
2/29

Learning Objectives

1. Explain what a marketing channel is and

why intermediaries are needed.

2. Define the types of channel intermediariesand describe their functions and activities.


3/29

Learning Objective1

Explain what a marketing channel

is and why intermediaries are needed.


4/29

Marketing Channels1

MarketingChannel

SupplyChain

A set of interdependent organizationsthat ease the transfer of ownership as

products move from producer to

business user or consumer.

The connected chain of all the business

entities, both internal and external to thecompany, that perform or support thelogistics function.


5/29

Marketing Channel Functions

Specialization andDivision of Labor

Channels

FulfillThree

ImportantFunctions

OvercomingDiscrepancies

Providing ContactEfficiency

1


6/29


7/29

Marketing Channel Functions

Channels

FulfillThree

ImportantFunctions

Providing ContactEfficiency

1


8/29

Marketing Channel Functions1


9/29

Specialization and

Division of Labor1

Provides economies of scale

Aids producers who lack resources tomarket directly

Builds good relationships withcustomers


10/29

1


11/29

Overcoming Discrepancies

Discrepancyof

Quantity

Discrepancyof

Assortment

The difference between the amountof product produced and the

amount an end user wants to buy.

The lack of all the items required togive full satisfaction from a product

or products to the customer.

1


12/29

Overcoming Discrepancies

TemporalDiscrepancy

SpatialDiscrepancy

A situation that occurs when aproduct is produced but a

customer is not ready to buy it.

The difference between thelocation of a producer and the

location of widely

scattered markets.

1


13/29

Learning Objective2

Define the types of channel

intermediaries and describe theirfunctions and activities.


14/29

Channel Intermediaries

Retailer

MerchantWholesaler

Agents andBrokers

A channel intermediary thatsells mainly to customers.

An institution that buys goodsfrom manufacturers, takes title

to goods, stores them,and resells and ships them.

Wholesaling intermediaries whofacilitate the sale of a product byrepresenting channel member.

2


15/29

Channel Intermediaries

Retailers

MerchantWholesalers

Agentsand

Brokers

Take Title to Goods

Take Title to Goods

Do NOT Take Title to Goods

2


16/29

2002 South-Western

Channel for Consumer Products

Chapter 12 Version 6e 16


17/29

2002 South-Western

Channel for Business Products



18/29

2002 South-WesternChapter 12 Version 6e 18


19/29

Channel Functions

Performed by Intermediaries

Contacting/Promotion

Negotiating

Risk Taking

FacilitatingFunction

TransactionalFunctions

LogisticalFunctions

Researching

Financing

Physically distributing

Storing

Sorting

2


20/29

Logistics

The process of strategically

managing the efficient flow

and storage of rawmaterials, in-process

inventory, and finished

goods from point of origin

to point of consumption.


21/29

2002 South-Western

Responsibility of Supply Chain Manager



22/29

2002 South-Western

Supply Chain Process



23/29

2002 South-Western

Factors Affecting

Transportation Decisions

Carrier (party that moves or transports theproduct)

Vehicle-related cost

Fixed operating cost

Trip-related cost

Shipper (party that requires the movement

of the product between two points in the

supply chain) Transportation cost

Inventory cost

Facility cost


24/29

2002 South-Western

Transportation Modes Trucks

Rail

Air

Package Carriers

Water

Pipeline


25/29

2002 South-Western

Air Key issues:

Location/number of hubs

Location of fleet bases/crew bases

Schedule optimization

Fleet assignment

Crew scheduling

Productivity


26/29

2002 South-Western

Package Carriers

Companies like FedEx, UPS, that carry small

packages ranging from letters to shipments of

about 150 pounds

Expensive

Rapid and reliable delivery

Small and time-sensitive shipments

Preferred mode for corporate businesses


27/29

2002 South-Western

Water

Limited to certain geographic areas

Ocean, inland waterway system,

coastal waters Very large loads at very low cost

Slowest

Dominant in global trade (autos,grain, apparel, etc.)


28/29

2002 South-Western

Pipeline

High fixed cost

Primarily for crude petroleum,

refined petroleum products, naturalgas

Best for large and predictable

demand

Would be used for getting crude oil

to a port or refinery


29/29

2002 South-Western

Intermodal

Use of more than one mode of transportationto move a shipment to its destination

Most common example: rail/truck

Also water/rail/truck or water/truck Grown considerably with increased use ofcontainers

Increased global trade has also increased use

of intermodal transportation Key issue involves the exchange of

information to facilitate transfer betweendifferent transport modes

marketing channel in scm

Documents