Supply Chain Management and Channel Behavior

Supply Chain

• Upstream partners help to provide raw materials, components, parts, information, finances, and expertise needed to create a product or service.
• Downstream partners, such as wholesalers and retailers, form a vital connection between the firm and its customers.
• Value Delivery Network is composed of companies, suppliers, distributors, and ultimately, customers who partner together to improve the performance of the entire system.
• Distribution channels are sets of interdependent organizations that help make a product or service available for use or consumption.
• Each layer of marketing intermediaries, called a channel level, performs some work in bringing the product closer to the final buyer.

Channel Behavior and Organization

• Each channel member depends on the others for common good.
• Channel conflict arises from disagreements among members on goals, roles, and rewards.

Types of Channel Conflict

• Horizontal conflict occurs among firms at the same level of the channel.
• Vertical conflict occurs between different levels of the same channel.

Types of Channel Organization

• Vertical Marketing System (VMS) consists of producers, wholesalers, and retailers acting as a unified system.
• Conventional Marketing Channel consists of producers directly to wholesalers, directly to retailers, and to consumers.

Major Types of Vertical Marketing Systems

• Corporate VMS integrates successive stages of production and distribution under single ownership.
• Contractual VMS consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales impact.
  • Franchise Organization is a common type of contractual relationship.
    • Manufacturer-sponsored retailer franchise system
    • Manufacturer-sponsored wholesaler franchise system
    • Service-firm-sponsored retailer franchise system
• Administered VMS leadership is assumed by the size and power of one or a few dominant channel members.
• Horizontal Marketing Systems occur when two or more companies at one level join together to follow a new marketing opportunity.
• Multichannel Distribution Systems occur when a single firm sets up two or more marketing channels to reach one or more customer segments.

Channel Design Decisions

• Channel design decisions are influenced by the nature of the company, its products, marketing intermediaries, competitors, and the environment.

Number of Marketing Intermediaries

• Intensive distribution involves stocking the product in as many outlets as possible.
• Exclusive distribution gives a limited number of dealers the exclusive right to distribute the company's product.
• Selective distribution uses more than one, but fewer than all, of the intermediaries willing to carry the company's products.

Evaluating Major Alternatives

• Economic criteria
• Control criteria
• Adaptability criteria

Channel Management Decisions

• Channel management decisions include selecting, training, motivating, and evaluating channel members.

Marketing Logistics and Supply Chain Management

• Marketing logistics involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Gardenia Bread Case Study

• Daily Supply Mechanism ensures fresh bread for customers.
• Innovation in Product Display with upright packaging increases visibility and customer interest.
• Multi-Channel Distribution includes supermarkets, grocery stores, and smaller convenience stores.
• Direct Channels include house-to-house selling and institutional sales.
• Geographic Expansion and Market Segmentation uses a sequential market penetration approach to dominate different channels and regions.
• Logistics and Delivery focus on speed and efficiency, ensuring freshness across all channels.

Mr. Cruel's Career Success

• Three "I's" contribute to Mr. Cruel's success:
  • Interact with a wider team to solve complex problems and widen influence.
  • Inspire people within the organization by motivating key players and employees.
  • Innovate by challenging conventional business practices and inspiring change.

Challenger Brand Launch Strategy

• Know what is going against your business on deeper levels, both internal and external.
• Emphasize entrepreneurial intensity, organizational strength, and focus on the right set of problems.

Product Life Cycle

• Introduction: Invest in awareness and demand creation with the right communication and consumer insights.
• Growth: Improve the offer, fine-tune marketing strategies based on consumer feedback to penetrate the market.
• Maturity: Maintain market share with differentiation, cost optimizations, and ongoing product and marketing relevance.
• Decline: Consider product extensions, reduce to harvest, or divest.

This quiz covers key concepts in supply chain management, including the roles of upstream and downstream partners. It explores the value delivery network and the importance of distribution channels. Additionally, the quiz addresses channel conflict and organization among channel members.