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ChapterTwelve,MarketingChannels:DeliveringCustomerValue,MarketingChannels:DeliveringCustomerValue,SupplyChainsandtheValueDeliveryNetworkTheNatureandImportanceofMarketingChannelsChannelBehaviorandOrganizationChannelDesignDecisionsChannelManagementDecisionsPublicPolicyandDistributionDecisionsMarketingLogisticsandSupplyChainManagement,TopicOutline,SupplyChainsandtheValueDeliveryNetwork,Upstreampartnersincluderawmaterialsuppliers,components,parts,information,finances,andexpertisetocreateaproductorserviceDownstreampartnersincludethemarketingchannelsordistributionchannelsthatlooktowardthecustomer,SupplyChainPartners,SupplyChainsandtheValueDeliveryNetwork,Supplychain“makeandsell”viewincludesthefirmsrawmaterials,productiveinputs,andfactorycapacityDemandchain“senseandrespond”viewsuggeststhatplanningstartswiththeneedsofthetargetcustomer,andthefirmrespondstotheseneedsbyorganizingachainofresourcesandactivitieswiththegoalofcreatingcustomervalue,SupplyChainViews,SupplyChainsandtheValueDeliveryNetwork,Valuedeliverynetworkisthefirmssuppliers,distributors,andultimatelycustomerswhopartnerwitheachothertoimprovetheperformanceoftheentiresystem,ValueDeliveryNetwork,TheNatureandImportanceofMarketingChannels,Intermediariesofferproducersgreaterefficiencyinmakinggoodsavailabletotargetmarkets.Throughtheircontacts,experience,specialization,andscaleofoperations,intermediariesusuallyofferthefirmmorethanitcanachieveonitsown.,HowChannelMembersAddValue,TheNatureandImportanceofMarketingChannels,Fromaneconomicview,intermediariestransformtheassortmentofproductsintoassortmentswantedbyconsumersChannelmembersaddvaluebybridgingthemajortime,place,andpossessiongapsthatseparategoodsandservicesfromthosewhowouldusethem,HowChannelMembersAddValue,TheNatureandImportanceofMarketingChannels,HowChannelMembersAddValue,TheNatureandImportanceofMarketingChannels,HowChannelMembersAddValue,TheNatureandImportanceofMarketingChannels,NumberofChannelLevels,TheNatureandImportanceofMarketingChannels,Connectedbytypesofflows:PhysicalflowofproductsFlowofownershipPaymentflowInformationflowPromotionflow,NumberofChannelLevels,ChannelBehaviorandOrganization,MarketingchannelconsistsoffirmsthathavepartneredfortheircommongoodwitheachmemberplayingaspecializedroleChannelconflictreferstodisagreementovergoals,roles,andrewardsbychannelmembersHorizontalconflictVerticalconflict,ChannelBehavior,ChannelBehaviorandOrganization,Conventionaldistributionsystemsconsistofoneormoreindependentproducers,wholesalers,andretailers.Eachseekstomaximizeitsownprofits,andthereislittlecontrolovertheothermembersandnoformalmeansforassigningrolesandresolvingconflict.,ConventionalDistributionsSystems,ChannelBehaviorandOrganization,Verticalmarketingsystems(VMSs)providechannelleadershipandconsistofproducers,wholesalers,andretailersactingasaunifiedsystemandconsistof:CorporatemarketingsystemsContractualmarketingsystemsAdministeredmarketingsystems,VerticalMarketingSystems,ChannelBehaviorandOrganization,Corporateverticalmarketingsystemintegratessuccessivestagesofproductionanddistributionundersingleownership,VerticalMarketingSystems,ChannelBehaviorandOrganization,Contractualverticalmarketingsystemconsistsofindependentfirmsatdifferentlevelsofproductionanddistributionwhojointogetherthroughcontractstoobtainmoreeconomiesorsalesimpactthaneachcouldachievealone.Themostcommonformisthefranchiseorganization.,VerticalMarketingSystems,ChannelBehaviorandOrganization,FranchiseorganizationlinksseveralstagesintheproductiondistributionprocessManufacturer-sponsoredretailerfranchisesystemManufacturer-sponsoredwholesalerfranchisesystemServicefirm-sponsoredretailerfranchisesystem,VerticalMarketingSystems,ChannelBehaviorandOrganization,Administeredverticalmarketingsystemhasafewdominantchannelmemberswithoutcommonownership.Leadershipcomesfromsizeandpower.,VerticalMarketingSystems,ChannelBehaviorandOrganization,Horizontalmarketingsystemsarewhentwoormorecompaniesatoneleveljointogethertofollowanewmarketingopportunity.Companiescombinefinancial,production,ormarketingresourcestoaccomplishmorethananyonecompanycouldalone.,HorizontalMarketingSystem,ChannelBehaviorandOrganization,MultichannelDistributionsystems(Hybridmarketingchannels)arewhenasinglefirmsetsuptwoormoremarketingchannelstoreachoneormorecustomersegments,MultichannelDistributionSystemsHybridMarketingChannels,ChannelBehaviorandOrganization,MultichannelDistributionSystem,ChannelBehaviorandOrganization,Disintermediationoccurswhenproductorserviceproducerscutoutintermediariesandgodirectlytofinalbuyers,orwhenradicallynewtypesofchannelintermediariesdisplacetraditionalones,ChangingChannelOrganization,ChannelDesignDecisions,ChannelDesignDecisions,TargetedlevelsofcustomerserviceWhatsegmentstoserveBestchannelstouseMinimizingthecostofmeetingcustomerservicerequirements,SettingChannelObjectives,ChannelDesignDecisions,TypesofintermediariesNumberofmarketingintermediariesResponsibilitiesofchannelmembers,IdentifyingMajorAlternatives,ChannelDesignDecisions,IdentifyingMajorAlternatives,ChannelDesignDecisions,Eachalternativeshouldbeevaluatedagainst:EconomiccriteriaControlAdaptivecriteria,EvaluatingtheMajorAlternatives,ChannelDesignDecisions,ChannelsystemscanvaryfromcountrytocountryMustbeabletoadaptchannelstrategiestotheexistingstructureswithineachcountry,DesigningInternationalDistributionChannels,ChannelManagementDecisions,PublicPolicyandDistributionDecisions,ExclusivedistributioniswhenthesellerallowsonlycertainoutletstocarryitsproductsExclusivedealingiswhenthesellerrequiresthatthesellersnothandlecompetitorsproductsExclusiveterritorialagreementsarewhereproducerorsellerlimitterritoryTyingagreementsareagreementswherethedealermusttakemostoralloftheline,MarketingLogisticsandSupplyChainManagement,Marketinglogistics(physicaldistribution)involvesplanning,implementing,andcontrollingthephysicalflowofgoods,services,andrelatedinformationfrompointsoforigintopointsofconsumptiontomeetconsumerrequirementsataprofit,NatureandImportanceofMarketingLogistics,MarketingLogisticsandSupplyChainManagement,NatureandImportanceofMarketingLogistics,MarketingLogisticsandSupplyChainManagement,Supplychainmanagementistheprocessofmanagingupstreamanddownstreamvalue-addedflowsofmaterials,finalgoods,andrelatedinformationamongsuppliers,thecompany,resellers,andfinalconsumers,NatureandImportanceofMarketingLogistics,MarketingLogisticsandSupplyChainManagement,MajorLogisticsFunctions,MarketingLogisticsandSupplyChainManagement,HowmanyWhattypesLocationDistributioncenters,WarehousingDecisions,MarketingLogisticsandSupplyChainManagement,Just-in-timesystemsRFIDKnowingexactproductlocationSmartshelvesPlacingordersautomatically,InventoryManagement,MarketingLogisticsandSupplyChainManagement,MajorLogisticsFunctions,Transportationaffectsthepricingofproducts,deliveryperformance,andconditionofthegoodswhentheyarrive,MarketingLogisticsandSupplyChainManagement,Logisticsinformationmanagementisthemanagementoftheflowofinformation,includingcustomerorders,billing,inventorylevels,andcustomerdataEDI(electroni
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