Marketing Chapter 12 Amazon’s CEO, Jeff Bezos, predicts a new age of power for customers who are enabled

Chapter 15 – Managing Marketing Channels and Supply Chains

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TEACHING NOTE FOR VIDEO CASE VC-12

Amazon: Delivering the Earth’s Biggest Selection!

Synopsis

Show Slide 12-39. Amazon’s CEO, Jeff Bezos, predicts a new age of power for

customers who are enabled to search for and purchase a growing variety of products online.

A pioneer of fast, convenient, low-cost virtual shopping, Amazon is now a household name.

Teaching Suggestions

Ask students to identify three relatively successful examples of e-commerce other than

Amazon. Then have them match these companies with competitors whose distribution does not

rely primarily upon the Internet. Finally, ask the students to compare the relative strengths and

weaknesses of each competitive pair.

[Video 12-4: Amazon Video Case (kerin.tv/cr8e/v12–4)]

Answers to Questions

1. How do Amazon.com’s logistics and supply chain management activities help the

company create value for its customers?

Answers:

b. Logistics and supply chain management activities lead to benefit enhancement by:

• Offering competitive pricing. Lowered costs due to improved supply-chain

performance can be passed on to consumers as lower prices.

Chapter 15 – Managing Marketing Channels and Supply Chains

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2. What systems did Amazon develop to improve the flow of products from suppliers to

Amazon distribution centers? What systems improved the flow of orders from

distribution centers to customers?

Answers:

a. Flow of products from suppliers to distribution centers. The center of the

e-business supply chain is an information hub, where incoming information is quickly

3. Why will logistics and supply chain management play an important role in the future

success of Amazon.com?

Answer:

There are many internal tasks within an e-commerce company like Amazon, which begin

when a customer places an order. Placing an order begins a series of transactions

throughout the supply chain. An order must be quickly and accurately delivered as a result

Chapter 15 – Managing Marketing Channels and Supply Chains

Epilogue

Amazon continues to develop new and innovative approaches to logistics and supply

chain management. CEO Jeff Bezos recently announced that in the next few years Amazon

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ICA 12-1: IN-CLASS ACTIVITY

Marketing Channels for Apple1

Learning Objective. To have students learn about the marketing channels Apple

currently uses to sell its computers, digital devices, and software products to consumers.

Steps to Teach this ICA.

1. OPTIONAL: Bookmark the following websites on your classroom computer:

2. To determine how familiar students are with Apple’s marketing channel structure, ask

them the following question:

• Question 1: Within the last year, have any of you purchased a product (iMac,

iPad, iPhone, iPod, software, etc.) marketed or sold by Apple? If yes, where

did they purchase it?

3. Ask students the following questions regarding Apple’s marketing channel structure:

• Question 2: Consumers can buy Apple products online through its Apple

Online Store. If you were to purchase an Apple product from the Apple

Online Store (http://store.apple.com/us), (a) identify the channels members

as a producer, wholesaler, and/or retailer and (b) classify the channel

strategy used by Apple and its channel members as direct or indirect.

Chapter 15 – Managing Marketing Channels and Supply Chains

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• Question 3: Apple has over 400 Apple Retail Stores, including many in

foreign countries. If you were to purchase an Apple product from an Apple

Retail Store (www.apple.com/retail), (a) identify the channels members as a

producer, wholesaler, and/or retailer and (b) classify the channel strategy

used by Apple and its channel members as direct or indirect.

Answers:

• Question 4: Under its Authorized Apple Reseller program, Apple has also

established a relationship with Best Buy, the #1 retail electronics chain in the

U.S. Each store’s layout is organized into departments. The computer

department contains Apple hardware and software products and is staffed

by Best Buy employees. Assume that Best Buy obtains its entire inventory

from Ingram Micro, the nation’s largest technology product distributor.

If you were to purchase an Apple product from Best Buy

Answers:

(a) Channel members are “Producer (Apple)→Wholesaler (Ingram

• Question 5: Under its Authorized Apple Reseller program, Apple has also

established a relationship with MacMall, which sells Apple products online,

by telephone, through its catalog, and a retail store. If you were to purchase

an Apple product from MacMall (www.macmall.com), (a) identify the

channels members as a producer, wholesaler, and/or retailer and (b) classify

the channel strategy used by Apple and its channel members as direct or

indirect.

Chapter 15 – Managing Marketing Channels and Supply Chains

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Answers:

Chapter 15 – Managing Marketing Channels and Supply Chains

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ICA 12-2: IN-CLASS ACTIVITY

Marketing Channels for Fastenal1

Learning Objectives. To have students identify: (1) the points of difference, (2) target

market segments, and (3) marketing channels that might be used for a category of unique

threaded fasteners distributed by Fastenal Company.

Nature of the Activity. To help students understand the unique nature of the threaded

fastener products (points of difference) and their applications and target markets so students can

suggest the appropriate marketing channel(s).

Estimated Class Time and Teaching Suggestions. About 10 minutes.

Steps to Teach this ICA.

2. Give students the following mini-lecture on threaded fasteners:

“The term ‘threaded fasteners’ is just a name for screws, bolts, and related items used

3. Give students the following mini-lecture on Fastenal’s unique threaded fasteners:

“There are common fasteners, like the ones any of us can buy at a hardware store like

Ace or a home improvement store like Home Depot, and use in everyday

Chapter 15 – Managing Marketing Channels and Supply Chains

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4. Next ask students the following questions about fasteners:

• Question 1: What is the main point of difference for these fasteners?

• Question 2: Where are these fasteners most likely to be needed?

• Question 3: What kinds of organizations are most likely to buy them?

• Question 4: Where would industrial customers purchase these fasteners?

• Question 5: What are the problems or challenges facing the company who

wants to reach these special customers? What will it take to reach these

customers and why should Fastenal do it?

5. Customers that use these special threaded fasteners look to two common marketing

channels for business products, as shown in Figure 12-4:

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Exercise 1: Vertical Marketing Systems at Starbucks

Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topics: Marketing Channels, Vertical Marketing Systems

Learning Objective: LO 12-02 Distinguish among traditional marketing channels, electronic

marketing channels, and different types of vertical marketing systems.

AACSB: Knowledge Application

Blooms: Remember

Difficulty Level: 1 Easy

Exercise 2: Marketing Channel Functions at Home Depot

Activity Summary: In this click and drag activity, students evaluate the functions performed by

intermediaries. Students are provided with the major activities related to the intermediary

Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topic: Channel Management

Learning Objective: LO 12-01 Explain what is meant by a marketing channel of distribution

and why intermediaries are needed.

AACSB: Knowledge Application

Blooms: Apply

Difficulty Level: 2 Medium

Exercise 3: Total Logistics Cost Factors

Activity Summary: In this click and drag activity, students learn about the logistics costs factors

Chapter 15 – Managing Marketing Channels and Supply Chains

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Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topic: Logistics

Learning Objective: LO 12-04 Explain what supply chain and logistics management are and

how they relate to marketing strategy.

AACSB: Knowledge Application

Blooms: Apply

Difficulty Level: 2 Medium

Exercise 4: Amazon: Delivering the Goods… Millions of Times

Activity Summary: In this 8-minute news-documentary style video case, students learn about

Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topics: Electronic Marketing Channels, Logistics, Consumer Needs and Wants, Marketing

Channels

Learning Objectives: LO 12-01 Explain what is meant by a marketing channel of distribution

and why intermediaries are needed.

Exercise 5: iSeeit! Video Case: Supply Chain

Chapter 15 – Managing Marketing Channels and Supply Chains

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Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topics: Logistics, Wholesaling, Supply Chain Management

Learning Objectives: LO 12-01 Explain what is meant by a marketing channel of distribution

and why intermediaries are needed.

LO 12-04 Explain what supply chain and logistics management are and

how they relate to marketing strategy.

AACSB: Knowledge Application

Blooms: Apply

Exercise 6: Target Market Coverage: Distribution Density

Activity Summary: In this click and drag activity, students learn about distribution density. The

Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topic: Levels of Distribution Density

Learning Objectives: LO 12-03 Describe factors that marketing executives consider when

selecting and managing a marketing channel, including legal restrictions.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty Level: 2 Medium

Marketing Analytics Exercise: Channel Sales and Profits

Activity Summary: In this analytics exercise, students analyze the distribution strategy for a

company that manufactures a digital personal assistant similar to the Amazon Echo. Currently,

Chapter 15 – Managing Marketing Channels and Supply Chains

Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)

Topic: Marketing Analytics

Learning Objectives: LO 12-03 Describe factors that marketing executives consider when

selecting and managing a marketing channel, including legal restrictions.

AACSB: Analytical Thinking

Blooms: Analyze

Difficulty Level: 3 Hard

Follow-Up Activity: Instructors could use the spreadsheet as a launching point for a discussion

about the importance and value of intermediaries. The goal of the discussion would be to have

students understand why manufacturers use different types of intermediaries to reach buyers.