1. Chapter 12 Distribution Channels and Logistics Management PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstong

5. Consumer Marketing Channels & Levels Direct Indirect Channel 1 Channel 2 Channel 3 Channel 4 Channel Level - A Layer of Intermediaries that Perform Some Work in Bringing the Product and it’s Ownership Closer to the Buyer. M W J R C     M W R C   M R C  M C

7. Types of Vertical Marketing Systems Corporate Common Ownership at Different Levels of the Channel Contractual Contractual Agreement Among Channel Members Administered Leadership is Assumed by One or a Few Dominant Members Greater Lesser Degree of Direct Control

8. Vertical Marketing Systems Vertical Marketing Systems (VMS) Corporate VMS Contractual VMS Administered VMS Retailer Cooperatives Franchise Organizations Wholesaler Sponsored Voluntary Chain Service-Firm- Sponsored Franchise System Manufacturer- Sponsored Wholesaler Franchise System Manufacturer- Sponsored Retailer Franchise System

10. Channel Design Decisions Analyzing Consumer Service Needs Setting Channel Objectives & Constraints Exclusive Distribution Selective Distribution Intensive Distribution Identifying Major Alternatives Evaluating the Major Alternatives

11. Channel Management Decisions Selecting Motivating Evaluating FEEDBACK

14. Logistics Systems Inventory When to order How much to order Just-in-time Costs Minimize Costs of Attaining Logistics Objectives Warehousing Storage Distribution Order Processing Submitted Processed Shipped Logistics Functions Transportation Water, Truck, Rail, Pipeline & Air

15. Transportation Modes Rail Nation’s largest carrier, cost-effective for shipping bulk products, piggyback Truck Flexible in routing & time schedules, efficient for short-hauls of high value goods Water Low cost for shipping bulky, low-value goods, slowest form Pipeline Ship petroleum, natural gas, and chemicals from sources to markets Air High cost, ideal when speed is needed or to ship high-value, low-bulk items

16. Choosing Transportation Modes 1. Speed. 2. Dependability. 3. Capability. 4. Availability. 5. Cost. Checklist for Choosing Transportation Modes

17. Integrated Logistics Management Concept Recognizes that Providing Better Customer Service and Trimming Distribution Costs Requires Teamwork , Both Inside the Company and Among All the Marketing Channel Organizations. Cross-Functional Teamwork inside the Company Building Channel Partnerships Third-Party Logistics