or disposing of returned products).
• Supply chain management encompasses managing value-added flows among suppliers, the company, resellers, and consumers.
• The logistics manager coordinates activities such as forecasting, purchasing, production planning, order processing, inventory, warehousing, and transportation planning.
• The goal of marketing logistics is to deliver a targeted level of customer service at the least cost.
• Logistics functions include warehousing, inventory management, transportation, and logistics information management.
• Inventory management aims to be cost-effective and profitable, utilizing just-in-time logistics systems and RFID technology.
• Balancing inventory levels is crucial for minimizing carrying costs and obsolescence while meeting customer demand.
• Transportation choice impacts pricing, delivery performance, and customer satisfaction, with options including trucks, railroads, water carriers, pipelines, air carriers, and multimodal transportation.
• Multimodal transportation combines two or more modes, such as piggyback, fishyback, trainship, and airtruck, providing unique advantages.
• The use of RFID technology could potentially make the entire supply chain intelligent and automated in the future.
• The logistics manager’s role is crucial in coordinating various activities to ensure efficient and cost-effective physical flow of goods and information to meet customer requirements.

Test your knowledge of marketing channels and distribution channels with this quiz. Explore topics such as value delivery networks, channel decisions, intermediaries, channel levels, and flows within the distribution system. This quiz will help you understand the impact of marketing and distribution decisions on a company's performance and competitive advantage.