13
Chapter
Supply Chain and
Distribution Strategies
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13- 1
Chapter Objectives
1.
What are the different kinds of marketing
channels?
2.
What are the most important channel-strategy
decisions?
3.
How do companies manage the flow of products
and services from production to the final
consumer?
4.
What role do retailers and wholesalers play in the
supply chain? What are the most important role
categories of retailers and wholesalers?
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
13- 2
O BJECTIVE 1
What are the different kinds of marketing
channels?
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D
E
F
I
N
E
D
A Marketing
Channel is a network
of all parties involved in moving products
or services from producers to consumers
or business customers.
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Marketing Channels
E
X
P
L
A
I
N
E
D
Gather Information
Develop Communications
Negotiate Prices
Place Orders
Store and Transport
Provide Credit
Make Sales
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Marketing Channels
A
P
P
L
I
E
D
Wholesalers
Retailers
Channel
Members
Agents
Facilitators
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Consumer Marketing Channels
A
P
P
L
I
E
D
Producer
Consumer
Producer
Producer
Producer
Wholesaler
Agent
Retailer
Consumer
Retailer
Consumer
Retailer
Consumer
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Business Marketing Channels
A
P
P
L
I
E
D
Producer
Customer
Producer
Dealer
Customer
Producer
Agent
Supply
Company
Customer
Producer
Wholesaler
Distributor
Customer
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Contact Efficiency
A
P
P
L
I
E
D
Manufacturers
Customers
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Contact Efficiency
A
P
P
L
I
E
D
Manufacturers
Retailer
Customers
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O BJECTIVE 2
What are the most important channelstrategy decisions?
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D
E
F
I
N
E
D
A Channel
Strategy describes the
levels, organization, and distribution
intensity of a marketing channel.
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Channel Strategies
E
X
P
L
A
I
N
E
D
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Channel Strategies
A
P
P
L
I
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D
Conventional Channel
Vertical Marketing System
Producer
Producer
Wholesaler
Retailer
Wholesaler
Retailer
Consumer
Consumer
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Distribution Intensity
A
P
P
L
I
E
D
Intensive
Distribution
Selective
Distribution
Exclusive
Distribution
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Multichannel Design
A
P
P
L
I
E
D
Producer
Wholesaler
Consumer
Retailer
Retailer
Consumer
Consumer
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Channel Conflict
A
P
P
L
I
E
D
Multichannel Conflict
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D
E
F
I
N
E
D
Logistics is the coordination of all
activities related to the transportation
or delivery of products that occur
within the boundaries of a single
business or organization.
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Logistics
E
X
P
L
A
I
N
E
D
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Logistics
A
P
P
L
I
E
D
Inbound Logistics
Outbound Logistics
Reverse Logistics
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Logistics Decisions
A
P
P
L
I
E
D
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O BJECTIVE 3
How do companies manage the flow of
products and services from production to the
final consumer?
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D
E
F
I
N
E
D
Physical Distribution is the
process of carrying goods to
customers.
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Physical Distribution
E
X
P
L
A
I
N
E
D
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Physical Distribution
A
P
P
L
I
E
D
Shippers
Carriers
Consignees
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Transportation
A
P
P
L
I
E
D
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Warehousing
A
P
P
L
I
E
D
Breaking Bulk
1
2
3
4
Create Assortments
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Warehousing
A
P
P
L
I
E
D
RFID Chip
Distribution Center
Barcode Reader
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O BJECTIVE 4
What role do retailers and wholesalers play
in the supply chain? What are the most
important role categories of retailers and
wholesalers?
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13- 29
D
E
F
I
N
E
D
Retailing involves the
sale of products or services
to consumers.
Wholesaling is the sorting,
storing, and reselling of products
to retailers and businesses.
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Retailing and Wholesaling
E
X
P
L
A
I
N
E
D
Wholesaler
Retailer
Consumer
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Retailing Strategy
A
P
P
L
I
E
D
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Types of Retailers
A
P
P
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D
Retailer Type
Specialty store
Department store
Supermarket
Convenience store
Discount store
Off-price retailer
Superstore
Online retailer
Example
The Limited, Sports Authority
Nordstrom, Macy’s
Kroger, Jewel
7-Eleven, Circle K
Wal-Mart, Target
Marshalls, TJ Maxx
Best Buy, Home Depot, Staples
Amazon.com, Flowers.com
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Types of Wholesalers
A
P
P
L
I
E
D
Cash-and-carry wholesaler
Merchant
Wholesalers
Drop shippers
Rack jobbers
Mail-order wholesalers
Manufacturer’s agents
Selling agents
Commission merchants
Merchandise
Agent/Brokers
Merchandise brokers
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Visual Summary
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