Chapter 16 – Supply Chain and Channel Management Marketing 6th
Chapter 16
Supply Chain and Channel Management
Tools for Instructors
Brief Chapter Outline
Learning Objectives
Extended Chapter Outline with Teaching Tips
Answers to End of Chapter Learning Aids
Chapter Case Study
Additional Teaching Tips
Connect Activities
Brief Chapter Outline
The Importance of Marketing Channel/Supply Chain Management
Designing Marketing Channels
Managing the Marketing Channel and Supply Chain
Making Information Flow through Marketing Channels
Making Merchandise Flow through Marketing Channels
Chapter Case Study: Zara Delivers Fast Fashion
Learning Objectives
LO16-1 Understand the importance of marketing channels and supply chain management.
Marketing channels allow companies to get their products in the appropriate outlets in sufficient quantities
to meet consumer demand. To anticipate this demand, advertising and promotions must be coordinated
Without the members in a marketing channel, consumers would be forced to find raw materials,
manufacture products, and somehow get them to where they could be used, all on their own. Thus, each
LO16-2 Understand the difference between direct and indirect marketing channels.
There are two ways by which businesses get their goods to consumers. Using a direct marketing channel,
a customer can purchase goods from the manufacturer without needing to go through a retailer or
LO16-3 Describe how marketing channels are managed.
The more closely aligned the marketing channel members are with each other, the less likely there will be
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Chapter 16 – Supply Chain and Channel Management Marketing 6th
franchising), coordination and control are dictated by contractual relationships between members.
Corporate marketing channels can operate relatively smoothly because one firm owns the various levels
LO16-4 Describe the flow of information and merchandise in the marketing channel.
Information flow involves: flow 1 (customer to store), flow 2 (store to buyer), flow 3 (buyer to
manufacturer), flow 4 (store to manufacturer), flow 5 (store to distribution center), and flow 6
Extended Chapter Outline with Teaching Tips
I. The Importance of Marketing Channel/Supply Chain Management
A. Marketing Channels Add Value
B. Marketing Channel Management Affects Other Aspects of Marketing
II. Designing Marketing Channels
A Direct Marketing Channel
C. Indirect Marketing Channel
III. Managing the Marketing Channel and Supply Chain
A Managing the Marketing Channel and Supply Chains through Vertical Marketing Systems
1 Administered Vertical Marketing System
2 Contractual Vertical Marketing System
3 Corporate Vertical Marketing System
D. Managing Marketing Channels and Supply Chains through Strategic Relationships
1 Mutual Trust
4 Open Communication
5 Common Goals
6 Interdependence
7 Credible Commitments
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the differences between an indirect and a direct marketing channel?
2. What are the differences among the three types of vertical marketing systems?
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Chapter 16 – Supply Chain and Channel Management Marketing 6th
Answer: In an administered vertical marketing system, there is no common ownership or
3. How do firms develop strong strategic partnerships with their marketing channel partners?
II Making Information Flow through Marketing Channels
A Data Warehouse
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the marketing channel links associated with each information flow?
2. How do marketing channel members use data warehouses to make decisions?
Answer: Using the data warehouse, the CEO not only can learn how the corporation is generally
doing but also can look at the data aggregated by quarter for a merchandise division, a region of
3. What is EDI and how is it used?
4. Why do some marketing channels use VMI and others do not?
Answer: Although it is a more advanced level of collaboration than simply using EDI and sharing
IV. Making Merchandise Flow through Marketing Channels
A Distribution Centers versus Direct Store Delivery
E. The Distribution (or Fulfillment) Center
1 Managing Inbound Transportation
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Chapter 16 – Supply Chain and Channel Management Marketing 6th
2 Receiving and Checking Using UPC or RFID
3 Storing and Cross-Docking
4 Getting Merchandise Floor Ready
5 Ticketing and Marking
6 Preparing to Shipping Merchandise to Store
7 Shipping Merchandise to Stores
F. Customer Store Pick up
G. Inventory Management through Just-in-Time Inventory Systems
1 Reduced Lead Time
8 Increased Product Availability and Lower Inventory Investment
9 Costs of a JIT System
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. How does merchandise flow through a typical marketing channel?
2. Why have just-in-time supply chain systems become so popular?
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