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Slide 13-2 MANAGING MARKETING CHANNELS AND SUPPLY CHAINS Lecture 10_Place

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Slide 13-5LECTURE QUESTIONS:What is marketing channel of distribution and why intermediaries are needed.Differences between marketing channels for consumer and business products and services, and between different types of vertical marketing systems.

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Слайд 1Slide 13-2
MANAGING MARKETING CHANNELS AND SUPPLY CHAINS
Lecture 10_Place (Channels of

distribution)
Associate professor of Plekhanov REA marketing department
Irina I.Skorobogatykh (Ph.D)

Slide 13-2MANAGING MARKETING CHANNELS AND SUPPLY CHAINSLecture 10_Place (Channels of distribution)Associate professor of Plekhanov REA marketing departmentIrina

Слайд 2Slide 13-5
LECTURE QUESTIONS:
What is marketing channel of distribution and why

intermediaries are needed.

Differences between marketing channels for consumer and business

products and services, and between different types of vertical marketing systems.
Slide 13-5LECTURE QUESTIONS:What is marketing channel of distribution and why intermediaries are needed.Differences between marketing channels for

Слайд 3Slide 13-6
LECTURE QUESTIONS
Factors considered by marketing executives when selecting and

managing a marketing channel.

Explain what supply chain and logistics management

are and how they relate to marketing strategy.
Slide 13-6LECTURE QUESTIONSFactors considered by marketing executives when selecting and managing a marketing channel.Explain what supply chain

Слайд 4Slide 13-7
LECTURE QUESTIONS
Explain how managers trade off different “logistics costs”

relative to customer service in order to make a supply

chain decision.
Slide 13-7LECTURE QUESTIONSExplain how managers trade off different “logistics costs” relative to customer service in order to

Слайд 5NATURE AND IMPORTANCE OF MARKETING CHANNELS
Slide 13-9
Marketing Channel
What Is

a Marketing Channel of Distribution?

NATURE AND IMPORTANCE OF MARKETING CHANNELSSlide 13-9 Marketing ChannelWhat Is a Marketing Channel of Distribution?

Слайд 6Slide 13-71
A marketing channel consists of individuals and firms involved in

the process of making a product or service available.
Marketing Channel

Slide 13-71A marketing channel consists of individuals and firms involved in the process of making a product

Слайд 7Slide 13-10
Terms used for marketing intermediaries

Slide 13-10Terms used for marketing intermediaries

Слайд 8NATURE AND IMPORTANCE OF MARKETING CHANNELS
Slide 13-11
Value Created by Intermediaries

Functions Performed by Intermediaries
Consumer Benefits from Intermediaries

NATURE AND IMPORTANCE OF MARKETING CHANNELSSlide 13-11Value Created by Intermediaries Functions Performed by Intermediaries Consumer Benefits from

Слайд 9Slide 13-12
Marketing channel functions performed by intermediaries

Slide 13-12 Marketing channel functions performed by intermediaries

Слайд 10Slide 13-13

1. What is meant by a marketing channel?
A:

A marketing channel consists of individuals and firms involved in

the process of making a product or service available.

Concept Check

Slide 13-13			 1. What is meant by a marketing channel?A: A marketing channel consists of individuals and

Слайд 11Slide 13-14

2. What are the three basic functions performed

by intermediaries?
A: Intermediaries perform transactional, logistical, and facilitating functions.
Concept Check

Slide 13-14			 2. What are the three basic functions performed by intermediaries?A: Intermediaries perform transactional, logistical, and

Слайд 12CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-15
Direct Channel
Marketing Channels for Consumer Goods

and Services
Indirect Channel

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-15 Direct ChannelMarketing Channels for Consumer Goods and Services Indirect Channel

Слайд 13Slide 13-16
Structure of marketing channels

Slide 13-16 Structure of marketing channels

Слайд 14Slide 13-17
Common marketing channels for consumer goods and services

Slide 13-17 Common marketing channels for consumer goods and services

Слайд 15CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-18
Industrial Distributor
Marketing Channels for Business Goods

and Services
Agent

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-18 Industrial DistributorMarketing Channels for Business Goods and Services Agent

Слайд 16Slide 13-19
Common marketing channels for business goods and services

Slide 13-19Common marketing channels for business goods and services

Слайд 17CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-20
Electronic Marketing Channels
Dual Distribution
Strategic Channel

Alliances
Multiple Channels and Strategic Alliances

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-20Electronic Marketing Channels Dual Distribution Strategic Channel AlliancesMultiple Channels and Strategic Alliances

Слайд 18Slide 13-72
Dual distribution is an arrangement whereby a firm reaches

different buyers by employing two or more different types of

channels for the same basic product.

Dual Distribution

Slide 13-72Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more

Слайд 19Slide 13-21
Representative electronic marketing channels

Slide 13-21 Representative electronic marketing channels

Слайд 20CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-23
Vertical Marketing Systems
Corporate Systems
Corporate Vertical

Marketing System
Forward Integration
Backward Integration

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-23Vertical Marketing Systems Corporate Systems Corporate Vertical Marketing System Forward Integration Backward Integration

Слайд 21Slide 13-73
Vertical marketing systems are professionally managed and centrally coordinated marketing

channels designed to achieve channel economies and maximum marketing impact.
Vertical Marketing

Systems
Slide 13-73Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies

Слайд 22Slide 13-24
Types of vertical marketing systems

Slide 13-24  Types of vertical marketing systems

Слайд 23CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-26
Vertical Marketing Systems
Contractual Systems
Contractual Vertical

Marketing System
Wholesaler-Sponsored Voluntary Chains
Retailer-Sponsored Cooperatives

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-26Vertical Marketing Systems Contractual Systems Contractual Vertical Marketing System Wholesaler-Sponsored Voluntary Chains Retailer-Sponsored

Слайд 24CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-28
Vertical Marketing Systems
Contractual Systems: Franchising
Manufacturer-Sponsored Retail Franchise

Systems
Service-Sponsored Retail Franchise Systems
Service-Sponsored Franchise Systems
Manufacturer-Sponsored Wholesale Franchise Systems

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-28Vertical Marketing Systems Contractual Systems: FranchisingManufacturer-Sponsored Retail Franchise Systems Service-Sponsored Retail Franchise Systems

Слайд 25Slide 13-74
Franchising is a contractual arrangement between a parent company

(a franchiser) and an individual or firm (a franchisee) that allows

the franchise to operate a certain type of business under an established name and according to specific rules.

Franchising

Slide 13-74Franchising is a contractual arrangement between a parent company (a franchiser) and an individual or firm

Слайд 26CHANNEL STRUCTURE AND ORGANIZATION
Slide 13-29
Vertical Marketing Systems
Administered Systems
Administered Vertical Marketing

Systems

CHANNEL STRUCTURE AND ORGANIZATIONSlide 13-29Vertical Marketing Systems Administered SystemsAdministered Vertical Marketing Systems

Слайд 27Slide 13-30

1. What is the difference between a direct

and indirect channel?
A: A direct channel is one in which

a producer of consumer or business goods and services and ultimate consumers or industrial users deal directly with each other whereas an indirect channel has intermediaries that are inserted between the producer and consumers or industrial users and who perform numerous channel functions.

Concept Check

Slide 13-30			 1. What is the difference between a direct and indirect channel?A: A direct channel is

Слайд 28Slide 13-31

2. What is the major distinction between a

corporate vertical marketing system and an administered vertical marketing system?
A:

A corporate vertical marketing system combines the successive stages of production and distribution under a single ownership, whereas a administered vertical marketing system achieves the same thing by the size and influence of one channel member rather than through ownership.

Concept Check

Slide 13-31			 2. What is the major distinction between a corporate vertical marketing system and an administered

Слайд 29CHANNEL CHOICE AND MANAGEMENT
Slide 13-32
Factors in Choosing a Marketing Channel
Target Market

Coverage
Intensive Distribution
Exclusive Distribution
Selective Distribution

CHANNEL CHOICE AND MANAGEMENTSlide 13-32Factors in Choosing a Marketing Channel Target Market CoverageIntensive DistributionExclusive DistributionSelective Distribution

Слайд 30Slide 13-75
Intensive distribution means that a firm tries to place its

products and services in as many outlets as possible.
Intensive Distribution

Slide 13-75Intensive distribution means that a firm tries to place its products and services in as many

Слайд 31Slide 13-76
Exclusive distribution is the extreme opposite of intensive distribution

because only one retail outlet in a specified geographical area

carries the firm’s products.

Exclusive Distribution

Slide 13-76Exclusive distribution is the extreme opposite of intensive distribution because only one retail outlet in a

Слайд 32Slide 13-77
Selective distribution lies between the two extremes of intensive and

exclusive distribution and means that a firm selects a few retail

outlets in a specified geographical area to carry its products.

Selective Distribution

Slide 13-77Selective distribution lies between the two extremes of intensive and exclusive distribution and means that a

Слайд 33CHANNEL CHOICE AND MANAGEMENT
Slide 13-33
Factors in Choosing a Marketing Channel
Satisfying Buyer

Requirements
Profitability

CHANNEL CHOICE AND MANAGEMENTSlide 13-33Factors in Choosing a Marketing Channel Satisfying Buyer Requirements Profitability

Слайд 34CHANNEL CHOICE AND MANAGEMENT
Slide 13-37
Channel Relationships: Conflict and Cooperation
Conflict in Marketing

Channels
Channel Conflict
Vertical Conflict
Disintermediation
Horizontal Conflict

CHANNEL CHOICE AND MANAGEMENTSlide 13-37Channel Relationships: Conflict and Cooperation Conflict in Marketing ChannelsChannel ConflictVertical ConflictDisintermediationHorizontal Conflict

Слайд 35Slide 13-78
Channel conflict arises when one channel member believes another

channel member is engaged in behavior that prevents it from

achieving its goals.

Channel Conflict

Slide 13-78Channel conflict arises when one channel member believes another channel member is engaged in behavior that

Слайд 36Slide 13-79
Disintermediation is a form of vertical channel conflict that arises

when a channel member bypasses another member and sells or

buys products direct from a channel member in a different level in the marketing channel.

Disintermediation

Slide 13-79Disintermediation is a form of vertical channel conflict that arises when a channel member bypasses another

Слайд 37CHANNEL CHOICE AND MANAGEMENT
Slide 13-38
Channel Relationships: Conflict and Cooperation
Cooperation in Marketing

Channels
Channel Captain

CHANNEL CHOICE AND MANAGEMENTSlide 13-38Channel Relationships: Conflict and Cooperation Cooperation in Marketing ChannelsChannel Captain

Слайд 38Slide 13-39

1. What are the three degrees of distribution

intensity?
A: intensive, exclusive, and selective.
Concept Check

Slide 13-39			 1. What are the three degrees of distribution intensity?A: intensive, exclusive, and selective.Concept Check

Слайд 39Slide 13-40

2. What are the three questions marketing executives

consider when choosing a marketing channel and intermediaries?
A: Which channel

and intermediaries will: (1) provide the best coverage of the target market? (2) best satisfy the buying requirements of the target market? and (3) be the most profitable?

Concept Check

Slide 13-40			 2. What are the three questions marketing executives consider when choosing a marketing channel and

Слайд 40LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Slide 13-41
Logistics
Logistics Management
Flow
Cost Effective
Customer Requirements

LOGISTICS AND SUPPLY CHAIN MANAGEMENTSlide 13-41Logistics Logistics ManagementFlowCost EffectiveCustomer Requirements

Слайд 41Slide 13-80
Logistics involves those activities that focus on getting the right

amount of the right products to the right place at

the right time at the lowest possible cost.

Logistics

Slide 13-80Logistics involves those activities that focus on getting the right amount of the right products to

Слайд 42Slide 13-42
Definition of logistics

Slide 13-42Definition of logistics

Слайд 43LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Slide 13-44
Supply Chain
Supply Chains vs. Marketing

Channels
Supply Chain Management
Sourcing, Assembling, and Delivering a New Car:

The Automotive Supply Chain
LOGISTICS AND SUPPLY CHAIN MANAGEMENTSlide 13-44 Supply ChainSupply Chains vs. Marketing Channels Supply Chain ManagementSourcing, Assembling, and

Слайд 44Slide 13-81
A supply chain is a series of firms that

perform activities required to create and deliver a good or

service to consumers or industrial users.

Supply Chain

Slide 13-81A supply chain is a series of firms that perform activities required to create and deliver

Слайд 45Slide 13-45
Definition of a supply chain

Slide 13-45 Definition of a supply chain

Слайд 46Slide 13-46
Relating marketing channels, logistics management, and supply chain

management

Slide 13-46 Relating marketing channels, logistics management, and supply chain management

Слайд 47Slide 13-47
The automotive supply chain

Slide 13-47 The automotive supply chain

Слайд 48LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Slide 13-48
Aligning a Supply Chain with Marketing Strategy
Supply

Chain Management and Marketing Strategy
Understand the Customer
Understand the Supply Chain
Harmonize

the Supply Chain with the Marketing Strategy
LOGISTICS AND SUPPLY CHAIN MANAGEMENTSlide 13-48Aligning a Supply Chain with Marketing StrategySupply Chain Management and Marketing StrategyUnderstand

Слайд 49LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Slide 13-49
Supply Chain Management and Marketing Strategy
Dell

Computer: A Responsive Supply Chain
Cross-Docking
Wal-Mart: An Efficient Supply Chain

LOGISTICS AND SUPPLY CHAIN MANAGEMENTSlide 13-49Supply Chain Management and Marketing StrategyDell Computer: A Responsive Supply ChainCross-DockingWal-Mart: An

Слайд 50Slide 13-50

1. What is the principal difference between a

marketing channel and a supply chain?
A: A supply chain also

includes suppliers who provide raw materials to a manufacturer as well as the wholesalers and retailers—the marketing channel—who deliver the finished goods to ultimate consumers.

Concept Check

Slide 13-50			 1. What is the principal difference between a marketing channel and a supply chain?A: A

Слайд 51Slide 13-51

2. The choice of a supply chain involves

what three steps?
A: (1) Understand the customer. (2) Understand the

supply chain. (3) Harmonize the supply chain with the marketing strategy.

Concept Check

Slide 13-51			 2. The choice of a supply chain involves what three steps?A: (1) Understand the customer.

Слайд 52TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAIN
Slide 13-52
Total

Logistics Cost Concept
Time
Customer Service Concept
Dependability
Order Cycle or Replenishment
Quick

or Efficient Consumer Response

Communication

Convenience

Vendor-Managed Inventory (VMI)

TWO CONCEPTS OF LOGISTICS MANAGEMENT IN A SUPPLY CHAINSlide 13-52Total Logistics Cost Concept TimeCustomer Service Concept DependabilityOrder

Слайд 53Slide 13-84
Vendor-managed inventory (VMI) is a customer service factor whereby the supplier

determines the product amount and assortment a customer (such as a retailer)

needs and automatically delivers the appropriate items.

Vendor-Managed Inventory (VMI)

Slide 13-84Vendor-managed inventory (VMI) is a customer service factor whereby the supplier determines the product amount and

Слайд 54Slide 13-53
Supply chain managers balance total logistics cost factors against

customer service factors

Slide 13-53Supply chain managers balance total logistics cost factors against customer service factors

Слайд 55Slide 13-54

1. What is the logistics management objective in

a supply chain?
A: To minimize total logistics costs while delivering

the appropriate level of customer service.

Concept Check

Slide 13-54			 1. What is the logistics management objective in a supply chain?A: To minimize total logistics

Слайд 56Slide 13-55

2. A manager’s key task is to balance

which four customer service factors against which five logistics cost

factors?

A: Customer service factors: time, dependability, communication, and convenience. Logistics cost factors: transportation costs, materials handling and warehousing costs, order processing costs, stockout costs, and inventory costs.

Concept Check

Slide 13-55			 2. A manager’s key task is to balance which four customer service factors against which

Слайд 57Slide 13-82
Total logistics cost includes expenses associated with transportation, materials

handling and warehousing, inventory, stockouts (being out of inventory) order

processing, and return goods handling.

Total Logistics Cost

Slide 13-82Total logistics cost includes expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out

Слайд 58Slide 13-83
Customer service is the ability of logistics management to

satisfy users in terms of time, dependability, communication, and convenience.
Customer

Service
Slide 13-83Customer service is the ability of logistics management to satisfy users in terms of time, dependability,

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