Lecture M: Marketing (4/e) - Chapter 15: Supply chain and channel management

chapter

fifteen

supply chain and 
channel management

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LEARNING OBJECTIVES

LO 15-1 Understand the importance of
marketing channels and supply chain
management.
LO 15-2 Understand the difference between
direct and indirect marketing channels.
LO 15-3 Describe how marketing channels are
managed.
LO 15-4 Describe the flow of information and
merchandise in the marketing channel.
15­2


Supply Chain Management

15­3


Marketing Channels Add Value

©Brand X Pictures/PunchStock

FedEx commercial
with John Moschitta
15­4


Designing Marketing Channels

Direct Channel

Direct Channel
One Intermediary

Direct Channel
Two Intermediaries

Manufacturer

Manufacturer

Manufacturer

Wholesaler

Customer

Retailer

Retailer

Customer

Customer
15­5


Managing the Marketing Channel 
and Supply Chain

Horizontal Conflict

Manufacturer

Retailer 1

Retailer 2

Retailer 3

15­6


Managing the Marketing Channel 
and Supply Chain through Vertical 
Marketing Systems
Independent or conventional supply chain
Independent
marketing
channel

Vertical marketing
channel

15­7


Types of Vertical Marketing Systems

15­8


Power

15­9


Managing Marketing Channels and Supply 
Chains Through Strategic Relationships

15­10




check yourself

•

•

•

What are the differences between an
indirect and a direct marketing channel?
What are the differences among the three
types of vertical marketing systems?
How do firms develop strong strategic
partnerships with their marketing channel
partners?

15­11


Making Information Flow
through Marketing Channels

15­12


Data Warehouse

15­13


Photo by Cabela’s

Electronic Data Interchange

15­14

Vendor­Managed Inventory

DH Kong/Plush Studios/Getty Images

15­15


Pull and Push Supply Chain

15­16




check yourself

•

•

•
•

•

What are the marketing channel links associated
with each information flow?
How do marketing channel members use data

warehouses to make decisions?
What is EDI and how is it used?
Why do some marketing channels use VMI, while
others do not?
What is the difference between a push and pull
marketing channel?

15­17


Making Merchandise Flow 
Through Marketing Channels

15­18


The Distribution Center
Inbound Transportation
•

•

Dispatcher
coordinates
deliveries
Manufacturer may
pay transportation
expenses or retailers
may negotiate
directly with trucking

companies and pay
expenses

Steve Cole/Photodisc/Getty Images

15­19


The Distribution Center
Receiving and Checking

David Buffinton/Getty Images

Photo by Scott Olson/Getty Images

15­20


The Distribution Center
Storing and Cross­Docking

Walter Hodges/Digital Vision/Getty Images

15­21


The Distribution Center
Getting Merchandise Floor­Ready

Ticketing and marking

Increasingly firms are forcing
suppliers to ship floor ready
merchandise

15­22


The Distribution Center
Shipping Merchandise to Stores
•

•

Shipping
merchandise to
stores is complex for
multi-store chains
Distribution centers
use sophisticated
routing and
scheduling systems
Ryan McVay/Getty Images

15­23


Courtesy Tubular Steel, Inc.

The Distribution Center

Inventory Management 
Through Just­In­Time Systems

Just-in-time (JIT)

Quick response (QR)
Zappos Website
15­24




check yourself

•

•

How does merchandise flow through a
typical marketing channel?
Why have just-in-time supply chain
systems become so popular?

15­25