Supply Chains And The Value Delivery Network. The Supply

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Supply Chains and the Value Delivery Network
The supply chain consists of “upstream” and “downstream” partners.

Upstream from the company is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service.

Marketers have traditionally focused on the “downstream” side of the supply chain—on the marketing channels (or distribution channels) that look forward toward the customer.

A better term would be demand chain because it suggests a sense-and-respond view of the market.

Under this view, planning starts with the needs of target customers, to which the company responds by organizing a chain of resources and activities with the goal of creating customer
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Others help to fulfill the completed transactions:

• Physical distribution: Transporting and storing goods.
• Financing: Acquiring and using funds to cover the costs of the channel work.
• Risk taking: Assuming the risks of carrying out the channel work.

Number of Channel Levels

A channel level is each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

The number of intermediary levels indicates the length of a channel. (Figure 12.2)

A direct marketing channel has no intermediary levels; the company sells directly to consumers.

An indirect marketing channel contains one or more intermediaries.

From the producer’s point of view, a greater number of levels means less control and greater channel complexity.

Channel Behavior and Organization
Channel Behavior

A marketing channel consists of firms that have partnered for their common good. Each channel member depends on the others.

Each channel member plays a specialized role in the channel. The channel will be most effective when each member assumes the tasks it can do best.

Disagreements over goals, roles, and rewards generate channel conflict.

Horizontal conflict occurs among firms at the same level of the channel.

Vertical conflict occurs between different levels of the same channel.

Marketing Logistics and Supply Chain Management

Nature and Importance of Marketing

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