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CHAPTER Day 20 BUS 222 Agenda • Questions? • Assignment 6 Not Corrected yet – Will be corrected by next class • Assignment 7 will be posted by next class • Quiz 5 is Corrected – 3 A’s, 3 B’s, 2 C’s, 1 D and 4 F’s • Quiz 6 is April 21. One week from today – Chaps 15 & 16, 30 Mins – 10 M/C questions and one extra credit on types of retailers • Finish Discussion on Supply Chain and Channel Management • Begin Discussion on Retailing and Multichannel Marketing Rest Of Semester Schedule • April 17 – Chap 17 • April 21 – Quiz 6 ( Chap 15 & 16) – Chap 18 • April 24 – Chap 18 • April 28 – Chap 19 – Assignment 7 Due • May 1 – Quiz 7 (chaps 17, 18 & 19) • May 5 @ 10 AM – Marketing Plan Presentations • May 7 @Midnight – Marketing Plans due CHAPTER SUPPLY CHAIN AND CHANNEL MANAGEMENT McGraw-Hill/Irwin 15 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Supply Chain and Channel Management LEARNING OBJECTIVES LO1 Define supply chain management LO2 Recognize the value added by the supply chain. LO3 Describe the flow of merchandise and the flow of information in the supply chain. LO4 Describe how supply chains are managed. Courtesy Tubular Steel, Inc. Inventory Management Through Just-In-Time Systems Just-in-time (JIT) Quick response (QR) Benefits of JIT Systems Reduced lead time James Leynse/Corbis Increased product availability and lower inventory investment Check Yourself 1. How does merchandise flow through a typical supply chain? 2. Why have just-in-time supply chain systems become so popular? Courtesy The Stanley Works Managing the Marketing Channel and Supply Chain Supply chain or channel conflict Managing the Marketing Channel and Supply Chain through Vertical Marketing Systems Independent or conventional supply chain McDonald’s Vertical Marketing/Supply Chain Types of Vertical Marketing Systems Independent or conventional supply chain Administered vertical marketing system Contractual vertical marketing system Corporate vertical marketing system Managing Marketing Channels and Supply Chains Through Strategic Relationships Common Goals Open Communications Mutual Trust Interdependence Strategic Relationships Credible Commitments Used by Permission of Deutsch Inc as Agent for National Fluid Milk Processor Promotion Board Relationship of supply chain members Check Yourself 1. What are the differences between the three types of vertical marketing systems? 2. How do firms develop strong strategic partnerships with their supply chain partners? CHAPTER RETAILING AND MULTICHANNEL MARKETING McGraw-Hill/Irwin 16 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Retailing and Multichannel Marketing LEARNING OBJECTIVES LO1 Discuss the four factors manufacturers should consider as they develop their strategy for working with retailers. LO2 Outline the considerations associated with choosing retail partners. LO3 List the three levels of distribution intensity. LO4 Describe the various types of retailers. LO5 Describe the components of a retail strategy. LO6 Identify the benefits of stores. LO7 Identify the benefits of multichannel retailing. LO8 Detail the challenges of multichannel retailing. Factors for Establishing a Relationship with Retailers Choosing a Retail Partner Channel Member Characteristics Distribution Intensity Customer expectations Channel Structure Choosing Retail Partners Channel Structure Degree of vertical integration Manufacturers brand Power of manufacturer and retailer ©M Hruby Choosing Retail Partners Customer Expectations Choosing Retail Partners Channel Member Characteristics Larger firms Less likely to use supply chain intermediaries Can gain more control, be more efficient, and save money. Choosing Retail Partners Intensive ©Jeff Greenberg/PhotoEdit Distribution Intensity (number of partners) Selective ©Susan Van Etten/PhotoEdit Exclusive Distribution Intensity Why might Birkenstock choose an exclusive distribution intensity? Courtesy Birkenstock USA Check Yourself 1. What issues should manufacturers consider when choosing retail partners? 2. What is the difference between intensive, exclusive, and selective levels of distribution intensity? Courtesy wwwadbustersorg Retailer’s Reaction? How do you expect retailers would respond to this? Types of Retailers Food Retailers Supermarket Limited nonfood Supercenter Warehouse Club Includes Limited discount store assortment Wal-Mart, Differentiates Meijer, different K-Mart, types of foods Target Convenience Store Limited variety Little service Includes: Good Costco, Sams, locations BJ’s Peapod Website General Merchandise Retailers Department Stores Full-line Discount Specialty Drugstores Category Specialist Extreme value Off-Price •Broad variety and deep assortment •Broad variety at low prices •Limited merchandise with service in small store •Specialty for pharmaceutical and heath •Discount with narrow but deep assortment •Full line, limited, very low prices •Inconsistent assortment of brand name at low prices Kmart and Sears GNC Private Brands Courtesy GNC Corporation Courtesy GNC Corporation Service Retailers Check Yourself 1. What strategies distinguish the different types of food retailers? 2. What strategies distinguish the different types of general merchandise retailers? 3. Are organizations that provide services to consumers considered to be retailers? Developing a Retail Strategy Using the Four P’s: Product AP Photo/David Kohl Providing the right mix of merchandise and services Price Courtesy DDB - London Price defines the value of both the merchandise and the service provided Build-a-Bear Workshop Commercial Courtesy Bass Pro Shops AP Photo/MarkHumphrey Promotion Retailers use a wide variety of promotions, both within their retail environment and through mass media Place ©M Hruby Convenience is a key ingredient to success The McGraw-Hill Companies, Inc/ Jill Braaten, photographer Wal-Mart Faces Biggest Civil Rights Suits http://www.propublica.org/article/the-impact-and-echoes-of-the-wal-mart-discrimination-case Benefits of Stores for Consumers Browsing Touching and Feeling Personal Service Cash and Credit Entertainment and Social Interaction Instant Gratification Risk Reduction Benefits of the Internet and Multichannel Retailing Deeper and Broader Selection Personalization Gain Insights into Consumer Shopping Behavior Increase Customer Satisfaction and Loyalty Expand Market Presence Courtesy LL Bean How does the Internet Improve Multichannel Shopping? Perceived Risk in Internet Shopping Courtesy Zafu Effective Multichannel Marketing Integrated CRM Brand Image Pricing Supply Chain