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Business and Economics

MKW1120
Marketing Theory and Practice
Lecture 10A : Marketing Logistics

Overview
 The nature of marketing logistics networks


The nature of marketing channels

 The major channel alternatives open to marketing
organisations

2

Supply chains and the value delivery
network

 A company cannot go it alone in creating customer value. It must work within an entire network of partners to accomplish this task. Individual companies and brands don’t compete; their entire value delivery networks do

3

1

The nature and importance of marketing
channels
Why are marketing intermediaries used?

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© Commonwealth of Australia, reproduced by permission

4

Marketing channel functions
Information

Promotion

Contact

Matching

Negotiation

Physical
distribution

Financing

Risk taking

5

Number of channel levels

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6

2

Channels in the service sector

 The concept of marketing channels is not limited to the
distribution of goods

7

Marketing logistics and supply chain
management
Nature and importance of marketing logistics

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8

Marketing logistics objectives

 Many marketing organisations state their marketing logistics objective as ’getting the right goods to the right places at the right time for the least cost’. Unfortunately, this objective provides little practical guidance

9

3

Marketing logistics decisions

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10

Marketing logistics decisions (con’t)
• Cycle-time reduction decisions
• Conversion operations location decisions
• Manufacturing and operations process decisions
• Order-processing decisions
• Warehousing decisions
• Inventory decisions
• Transport decisions
• Choosing transportation modes

11

Flows in marketing logistics networks
Crossfunctional
team
Building
channel
partnerships
Third-party
logistics

12

4

Channel behaviour and organisation
Channel behaviour

Horizontal
conflict

Vertical
conflict

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13

Channel organisation


Vertical marketing networks

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14

Vertical marketing networks (cont’)


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15

5

Horizontal marketing networks

 A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity

16

Multichannel networks

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17

Changing channel organisation

Changes in
technology and the
explosive growth of
direct and on-line
marketing are having
a profound impact on
the nature and
design of marketing
channels

© Commonwealth of Australia, reproduced by permission

18

6

Channel design decisions
Analysing consumer
service needs
Setting channel
objectives and
constrains
Identifying the major
channel alternative

• Types of intermediaries
• Number of marketing intermediaries
• Responsibilities of channel members

Evaluating the major
channel alternatives

• Economic criteria
• Control criteria
• Adaptive criteria

Designing international
marketing channels

© Commonwealth of Australia, reproduced by permission

19

Channel management decisions

Selecting
channel
members

Motivating
channel
members

Evaluating
channel
members

20

Summary



Marketing logistics networks are a vital part of marketing



Management of the logistics function adds value to the
customer and the business

21

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