Chapter 15 (ppt - open in powerpoint for easier printing)
Transcript of Chapter 15 (ppt - open in powerpoint for easier printing)
ChapterFifteen
Distributing ProductsEfficiently and Competitively:
Supply Chain Management
Channel of Distribution
• Marketing Intermediaries
– Wholesaler
– Retailer
– Brokers
• Role of Intermediaries
– Create Efficiency
– Value vs. Cost
The Supply Chain
(Figure 15.6)
UtilityForm
Time
Place
Possession
Information
Service
OPEN 24 HRS
Wholesale Intermediaries
• Merchant Wholesalers
– Rack Jobbers
– Cash-and-Carry
– Drop Shippers
• Business to Business
(B2B)
Percent of B2B
Commerce from Internet
0.2% 0.4%
1.0%
2.1%
4.0%
6.3%
9.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
1997 1998 1999 2000 2001 2002 2003
*Excludes Service Industries
Source: Forrester Research Inc.
Retail Competition
• Price
• Service
• Location
• Selection
• Entertainment
Is it Becoming a
Wal-Mart World?
0
50
100
150
200
250
300
350
400
450
500
Number of
Wal-Mart
Stores
Mexico Puerto
Rico
Argentina Germany
*There are 2,985 stores in the U.S.
Source: Wal-Mart Annual Report 2000
Retail Store Distribution
• Intensive
Selective
Exclusive
Identify a Retailer
in Your Area
Supermarket
Convenience
Store
Discount Store
Department Store
Category Killer
Specialty Store
Factory Outlet
Superstores
Catalog
Showroom
The Wheel of Retailing
Passage
of
Time
2. Retail Outlet
1. Retail Outlet Starts
3. Retail Outlet
4. New Outlet Enters
Adds Service
Raises Prices
Better Location
Low Price
Limited Service
Out-of-way Location
Higher Prices
Higher Status
Low Price
Limited Service
Non-Store Distribution
• E-tailing
• Telemarketing
• Vending Machines, Kiosks,
Carts
• Internet
• Direct Selling
• Multilevel Marketing
• Direct Marketing
E-Business Expectations
0
5
10
15
20
25
30
35
40
%
Companies
Responding
None 1-5% 6-10% 11-20% 20%+ Don’t
Know
Now In 5 Years
Share of company revenues CEOs say come from e-business Now vs. In 5 years
Source: USA Today
Has The Internet
Changed Your Shopping Habits?
41% 37%
24% 38%
35%25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
High Use Low Use
Undecided
No
Yes
Survey of Americans who have high* Internet use vs.
those with low use
* high use = 15+ hours per week
Source: USA Today
What Online Shoppers
Bought* Per Month in 2000
$0 $50,00
0
$100,0
00
$150,0
00
$200,0
00
$250,0
00
$300,0
00
Airline Tickets
Computer Hardware
Apparel
Hotel Reserv.
Books
Software
Health & Beauty
Toys/Video Games
*In thousands of dollars
Source: Forrester Research
What does it take to persuade
consumers to buy online?
0
10
20
30
40
50
60
70
Percent
Assurance of
Privacy
Price Discounts Ability to Return
to Brick-and-
Mortar Store
*Survey of 1,944 Web
users that had not made
an online purchase
Source: CIO Web Business, 10/1/1999
Channel Cooperation
• Corporate Distribution
• Contractual Distribution
• Administered Distribution
• Supply Chain
Management
Contractual Distribution
• Franchise Systems
• Wholesaler-Sponsored
Chains
• Retail Cooperatives
Distribution/Storage Mode
• Railroad
• Motor Vehicles
• Water
• Pipeline
• Air
• Intermodal
• Storage
• Materials
Handling