CRAVENS
PIERCY
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McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
10-2
Chapter Ten
Value Chain
Strategy
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
10-3
Value Chain
Strategy
Peran Strategik distribution
Channel of distribution
strategy
Managing the channel
International channels
Supply chain management
issues
10-4
Strategic Role of
Distribution
Distribution functions
- buying and selling activities
- product assembly
- transportation
- financing
- processing and storage
- advertising and sales promotion
- pricing
- reduction of risk
- personal selling
- communications
- servicing and repairs
Channels for Services
Direct distribution by
manufacturers
10-5
Illustrative Example:
Internet Impact on
Distribution
The Impact of Technology
on Value Chains
In India
E-Government
Computer Kiosks
Agricultural e-commerce
Tele-medicine
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The Marketing
System
Manufacturers and producers
Facilitating
Suplier perantara
organizations
Pertania dan
bahan mentah Retailers
Financial
Agents-brokers
Transportation
Wholesalers-distributors
Advertising
Other
End users
Consumer
Industrial-institutional
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Marketing
Channels
Manufacturers/producers
Agents/brokers
Wholesalers/
distributors
Retailers Retailers
Consumers and organizational end users
10-8
Illustrative Example:
Samsung
Goal of moving from cheap imitative
electronics products to a cool brand
Feature-packed products
Products removed from shelves of Wal-
Mart and Target and positioned with
higher-end chains like Best Buy and
Circuit City
Samsung competes through hardware
innovation, product customization and
speed
Samsung sells only higher-end goods and
resists pressures towards marketing low-
price products
Strategy is implemented in part through
supply chain and distribution choices
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Distribution by
Manufacturers
Manufacturers mempunyai 3
alternatif distribution:
– Direct distribution
– Menggunakan perantara
– Gunakan keduanya sekaligus
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Factors Favoring Distribution by
Manufacturer
Peluang
Keunggulan
bersaing
Profit margins
Cukup untuk
Perubahan cepat
mendukung
Lingkungan pasar
Organisasi
distribution
Tahap awal
Lini produk
PLC
lengkap
Distribution
by the
manufacturer
Pembelian
Aplikasi produk
besar &
rumit
jarang
Jumlah pembeli Proses pembelian
Kecil, terkonsentrasi ekstentif
Secara geografis
Dukungan pelayanan
dibutuhkan
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Illustrative Example:
Retail Initiatives by
Manufacturers
Apple Computer
– Untuk mengedukasi konsumen tentang
computers and music players
Sony Electronics, palmOne
– Menguatan brands dengan mempengaruhi
konsumen & memahami dengan baik
market trends
Kekuatan mendorong akses pasar dan
market learning
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Channel of
Distribution Strategy
Types of distribution
channel
Distribution intensity
Selecting the
channel strategy
Strategies at
different
channel levels
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Steps in Channel Strategy Selection
(1) Type of channel arrangement
Conventional Vertically coordinated
Ownership Contractual Administ
ered
(2) Desired intensity of
distribution
Intensive Selective Exclusiv
e
(3) Selection of a channel configuration
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Distribution Intensity
Illustrations
Trading Area
A B C
++
+++
+
+ ++++
+ +
+ ++++
++
+ ++++
+ ++
+++
Exclusive Selective Intensive
distribution distribution distribution
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Selecting the Channel Strategy
`Design Stage Decision criteria
Identification Intensitas of distribution
of channel Access ke end users
alternatives Prevailing distribution
practices
Aktivitas & fungsi yg
dibutuhkan
Revenue-cost analysis
Jk waktu for
Evaluation
development
and
selection of Pertimbangan kontrol
channel(s) to Kendala Legal
be used Ketersediaan Channel
Pilih channel
Cakupan pasar
Capabilities
Selection
of channel Kebutuhan perantara
participants Fungsi yang diberikan
Ketersediaan
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Illustrative Channel Strategy
Evaluation
Evaluation Manufacturer’s Company
Criteria Representatives Salesforce
Market access Rapid 1 to 3 year
development
Sales forecast (2 years) $10 million $20 million
Forecast accuracy High Medium to low
Estimated costs $1 milli $2.4 million**
Selling Expense (cost/sales) 10% 12%
Flexibility Good Fair
Control Limited Good
* Includes 8% commission plus management time for
recruiting and training
representatives.
** Includes $100,000 for 10 salespeople, plus management time.
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Managing the Channel
Channel leadership
Management structure and systems
Physical distribution management
Channel relationships
Conflict resolution
Channel performance
Legal and ethical considerations
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International Channel of
Distribution Alternatives
Home country Foreign country
The foreign marketer
or
producer sells to or
through
Domestic Open Exporter Importer Foreign Foreign Foreign
producer or distribution agent or retailer consumer
marketer sells via domestic merchant
to or through wholesale wholesalers
middlemen
Export management company
or company
sales force
Source: Philip R. Cateora, International Marketing, 7th ed., Homewood, Ill.: Richard D. Irwin, Inc., 1990, 572.
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Strategic Value Chain
Management
Supply chain management
– Efficient Consumer Response
program
– Lean supply chains
– Agile supply chains
Impact of supply chain strategy
on marketing
E-business models
Retailer and distributor power
Strategic flexibility and change
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Efficient Consumer Response
Traditional channel problems
– Forward buying and diverting
– Excessive inventories
– Damages and unsaleable goods
– Complex deals and deductions
– Too many promotions and coupons
– Too many new products
Efficient Consumer Response
– Category management
– “Value” pricing replaces promotions
– Continuous replenishment and cross-docking
– Electronic data interchange
– New performance measures
– New organizational processes and structures
– Internet-based network for supplier-buyer
trading
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Lean Supply Chain
Elements
1. Definition of Value
2. Identification of Value Streams and
Removal of Muda (Waste)
3. Organizing Around Flow, Instead
of “Batch and Queue”
4. Responding to Pull Through
the Supply Chain
5. The Pursuit of Perfection
