Chapter 10 – Fashion Marketing Channels & Supply Chain Management

Marketing Channels / Distribution Channels
-Set of independent business organizations that help make a product available
What are Intermediaries
-Members of the marketing channel that work with manufacturers, other intermediaries and/or ultimate consumers
Retailers
*type of intermediaries
-Organizations that sell mainly to consumers
Merchant Wholesales
*type of intermediaries
-Businesses that own the goods they sell to other intermediaries
Agents & Brokers
*type of intermediaries
-Represent wholesalers, retailers, or manufacturers to customers
-Make buying & selling easier
The Purpose of Marketing Channels
-To accomplish what a manufacturer may not be willing or able to afford to do alone
-Tasks satisfy customers & profits
Channel of Distribution – 5 Stages
(map of how raw materials become products then get into the hands of customers as goods)
Raw Materials > Manufacturers > Wholesaler/Distributor > Retailer > Consumer
Channel Conflict
-Disagreements over which member should do what and how should each be compensated – can occur b/c members are often separate & often independent organizations
Marketing Consumer Goods
-4 marketing channels for consumer goods
*1 Direct Marketing Channel
*3 Indirect Marketing Channels
Direct Marketing Channels
*Marketing Consumer Goods
-A promotional strategy in which the seller initiates direct contact to carefully chosen individual customers by one or more channels in order to cultivate a relationship & solicit a response, usually in the form of a purchase
-Work directly w consumers
Indirect Marketing Channels
*Marketing Consumer Goods
-A marketing channel that contains one or more intermediary
-The shortest selling channel from manufacturer to retailer
(used by large marketers)
Business Marketing Channels
-Can be direct or indirect
-Services often marketed thru direct channels
Conventional Marketing Channels
-Independent manufacturers, intermediaries
-Each transaction is unique
-Doesn’t maximize profitability opportunities because lack of coordination leads to inefficiency
Vertical Marketing System (VMS)
Arrangement in which manufacturers & intermediaries work together to coordinate marketing efforts
-3 types of VMS [corporate, contractual, administered]
Corporate Marketing Systems
*Type of VMS
-Brings the entire channel under 1 ownership
Contractual Marketing Systems
*Type of VMS
-Exists thru written agreements between manufacturers and intermediaries
Administered Marketing System
*Type of VMS
-When 1 member of a of a marketing channel wields more power than the others
Franchise
An agreement between a large well known marketing organization and a local business to market the franchisers product exclusively
Multi-Channel Marketing
The use of marketers of a variety of channels in order to reach a wide range of customers
Channel Decisions
-Marketers need to consider a number of factors to choose the most appropriate channel to maximize profitability
Analyzing Customer Demand
*Channel Decisions
Fashion marketers analyze customer needs
Establishing Channel Goals
*Channel Decisions
3 factors when establishing channel goals
*customer service levels
*the size of the company
*external marketing factors
Determining Distribution Intensity
*Channel Decisions
Exclusive Distribution Strategy
– using 1 or a few retailers in a certain area (expensive/luxury goods)

Selective Distribution Strategy
-when marketing goods need some explination or that customers want to compare w similar goods (popular priced items)

Intensive Distribution Strategy
-Place products in many locations (cheaper products)

Dealing w Competitors
*Channel Decisions
Channel Management
Companies decide on the most useful marketing channels for their purposes, they first select, then motivate, and continually evaluate their choices
Marketing Logistics
Include planning, initiating & controlling the physical flow of products form producers to consumers
Supply Chain
The combination of businesses that perform the marketing logistics activities necessary in moving products from producers to consumers
Marketing Logistics Activities
Supply chain managers work to provide logistics systems that meet the levels of service at the cost each customer is willing to incur
*include a series of things
Transportation
*Marketing Logistics Activities
Intermodal Transportation
-combining more than 1 type of transportation such as truck and train or ship

Containerization
-shipping goods in standardized containers

Radio Frequency Identification
-tiny electronic chips that can be scanned with special equipment to provide detailed info about the product at any point thru the supply chain

Warehousing & Storage
*Marketing Logistics Activities
Marketers need to store goods for as short as possible to gain a profit
Inventory Management
*Marketing Logistics Activities
Maintaining an assortment of goods to fulfill store requirements & meet customer needs
Information Processing
*Marketing Logistics Activities
Receiving merchandise orders, locating the goods, and tracking their shipment to the retailer

Order processing – receiving & transmitting info concerning merch orders such as quantity, style & price

Exporting – the marketing of a company’s products in other countries