MARK1012 Chapter Notes - Chapter 12: Marketing Channel, Direct Marketing, Marketing Mix
Supply Chain, Channel and Retail Management
1. Plae thid P of the aketig i iludes all ativities euied to get the ight podut
to the right customer when that customer wants it. Marketing channel management, which
also has been called supply chain management, refers to 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 and at the right time, as well as to minimise system-wide costs while satisfying the
service levels their customers require.
2. Typical Marketing Channel Model
3. Each participant in the channel adds value. Using channel partners can provide value overall.
4. Type of marketing channels:
a. Direct marketing channel: a channel where there are no intermediaries between the buyer
and the seller
b. Indirect marketing channel: a channel where one or more work with the manufacturer to
provide goods to the customers. Example of such channel:
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• Manufacturer → retailer → customer
• Manufacturer → wholesaler → retailer → customer
5. The participants in the marketing channel must cooperate to work efficientl. If the dot,
theell e soe oflit
a. Vertical channel conflict occurs when supply chain members that buy and sell to one
another are not in agreement about their goals, roles or rewards.
b. Horizontal channel conflict occurs when there is disagreement or discord among
members at the same level of marketing channel, such as two competing retailers or
two competing manufacturers.
It is helpful to have common goals with the supply chain members for the sake of the
long-run relationship.
6. Independent or conventional marketing channel, several independent members—a
manufacturer, a wholesaler and a retailer—each attempt to satisfy its own objectives and
maximise its profits, often at the expense of the other members. However, over time
independent marketing channel will develop into vertical marketing system, a marketing
channel in which the members act as a unified system
7. Types of vertical marketing system:
a. Administered vertical marketing system: there is no common ownership or contractual
relationships, but the dominant channel member controls or holds the balance of power.
Several types of power that the dominant supply chain member can exercise are reward
power, coercive power, referent power, expertise power, information power, legitimate
power.
b. contractual vertical marketing systems is when independent firms at different levels of
the marketing channel join together through contracts to obtain economies of scale and
coordination and to reduce conflict. Franchising is a popular contractual vertical
marketing systems.
c. corporate vertical marketing system, the parent company has complete control and can
dictate the priorities and objectives of the marketing channel because it owns multiple
segments of the channel, such as manufacturing plants, warehouse facilities and retail
outlets
8. Most firms would want to maintain a strategic or partnering relationship with its supply
chain members if they are interested in a long run relationship. These strategic relationships
are created explicitly to uncover and exploit joint opportunities. Successful strategic
relationships require mutual trust, open communication, common goals, interdependence
and credible commitments.
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Document Summary
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