1. A Strategic Tool of Growing Importance for the Next Millennium

6. A competitive advantage that cannot be quickly and easily copied by competitors

8. Competitive Advantage Based on

10. Retailers

13. Concentration of Sales Among the Top 50 Retail Firms

14. Kinds of Retailers Where Largest Four Firms Account for At Least 50% of Total Sales Conventional Department Stores Discount Mass Merchandisers Variety Stores Misc. General Merchandisers Athletic Footwear Toy Stores

15. Percentage Distribution of Retail Firms and Sales by Size of Firms

16. Retailer

20. Thus, Effective Channel Strategy for Dealing with Power Retailers is Crucial

21. Distribution Costs

22. Sometimes Distribution Costs are Higher than the Manufacturing Cost or the Costs of Raw Materials and Component Parts

23. Autos Software Gasoline Fax Machines Packaged Foods Distribution Manufacturing Raw Materials and Components 15% 40% 45% 25% 65% 10% 28% 19% 53% 30% 30% 40% 41% 33% 26%

24. Disintermediation

28. Competition

32. Translation By getting channel members to focus on your products to a greater extent than your competitors, you gain market share and growth

34. Marketing Channel Strategy Has Become Critically Important For Most Businesses

38. C s = f (P 1 , P 2 , P 3 , P 4 ) where: C s = degree of customer satisfaction P 1 = product strategy P 2 = pricing strategy P 3 = promotional strategy P 4 = place (channel strategy)

44. Supply Chain Management takes a broader perspective by viewing logistics as an integral part of the marketing channel relationship

45. A long-term “partnership” among marketing channel participants aimed at reducing inefficiencies, costs, and redundancies in the logistical system in order to provide high levels of customer service

46. Factor Inventory Management Total Cost Approach Time Horizon Information Sharing and Monitoring Joint Planning Compatibility of Corporate Philosophies Channel Leadership Sharing of Risks and Rewards Inventory Flow Traditional Logistics System Independent Effort Minimize Firm Costs Short-Term Limited to Needs of Current Transaction Transaction Based Not Relevant Not Needed Each Channel Member on Their Own “ Warehouse” Mentality Storage Safety Stocks Supply Chain Mgmt. System Joint Effort to Reduce Channel Inventories Channel-Wide Cost Efficiencies Long-Term Continuous Effort to Gather and Monitor Ongoing Important for Major Initiatives Required for Coordination and Focus Risks and Rewards Shared over Long-range “ Distribution Center” Orientation-JIT, Quick Response, Cross Docking Contrasts Between a Traditional Logistics System and Supply Chain Based System

49. Continuing and mutually supportive relationship between the manufacturer and its channel members in an effort to provide a more highly motivated team, network, and alliance of channel partners

53. The practice of building long-term relations with key parties - customers, suppliers, distributors- in order to retain their long-term preference and business Because of the importance of channels of distribution, building good relationships in the marketing channel is key to successful relationship marketing