Marketing ChannelsDelivering Customer Value

Chris Beltran, Messaline Clement, Mireya Gama, Cody Prue

Agenda

Chapter 12 Key Ideas

Video

In-N- Out Comprehensive Model

Discussion Questions

The Value Delivery Network

Direct Marketing Channel vs. Conventional Marketing

Channel

Consumer

Retailer

Wholesaler

Producer

Consumer

Producer

Direct Conventional

Vertical Marketing System

In-N-Out: Corporate VMS

Ford: Contractual VMS

Walmart, Home Depot: Administered VMS

Horizontal Marketing SystemWalmart & McDonalds

Taco Bell & Pizza Hut

Multichannel Distribution

Channel Design Decision

Supply Chain Management• Managing upstream and downstream

value- added flows of materials, final goods, and final consumer

Supply Chain Management

Channel Management Decision

Selecting Channel Members

Managing and motivating channel members

Evaluating channel members

Public Policy and Distribution Decisions

Exclusive territorial agreements Producer or seller limit territory

Exclusive dealing Seller requires that the sellers not handle

competitor’s products

Exclusive distribution Seller allows only certain outlets to carry its

products

Tying agreements Dealer must take most or all of the line

Major Logistics Functions

Warehousing Inventory Management

Transportation

Logistics Information

Management

Marketing logistics: Planning, implementing, and

controlling the physical flow of goods and services from points of origin to points of consumption

Transportation Trucks- 40% Railroads- 40% Water carriers- Less than 5% Air carriers & Pipelines- Less

than 1%

Third Party Logistics3PL Supply Chain

Defined as a firm that provides service to its customers of outsourced (3rd Party) logistics as part of their supply chain management functions.

Typically specialized in warehousing and transportation that can be catered to customers needs.

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Tangible Good

Introduction Leading fast- food retail chain with over 200 locations in

California, Nevada, and Arizona

Private, family- run, non- franchised company Harry Snyder and his wife, Esther, opened what is

said to be California's first drive-thru restaurant.

Known for its made- to –order hamburgers, fresh ingredients and efficient service

Maintained the steady rate of expansion with traditional menu and a simple, customer- friendly philosophy

Distribution

Own distribution system Private butchers, warehouses, truck lines Must improve system to expand beyond west

coast and maintain strategic position

Comprehensive Model of the Marketing Distribution Channel

Supplier

In-N-Out

Consumer

Distributor

Discussion Questions

Do you believe In-N-Out Burger should remain non franchised or branch out like their competitors?

What are the complexities of using international distribution channels?

Referenceshttp://extensionengine.com/project-vs-product-

management/

http://www.referenceforbusiness.com/history/He-Ja/In-N-Out-Burgers-Inc.html#b

http://partners.visitrenotahoe.com/innoutburger