Sustainability In The Value Chain

Question 1

Marketing channels (2)

Answer 1

• a marketing channel is the means whereby goods, services, and value move between producers and consumers or between buyers and seller.
• marketing channel is made up of firms, such as manufacturers, wholesalers, agents, brokers and retailers, all working together to deliver products and services to customers.

Question 2

3 flows in the value chain

Answer 2

1) products - physical items such as raw materials and finished goods.
2) data - information such as the number of items ordered, customer requirements and feedback.
3) money - refers to payments for supplies, reseller, or customer payments for finished goods and other money movements between participants.

Question 3

Services and value chains (1)

Answer 3

• service businesses face the same supply chain challenges as those who manage tangible goods.

Question 4

From value chains to value circles (3)

- linear flows and waste

Answer 4

• waste of some kind is generated at every link in the value chain.
• if managed properly, waste can be eliminated or converted into a source of revenue.
  E.g. By switching to pallets made of corrugated cardboard or recycled plastic, companies can be spared much of the expense and waste associated with wood.

Question 5

The cradle to cradle philosophy (3)

Answer 5

• all industrial waste can and should be eliminated by making sure that all of it either serves as biodegradable nutrients for natural systems or is reclaimed for reuse in human technological systems.
• helps companies design products that absorbed harmlessly by nature or reintroduced to the technosphere through recycling.
• cradle to cradle manufacturers produce products with renewable energy, use water efficiently and treat people responsibly.

Question 6

Logistics (3)

Answer 6

• marketers balancing act: being responsive to customers needs while still meeting internal financial targets.
• the organisations approach to social responsibility
• cost constraints and the marketers logistics budget.

Question 7

Logistics strategy (2)

Answer 7

• an explanation of the balance of total costs versus responsiveness.
• an indication of how logistics functions will support other marketing decisions.

Question 8

Types of channel functions (4)

Answer 8

• matching volume, amount or offer to customer needs.
• providing intermediaries and customers with product and market information.
• contacting and negotiating with customers to maintain relationships and complete sales.
• transporting and storing products prior to purchase.

Question 9

Decisions regarding channel functions (3)

Answer 9

• determining which functions are best handled by which member of the value chain.
• determining who then channel intermediary should be.
• determining the compensation for the intermediary.

Question 10

Channel levels (2)

Answer 10

• each channel level adds value in some way.
• basic channel configuration:
  > zero level: direct linking of the seller to the buyer.
  > one level: the seller works with a single type of intermediary.
  > multiple level: the seller works with two or three levels of distribution partners.

Question 11

Reverse channel (4)

Answer 11

• to return products for exchange, repair or recycling.
• can be used to build relationships with customers and the community.
• must take into consideration the laws and regulations that may govern their reverse channel strategy.
• can also represent profit opportunities for enterprising companies.

Question 12

Channel members (5)

Answer 12

Key considerations include:

• customer needs and habits.
• financial considerations.
• products life cycle.
• products positioning.
• the target segment.

Question 13

Distribution intensity (3)

Answer 13

1) intensive distribution - in many outlets for maximum market coverage. E.g. Food items bought on a daily/weekly basis.
2) selective distribution - in a number of selected outlets. E.g. Clothing, electronics.
3) exclusive distribution - in a few outlets for exclusivity within each market. E.g. Prestige brands.

Question 14

Developing sustainable channel operations (4)

Answer 14

• sustainable distribution: emphasises efficiency and carbon neutrality, and it tends to prioritise local production wherever possible.
• 3 ways
  1) greener facilities: distribution functions such as storage, bulk breaking, and assortment, and the management of these functions, occur in buildings ranging from factories to warehouses to distribution centres to retail stores.

2) greener transportation: potential improvement lies in the routing of delivery trucks, e.g. Drivers learn to minimise the number of left turns in s route and to turn off trucks during deliveries, both of which reduce idling.
3) shorter channels: disintermediation - entails reducing the number or roles of intermediaries in a marketing channel.

Question 15

Sustainability in retailing (2)

Answer 15

• retailers can play many roles in moving towards a more sustainable society.
• 3 ways to influence:
  1) influencing suppliers
  2) educating customers
  3) taking back recyclables

Question 16

Influencing suppliers (1)

Answer 16

• retailers are, by their nature, customers for all their upstream channel members.

Question 17

Educating customers (3)

Answer 17

• one of the most important ways retailers can help bring about a more sustainable society is by educating their customers about the advantages of buying more sustainable goods and services.
• merchandising: the processes and techniques used by retailers to communicate with customers.
• through merchandising, retailers can stress greater value in a number of ways. E.g. They can emphasise the long term savings provided by products that use less energy or are higher in quality and durability.

Question 18

Taking back recyclables (2)

Answer 18

• retail stores can provide ideal sites for consumers to returns used products and packaging, thus keep them in the value circle.
• retailers can consolidate recyclables into quantities that have commercial value. E.g. Staples credits customers $3 each for retuning used ink and toner cartridges.

Question 19

Value chain (5)

Answer 19

• a chain of activity and institutions that add value to a product on its way from manufacturing to an end consumer
• each link adds some kind of value to the products that move through the channel.
• these can be tangible benefits, or services, such as facilitating its distribution.
• inbound: inputs needed for creating the goods and services.
• outbound: making the product or service available.