MARK Chapter 15 Notes
MARK Chapter 15 Notes MARK 3001
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This 7 page Class Notes was uploaded by Kyla Brinkley on Sunday October 4, 2015. The Class Notes belongs to MARK 3001 at University of Georgia taught by Kimberly Grantham in Summer 2015. Since its upload, it has received 66 views. For similar materials see Principles of Marketing in Marketing at University of Georgia.
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Date Created: 10/04/15
Kyla Brinkley MARK 3001 Notes Fall 2015 l Chapter 15 Supply Chain and Channel Management a Marketing channel management AKA supply chain management Refers to a set of approaches amp techniques firms employ to efficiently amp effectively integrate their suppliers b The Importance of Marketing ChannelSupply Chain Management i Unless firms can secure the placement of products in appropriate outlets in sufficient quantities exactly when customers want them they re likely to fail ii Wholesalers those firms engaged in buying taking title to often storing amp physically handling goods in large quantities then reselling the goods usually in smaller quantities to retailers or industrial or business users iii Marketing Channels Add Value 1 Each participant in the channel adds value iv Marketing Channel Management Affects Other Aspects of Marketing 1 Distribution center a facility for the receipt storage and redistribution of goods to company stores or customers may be operated by retailers manufacturers or distribution specialists 2 Advertisingpromotion must be coordinated with depts that control inventorytransportation c Designing Marketing Channels i When firm starts out can t choose who it buys from or seHsto ii Direct Marketing Channel the manufacturer sells directly to the buyer 1 Seller can be an individual 2 Common goals sustain relationship iii Indirect marketing channel when one or more intermediaries work with manufacturers to provide goods amp services to customers 1 Can have 1 or multiple intermediaries 2 Wholesalers more common when company doesn t buy in sufficient quantities to make it cost effective for manufacturer to deal directly with them and in less developed economies d Making Information Flow Through Marketing Channels vi vii Flow 1 Customer to Store 1 Universal product code UPC the black amp white bar code found on most merchandise 2 Has 13 digit code that shows manufacturer description packaging info promotions Flow 2 Store to Buyer 1 Point of sale terminal records purchase info amp sends it to buyer electronically Flow 3 Buyer to Manufacturer 1 Purchase info is aggregated by retailer as a whole creating order for new merchandise Flow 4 Store to Manufacturer 1 In some situations sales transaction data are sent directly from the store to the manufacturer and they decide when to ship more merchandise to distribution centersstores 2 Other situations ordering process done automatically bypassing buyers Flow 5 Store to Distribution Center 1 Store communicate with distribution center to coordinate deliveries amp check inventory status 2 When store inventory drops to certain level more products are shipped to the store Flow 6 Manufacturer to Distribution Center amp Buyer 1 When manufacturer ships products to distribution center it sends advanced shipping notice an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment Data Warehouse 1 Purchase data collected at the point of sale goes into a huge database data warehouse 2 CEO uses it to look at how company is doing in general 3 Electronic data interchange EDI the computer to computer exchange of business documents from a retailer to a vendor and back a Let s vendors transmit info about i Inventory status ii Vendor promotions iii Cost changes iv Purchase order info v Order status info vi Retail price info vii Transportation routings b Also facilitates communication 4 Vendormanaged inventory VMI an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer s inventory levels in each of its stores a Better match retail demand to supply b Reduce vendorretailor costs i Don t have to place orders anymoremonitor viii Push vs Pull Marketing Channels 1 Push marketing strategy designed to increase demand by motivating sellers wholesalers distributors or salespeople to highlight the product rather than the products of competitors amp thereby push the product onto consumers a Specified quantities shipped pushed to distribution centers at predetermined times b Manufacturer works with wholesalersretailers to get products on shelf by providing incen ves 2 Pull marketing strategy designed to get consumers to pull the product into the supply chain by demanding it a Amount of merchandise sent to store is determined based on sales date captured by POS terminals Marketing campaigns to attract customers Less likely to be overstocked or out of stocked Increases inventory turnover More responsive to changes in customer demand More costly 919 g Some retailers don t have flexibility h Inefficient if merch doesn t have steady predictable demand e Making Merchandise Flow Through Marketing Channels i Deciding where merch will go ii Distribution Centers vs Direct Store Delivery 1 Ultimate decision usually up to the retailer 2 Depends on what type of merch 3 Advantages to using distribution center a More accurate sales forecasts are possible b Enable retailer to carry les merchandise in individual stores c Easier to avoid running out of stock or overstocking d Retail store space is more expensive than distribution center amp distribution centers can prepare products for sale better 4 Distribution centers aren t necessary if retailer only has a few outlets and if outlets are in metropolitan areas 5 Direct store delivery also better for perishable goods like food or for items that manufacturer wants to be the first to sell fads iii The Distribution Center 1 Management of Inbound Transportation a Buyersplanners involved in coordinating physical flow of merch to stores b Planners employees responsible for the financial planning amp analysis of merch amp its allocation to stores Truck must arrive at certain time Some retailers believe they can lower net merch cost amp better control merch flow if they negotiate directly with delivery companies 2 Receiving amp Checking Using UPC a Receiving the process of recording the receipt of merch as it arrives at a distribution center or store 29 b Checking is the process of going through goods upon receipt to make sure they arrived undamaged and are the right things c Use of EDI ASN UPC RFID facilitate process d Radio frequency identification RFID tags tiny computer chips that automatically transmit to a special scanner all the info about a container s contents or individual products i More info than UPC code ii Tracking device 3 Stores amp CrossDocking a After merch is received amp checked it is either stored or cross docked b Cross docked merch ready for sale is placed on conveyor system that routes it from unloading dock where it was received to loading dock for truck going to store 4 Getting Merchandise FloorReady a Floor ready merchandise is ready to go on sales floor b Ticketing marking placing garments on hangers c Some items ship ready to sell d Ticketing amp marking creating price and identification labels amp placing them on the merchandise i More efficient to do this at distribution centers instead of stores ii Expensive time consuming 5 Preparing to Ship Merchandise to a Store a At start of day computer system generates list of items to be shipped to each store that day b Pick ticket a document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas 6 Shipping Merchandise to Stores a Complex b Distribution centers run 50100 outbound truck routes in 1 day c Sophisticated routingscheduling computer systems iv Inventory Management through JustinTime Inventory Systems 1 2 3 FOR REVIEW Marketing channel management solves distribution problems faced by firms Mistakes lengthened time to get merch to customersmade process more expensive Justintime JIT inventory systems inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems the firm gets the merchandise just in time for it to be used in the manufacture of another product in the case of parts or components or for sale when the customer wants it in the case of consumer goods also known as quick response QR systems in retailing a Developed by Toyota in 1950s and popular with stores like Zara amp Forever 21 b Reduced lead time amount of time between recognizing order needs to be placed ad arrival or merch at the store Increased product availability Lower inventory investment 19 Direct channel manufacturergtcustomer Direct channel 1 intermediary manufacturergtretailergtconsumer Direct channel 2 intermediaries manufacturergtwholesalerretaiIergtcustomer Push marketing manufacturergtwholesalergtconsumer Pull marketing consumergtwholesalerretaiIergtmanufacturer The Distribution Center 1 Coordinating inbound transportation 2 Receiving checking storing crossdocking 3 Getting merch floorready 4 Coordinating outbound transportation