place mix Flashcards
refers to the activity designed to create value and utility by making the product/s available in the market place
Supply Chain
are sets of interdependent
organizations that make a product or service available for use or consumption. e.g. wholesalers and retailers.
Marketing / Distribution Channels
collect and process information obtained through
market research and for planning and organization processes of distribution of goods.
Reporting
provide marketing communication of information about
products to attract buyers
Promotion
establish and maintain
relationships with potential buyers, agreement on prices, volumes and terms of delivery
Establish contacts and negotiations
conclusion of contracts with other members of distribution
channel to purchase products from the manufacturer and monitor their implementation.
Ordering
production, sorting,
packing and wrapping, assembling products, after sales service.
Adapt products to customer requirements
the organization of transportation and
warehousing.
Physical movement of goods
search and distribution of the funds needed to cover the
operating cost of the distribution channel.
Financing
the responsibility for all processes in the channel of
distribution.
Risk-taking
Levels of Sales Channel
- Producer of pharmaceutical products (pharmaceutical manufacturer)
- Wholesale intermediary
(national level, importer) - Wholesale intermediary (regional level)
- Community or Hospital Pharmacy
- Consumer (health care facilities, outpatients, inpatients)
three approaches to determining the degree of intensity of use of the channel:
- Intensive Distribution
- Exclusive Distribution
- Selective or Targeted
Distribution
- For goods of daily demand requiring a large number of
wholesalers and retailers - Target wide market coverage and high profits through quick
selling of good
Intensive Distribution
- Limited number of
intermediaries are given
exclusive right to sell
products within the
firm’s sales territories - Promotes responsible
mediator and gives
premium image
allowing higher margins
Exclusive Distribution
- Allows establishment of
business relationship
with select intermediaries - Achieve required
market coverage with
more stringent control
and less cost
Selective or Targeted Distribution
Intermediaries who are owners of the goods
Wholesaler
Distributor
Retailer
Dealer
- Receives a large amount of goods from different manufacturers and organize their movement in retail or direct distribution to consumers
- Profit is formed from difference between buying and selling price of goods
Wholesaler
- Performs mainly import operations and acts as dealer under contract between sellers and buyers of the products
- Buys and sells goods on its own name and expense
Distributor
- Independent intermediary specializing in the sale of durable goods requiring after-sales service
- Refer also to reseller of goods
Dealer
- Legal entity that directly sells certain amount of goods to the final consumer
- Products are obtained from wholesalers or manufacturers
Retailer
- Owns a warehouse and implements goods in benefit and at the expense of owner of goods under his/its name
- Commission is % of operation amount or difference between designated price and selling price
Commissionaire
Intermediaries who have no right of ownership on goods sold
Broker
Commissionaire
Consignee
- Brings buyer and seller together and receives agreed commission
- Does not buy goods nor accept responsibility for them
Broker
- Owns a warehouse and implements goods in benefit and at the expense of owner of goods under the name of the owner
- Remuneration is based on actual goods sold
Consignee
Management of Distribution Channels
- Defining the objectives of sales
- Development of alternative options for the structure
of distribution channels - Selecting channel members
- Motivation of channel members
- Evaluation and monitoring activities of intermediaries
- Settlement of conflicts
- expansion of market reach
- penetration into new market segments
- increasing market share, sales or profits
Defining the objectives of sales
- Characteristics of end-users
- Capability of intermediaries
- Product characteristics
- Competition
- Development of alternative options for the structure of
distribution channels
number, frequency of
purchase, demand for services
(Development of alternative options for the structure of
distribution channels)
Characteristics of end-users
number and concentration, product range, customers
(Development of alternative options for the structure of
distribution channels)
Competition
resources, expertise
(Development of alternative options for the structure of
distribution channels)
Capability of intermediaries
technical specifications, storage conditions
(Development of alternative options for the structure of
distribution channels)
Product characteristics
- Chosen intermediary is not a mediator of a competitor
- Specialized intermediaries with experience in the sale of
product - Well-known company that has an impeccable industry
reputation - Extend of equipment logistics of intermediary and skill
level of employees - Location of the firm, field of expertise, marketing concept
and program
- Selecting channel members
Economic incentives
Compensation
- Motivation of channel members
Increasing the number of intermediaries reduces business risks (t or f)
T
like greater profit margins, cash bonuses, joint marketing campaigns, etc
Economic incentives
- Evaluation and monitoring activities of intermediaries
6 C Concepts:
Cost Control Coverage Capital Character Continuity
for accomplishment of agreed tasks like targets in market coverage, quality service, gathering of market information
Compensation
Management of distribution channels involves identifying
and preventing potential conflicts.
a. Vertical conflicts
b. Horizontal conflicts
c. Multi-channel conflicts
- Settlement of Conflicts
occur between different levels of channel (manufacturer-wholesaler; wholesaler-retailer)
* “bypassing” another channel member
* disagreements in profit distribution
* Manufacturer opinion that intermediary is not
promoting products
* attempt to establish control over the intermediary
Vertical conflicts
occur between mediators of the same level
* competition between pharmacies, e.g. chain versus
independent
* competition among wholesalers
Horizontal conflicts
between multiple separate channels with different method of distribution
established by the manufacturer to service the market
* Competition between
pharmacies and network
marketing of dietary
supplements
Multi-channel conflicts
Top Challenges of the Pharmaceutical Supply Chain
-Lack of Coordination
-Inventory Management
-Demand Information
-Human Resource Dependency
-Order Management
-Shortage Avoidance
-Drug Expiration
-Warehouse Management
-Temperature Control
-Shipment Visibility
are revolutionizing the way pharmaceutical companies handle critical processes, enabling them to streamline operations, improve efficiency, and enhance
patient safety
AI technologies
- AI algorithms analyze historical data, market trends, and external factors to provide accurate demand forecasts
- Machine learning models allow pharmaceutical companies to optimize inventory levels, reduce waste and ensure timely availability of medications
Demand Forecasting and Inventory Optimization
- Optimize transportation logistics by considering various factors like traffic conditions, distance, and cost * Enables pharmaceutical companies to achieve efficient route planning, reduce transportation time, and improve overall supply chain efficiency.
- Ensures temperature-sensitive drugs are transported under optimal conditions, maintaining product integrity throughout the journey
Intelligent Routing and Transportation Logistics
- By analyzing vast amounts of data, including supplier performance, weather patterns, regulatory changes, and market dynamics, AI algorithms can anticipate disruptions, quality issues, or delays
- Allows companies to take preventive measures, such as alternative sourcing, early intervention, or adjusting production schedules, minimizing the impact on patient care.
Predictive Analytics for Risk Management
