Marketing Channels
Delivering Customer Value
Chris Beltran, Messaline Clement, Mireya Gama,
Cody Prue
Agenda
 Chapter 12 Key Ideas
 Video
 In-N- Out Comprehensive Model
 Discussion Questions
The Value Delivery Network
Direct Marketing Channel vs.
Conventional Marketing
Channel
Direct
Producer
Conventional
Producer
Wholesaler
Consumer
Retailer
Consumer
Vertical Marketing System
 In-N-Out: Corporate VMS
 Ford: Contractual VMS
 Walmart, Home Depot: Administered VMS
Horizontal Marketing System
 Walmart & McDonalds
 Taco Bell & Pizza Hut
Multichannel Distribution
Channel Design Decision
Supply Chain Management
Supply Chain Management
• Managing upstream and downstream
value- added flows of materials, final
goods, and final consumer
Channel Management
Decision
 Selecting Channel Members
 Managing and motivating channel members
 Evaluating channel members
Public Policy and
Distribution Decisions
 Exclusive territorial agreements
 Producer or seller limit territory
 Exclusive dealing
 Seller requires that the sellers not handle
competitor’s products
 Exclusive distribution
 Seller allows only certain outlets to carry its products
 Tying agreements
 Dealer must take most or all of the line
Major Logistics Functions
 Marketing logistics:
Warehousing
Inventory
Management
 Planning, implementing, and
controlling the physical flow of
goods and services from points
of origin to points of
consumption
 Transportation
Transportation
Logistics
Information
Management
 Trucks- 40%
 Railroads- 40%
 Water carriers- Less than 5%
 Air carriers & Pipelines- Less
than 1%
Third Party Logistics
 3PL Supply Chain
 Defined as a firm that provides service to its
customers of outsourced (3rd Party) logistics as
part of their supply chain management functions.
 Typically specialized in warehousing and
transportation that can be catered to customers
needs.
Tangible Good
Introduction
 Leading fast- food retail chain with over 200 locations in
California, Nevada, and Arizona
 Private, family- run, non- franchised company
 Harry Snyder and his wife, Esther, opened what is said to
be California's first drive-thru restaurant.
 Known for its made- to –order hamburgers, fresh
ingredients and efficient service
 Maintained the steady rate of expansion with traditional
menu and a simple, customer- friendly philosophy
Distribution
 Own distribution system
 Private butchers, warehouses, truck lines
 Must improve system to expand beyond west coast
and maintain strategic position
Comprehensive Model of
the Marketing Distribution
Channel
Supplier
In-N-Out
Distributor
Consumer
Discussion Questions
 Do you believe In-N-Out Burger should remain non
franchised or branch out like their competitors?
 What are the complexities of using international
distribution channels?
References
 http://extensionengine.com/project-vs-productmanagement/
 http://www.referenceforbusiness.com/history/HeJa/In-N-Out-Burgers-Inc.html#b
 http://partners.visitrenotahoe.com/innoutburger