moves left to right
all along improvements are made
channel leadership, cooperation, and conflict
Leadership—channel 'captain' with 'power'. Such as WalMart. Or Procter and Gamble
Cooperation—everyone must work together.
Conflict—eliminating intermediaries or when channel members broaden their line.
Vertical Channel Integration:
When one channel member purchases another or assumes duties of another.
Vertical Marketing Systems:
All handled by one.
Administered and Contractural
PHYSICAL DISTRIBUTION IN SUPPLY-CHAIN MANAGEMENT
Outsourcing to third party. Perhaps CAT Logistics.
Order processing. Thru EDI.
Inventory Management. See reorder point.
Re-order=(lead time x usage rate) + safety stock.
example of reorder point
Re order point = (10 days x 10 per day) + 30 safety stock.
Re order point = 130 in stock.
just in time
Known as J I T approach. Parts arrive just in time for use.
Used by Chrysler, Dell Computer, Harley-Davidson.
And at Thanksgiving
Use of RFID. Radio frequency ids.
Public and private warehousing.
LEGAL CONCERNS IN TRANSPORTATION
-Dual distribution. Could break the law when used to put someone out of business.
-Restricted Sales Territories. Coors beer. Each court case is unique.
-Tying Agreements. Many are considered illegal.
-Exclusive Dealing. Depends on size of restriction.
-Refusal to Deal. Each case is unique
Retailer: purchase products for the purpose of selling them to the ultimate consumer.
Retailing: transactions in which the buyer intends to consume the product through personal, family, or household use.
general merchandise retailers
gmr, department stores, discount stores, convienience stores, supermarkets, superstores, hypermarkets, warehouse clubs, warehouse showrooms
-Traditional Specialty Retailers: Carry a narrow product mix with deep product lines. They are sometimes called "limited-line retailers
-Category Killers: A very large specialty store concentrating on a major product category and competing on the basis of low prices and product availability
-Off-Price Retailers: Buy manufacturers' seconds, overruns, returns and off-season production runs at below-wholesale prices for resale to consumers at deep discounts
arrangement in which a supplier, or franchiser, grants a dealer, or franchisee, the right to sell products in exchange for some type of consideration
Franchising enables a franchisee to start a business with limited capital and to benefit from the business experience of others
Are generally more successful than independently owned outlets
The franchiser gains fast product distribution through franchise arrangements
The franchiser can dictate many aspects of the business
The franchisee must pay to use the franchiser's name, products and assistance
The franchisee gives up control when entering into a franchise agreement
All transactions in which products are bought for resale, for making other products, or for general business operations
An individual or organization that sells products which are bought for resale, for making other products, or for general business operations
Independently owned businesses that take title to goods, assume risks associated with ownership and generally buy and resell products to other wholesalers, business customers, or retailers
full service wholesalers
Perform the widest possible range of wholesaling functions
Types of Full-Service Wholesalers
-General-Merchandise Wholesalers: Carry a wide product mix but offer limited depth within product lines
-Limited-Line Wholesalers: Carry few product lines but offer an extensive assortment of products within those lines
-Specialty-Line Wholesalers: Offer the narrowest range of products
-Rack Jobbers: Full-service, specialty-line wholesalers that own and maintain display racks in supermarkets, drugstores and discount and variety stores
limited service wholesalers
Provide fewer marketing services than full-service wholesalers and specialize in just a few functions, passing on the rest of the functions to customers or other intermediaries
-Cash-and-Carry Wholesalers: Intermediaries whose customers pay cash and furnish transportation
-Truck Wholesalers: Transport a limited line of products directly to customers for on-the-spot inspection and selection
-Drop Shippers: Take title to goods and negotiate sales but never take actual possession of products
-Mail-Order Wholesalers: Use catalogs instead of sales forces to sell products to retail and business customers
*brokers and agents
Brokers -Intermediaries temporarily employed by buyers or sellers in order to unite buyers and sellers
Agents -Represent either buyers or sellers on a permanent basis
Types of Agents
-Manufacturers' Agents: Independent intermediaries who represent sellers and usually offer customers complete product lines
-Selling Agents: Market either all of a specified product line or a manufacturer's entire output
-Commission Merchants: Receive goods on consignment from local sellers and negotiate sales in large, central markets
Manufacturer's Sales Branches and Offices
-Manufacturer-owned intermediaries that sell products and provide support to the manufacturer's sales force
-Manufacturer-owned operations that provide services normally associated with agents