BSB126 Chapter Notes - Chapter 12: Car Rental, Multichannel Marketing, Franchising
Chapter 12: Supply Chain, Channel Management, and Retail
- Marketing/Supply channel management – a set of approaches and techniques firms employ
to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores,
and transport intermediaries into a seamless operation in which merchandise is produced
and distributed in the right quantities to the right locations at the right time
- Wholesalers – firms that buy products from manufacturers and resell them to retailers (who
sell them directly to consumers)
- Channel members ass value, are more efficient, and cut down on expenses
- Coordinate delivery efforts with advertising, promotions, production etc.
- Distribution centre – facility for the receipt, storage, and redistribution of goods to company
stores or customers
oMay be operated by retailers, manufacturers, or specialists
- Direct marketing channel
oNo intermediaries between the buyer and seller
oSeller is manufacturer/individual
oBuyer is individual/business
- Indirect marketing channel
oOne/more intermediaries work with manufacturers to provide goods/services to
customers
oManufacturer to retailer to customer OR
oManufacturer to wholesaler to retailer to customer
- Interactions between members occur when they want something from each other
- Members can be replaced if another feels they aren’t performing adequately
- Conflicting goods can result in conflict – common goals sustain relationship
- Vertical channel conflict
oSupply chain members are not in agreement about their goals, roles, or rewards
- Horizontal channel conflict
oWhen there is discord among members at the same level or marketing channel
- Independent/conventional marketing channel
oIndependent members attempt to satisfy individual objectives and maximise profit
at the expense of other members
- Vertical marketing system
oMembers act as a unified system
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oAdministered vertical marketing system
No common ownership or contractual relationship but the dominant
member controls/holds the balance of power
Power exists when one firm has the means/ability to dictate the actions of
another member at a different level of distribution
Reward power – offer incentives
Coercive power – threats or punishments
Referent power – reputation is well known
Expertise power – rely on expertise
Information power – providing/withholding important information
Legitimate power – securing obedience through contractual
agreement
Either party can walk away if unhappy
oContractual vertical marketing system
Independent firms at different levels of the marketing channel join together
through contracts to obtain economies of scale and coordination and reduce
conflict
Franchising – a contractual agreement that allows the franchisee to operate
a retail outlet using a name and format developed and supported by the
franchisor
Franchisee pays a lump sum and royalties on all sales in return for
the right to operate a business in a specific location
Franchisor provides assistance in locating and building the business,
developing goods/services, management training, and advertising
oCorporate vertical marketing system
Parent company has complete control and can dictate priorities and
objectives of the channel because it owns multiple segments
- Relationships
oOne-time relationship – companies don’t care how the other party feels after
transaction
oStrategic/partnering relationship
Members are committed to maintaining relationship over long-term and
investing in opportunities that are mutually beneficial
Created to uncover and explore joint opportunities and facilitate trust
Trust = less suspicion = less conflict
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 12: supply chain, channel management, and retail. Wholesalers firms that buy products from manufacturers and resell them to retailers (who sell them directly to consumers) Channel members ass value, are more efficient, and cut down on expenses. Coordinate delivery efforts with advertising, promotions, production etc. Distribution centre facility for the receipt, storage, and redistribution of goods to company stores or customers: may be operated by retailers, manufacturers, or specialists. Direct marketing channel: no intermediaries between the buyer and seller, seller is manufacturer/individual, buyer is individual/business. Indirect marketing channel: one/more intermediaries work with manufacturers to provide goods/services to customers, manufacturer to retailer to customer or, manufacturer to wholesaler to retailer to customer. Interactions between members occur when they want something from each other. Members can be replaced if another feels they aren"t performing adequately. Conflicting goods can result in conflict common goals sustain relationship. Vertical channel conflict: supply chain members are not in agreement about their goals, roles, or rewards.
