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Dr. Franck VIGNERON CSUN – College of Business & Economics. Review for Quiz 3 Chapters 12, 13 14,15, part of 16 and 18. INTRODUCTION TO MARKETING MANAGEMENT. 1. Chapter 13 Distribution Channels and Logistics Management. 2. What is a Distribution Channel?.

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Introduction to marketing management

Dr. Franck VIGNERON

CSUN – College of Business & Economics

Review for Quiz 3

Chapters

12, 13 14,15, part of 16 and 18

INTRODUCTION TO MARKETING MANAGEMENT

1


Chapter 13Distribution Channels and Logistics Management

2


What is a distribution channel
What is a Distribution Channel?

  • A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user.

3


Distribution channel functions
Distribution Channel Functions

Physical

Distribution

Negotiation

Risk Taking

Promotion

Financing

Matching

Contact

Information

Members of the marketing channel perform many key functions.

They are:

4


Number of channel levels
Number of Channel Levels

W

R

R

W

M

M

M

M

R

C

C

C

C

J

Channel Level

= Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer.

Channel 1

Direct Channel

Indirect Channel

Channel 2

Channel 3

Channel 4

5


Channel behavior conflict
Channel Behavior & Conflict

  • For the channel to perform well, each channel member’s role must be specified and conflict must be managed.

  • When this doesn’t happen, conflict occurs:

    • Horizontal Conflict occurs among firms at the same level of the channel, i.e retailer to retailer.

    • Vertical Conflict occurs between different levels of the same channel, i.e. wholesaler to retailer.

6


Conventional marketing channel vs a vertical marketing system
Conventional Marketing Channel Vs. a Vertical Marketing System

Retailer

Wholesaler

Manufacturer

Consumer

Consumer

Conventional

Marketing

Channel

Vertical

Marketing

System

Manufacturer

Retailer

Wholesaler

7


Types of vertical marketing systems
Types of Vertical Marketing Systems System

Vertical Marketing

Systems (VMS)

Contractual

VMS

Corporate

VMS

Manufacturer-

Sponsored Wholesaler

Franchise System

Manufacturer-

Sponsored Retailer

Franchise System

Administered

VMS

Franchise

Organizations

Service-Firm-

Sponsored

Franchise System

Retailer

Cooperatives

Wholesaler Sponsored

Voluntary Chain

40% of Retail Sales

Ford + dealers

Coca-Cola

Hertz/Avis, McDo/Bking, H/R Inn

8


Innovations in marketing systems

  • Hybrid Marketing System System

  • A Single Firm Sets Up Two or More Marketing Channels to Reach One or More Customer Segments.

  • Example:

  • Retailers, Catalogs, and Sales Force

Innovations in Marketing Systems

  • Horizontal Marketing System

  • Two or More Companies at One Channel Level Join Together to Follow a New Marketing Opportunity.

  • Example:

  • Banks in Grocery Stores

  • Competitors helping each other

  • E.g., Outside US Néstlé selling General Mills cereals

9


Channel design decisions
Channel Design Decisions System

Selective

Distribution

Exclusive

Distribution

Intensive

Distribution

2. Setting Channel Objectives & Constraints

3. Identifying Major Alternatives

1. Analyzing Consumer Service Needs

5. Designing International Distribution Channels

4. Evaluating the Major Alternatives

Fast Moving C. G.

Maytag

Rolls-Royce

Review Economic, Control, and Adaptive Criteria

10


Push and pull strategies
Push and Pull Strategies System

Customers

Wholesalers

Wholesalers

Customers

Producer

Producer

Retailers

Retailers

Customers

Wholesalers

Producer

Retailers

Push Strategy

Pull Strategy

Push/Pull Strategies

Advertising and Promotion

11

Distribution Strategies


Major logistics functions
Major Logistics Functions System

Warehousing

Storage

Distribution

Automated

Costs

Minimize Costs of

Attaining Logistics

Objectives

Inventory

When to order

How much to order

Just-in-time

Order Processing

Received

Processed

Shipped

Logistics

Functions

Transportation Rail, Truck, Water, Pipeline, Air, Intermodal

12


Marketing logistics
Marketing Logistics System

  • Involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at profit.

  • INBOUND + OUTBOUND = Market Logistics

  • Supply Chain + value chain management

13


Transportation modes

Truck System

Flexible in routing & time schedules, efficient

for short-hauls of high value goods

Pipeline

Ship petroleum, natural gas, and chemicals

from sources to markets

Water

Low cost for shipping bulky, low-value,

non perishable goods, slowest form

Rail

Nation’s largest carrier, cost-effective

for shipping bulk products, piggyback

Transportation Modes

Air

High cost, ideal when speed is needed or

distance markets have to be reached

14


Choosing transportation modes
Choosing Transportation Modes System

Checklist for Choosing

Transportation Modes

1. Speed (door-to-door time)

2. Dependability (meet schedules)

3. Availability (area served)

4. Costs (per ton-distance)

(ability to handle various products)

5. Flexibility

15


Introduction to marketing management1

Dr. Franck VIGNERON System

CSUN – School of Business & Economics

Chapter 14Distribution Strategies

INTRODUCTION TO MARKETING MANAGEMENT

16


What is retailing
What is Retailing? System

Retailing

Includes all the activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal, Nonbusiness Use.

Retailers - those firms engaged primarily in wholesaling activity.

17


Product assortment and services decisions

  • Product Assortment System

  • Width and Depth of Assortment

  • Quality of Products

  • Product Differentiation Strategies

Product Assortment and Services Decisions

Services Mix

Key Tool of Nonprice Competition

for Setting One Store Apart From

Another

  • Store’s Atmosphere

  • Physical Layout

  • “Feel” That Suits the Target Market

  • and Moves Customers to Buy

18


Classification of retailing

Retail Organizations System

Independent, Corporate, or Contractual

Ownership Organization

Classification of Retailing

Relative Prices

Pricing Structure that is Used

by the Retailer

Amount of Service

Self-Service, Limited-Service and

Full-Service Retailer

Product Line

Depth/Length and Breadth of the Product

Assortment

19


Breadth vs depth of merchandise lines
Breadth vs. Depth of Merchandise Lines System

Amana

refrigerator

Sony TV sets

JVC videocassette

recorders

General Electric

dishwashers

Sharp microwave

ovens

Nike running shoes

Florsheim dress

shoes

Top Sider boat

shoes

Adidas tennis shoes

Classical

Rock

Jazz

Country Western

Suits

Ties

Jackets

Overcoats

Socks

Shirts

Breadth: Number of different product lines

Shoes Appliances CDs Men’s Clothing

Depth:

Number of

items within

each product

line

20


Classification of retailing product line

Wide Variety of Food, Laundry, & Household Products i.e. Kroger

Changing Collection of Higher-Quality Goods at a Reduced Price i.e. T.J. Maxx

Standard Merchandise at Lower Prices

i.e. Wal-Mart

Large Assortment of Routinely Purchased Food & Nonfood Products i.e. Toys R Us

Limited Line of High-Turnover Convenience Goods i.e. 7-Eleven

Narrow Product Line, Deep Assortment i.e. The Limited or Athlete’s Foot

Wide Variety of Product Lines i.e. Clothing, Home Furnishings, Saks Fifth Avenue

Limited Selection of Brand-Name Grocery Items, Appliances, Etc. i.e. Sam’s Club

Classification of Retailing: Product Line

Convenience Stores

Department Stores

Off-Price Retailers

Warehouse Clubs

Specialty Stores

Discount Stores

Superstores

Supermarkets

E.g., + What is an Hypermarket?

Store Description

21


What is wholesaling
What is Wholesaling? Kroger

Wholesaling

  • All the activities involved in selling goods and services to those buying for resale or business use.

  • Wholesaler - those firms engaged primarily in wholesaling activity.

  • Wholesalers buy mostly from producers and sell mostly to:

  • Retailers,

  • Industrial consumers, and

  • Other wholesalers.

22


Why are wholesalers used
Why are Wholesalers Used? Kroger

Management

Services & Advice

Selling and

Promoting

Buying and

Assortment Building

Market

Information

Transportation

Bulk Breaking

Warehousing

Risk Bearing

Financing

Wholesaler

Functions

Wholesalers are Often Better at Performing One or More of the Following Channel Functions:

23


Types of wholesalers
Types of Wholesalers Kroger

Merchant Wholesaler

Independently Owned

Business that Takes Title to the

Merchandise it Handles.

Manufacturers’ Sales Branches and Offices

Wholesaling by Sellers or Buyers Themselves

Rather Than Through

Independent

Wholesalers.

Brokers/ Agents

They Don’t Take Title to

the Goods, and They

Perform Only a Few

Functions.

24


Trends in wholesaling
Trends in Wholesaling Kroger

Consolidation within the Industry is Reducing # of Wholsalers

Wholesalers Will Continue to Increase the Services Provided

Distinction Between Large Retailers and Wholesalers Blurs

Wholesalers Are Beginning to Go Global

25


Chapter 15
Chapter 15 Kroger

  • Integrated Marketing Communication Strategy

26


The promotional mix
The Promotional Mix Kroger

4P’s

PR

Direct MKG

Advertising

Personal Selling

Sales

Promotion

Product

Promotion

Place

(Distribution)

Price

Place

27

Advertising Strategies


Setting advertising objectives
Setting Advertising Objectives Kroger

Comparison Advertising

Compares One Brand to

Another

i.e. Avis vs. Hertz

Reminder Advertising

Keeps Consumers Thinking

About a Product

i.e. Coca-Cola

Informative Advertising

Inform Consumers or

Build Primary Demand

i.e CD Players

Persuasive Advertising

Build Selective Demand

i.e Sony CD Players

Advertising Objective

Specific Communication Task

Accomplished with a Specific

Target Audience

During a Specific Period of Time

28


Responds Appropriately? Kroger

Miscomprehends?

Sender

(Source)

Receiver

(Consumer)

Channel

(Medium)

Message

Figure 9.3 Comprehensive Communication Model

Commercial

Non-Profit

Individual

Formal vs. Informal

Verbal vs. Nonverbal

1-sided vs. 2-sided

Factual vs. Emotional

Selective Exposure

Individuals

Target Audience

Intermediary Audience

Unintended Audiences

Mediated by: Involvement

Mood

Experience

Personal Charac.

Encodes

Decodes

Symbols

Pictures

Words

Images

Paid vs. Unpaid

Print, Broadcast, Electronic

Personal vs. Impersonal

Yes

No

Yes

Pretests to Ensure Message Will be Received

Posttests to Ensure Message Was Received

No

Feedback

29


Steps in developing effective communication
Steps in Developing Effective Communication Kroger

Awareness

Knowledge

Conviction

Liking

Purchase

Preference

Step 1. Identifying the Target Audience

Step 2. Determining the Communication Objectives

Buyer Readiness Stages

30


Steps in developing effective communication1

Message Structure Kroger

Draw Conclusions

Argument Type

Argument Order

Message Content

Rational Appeals

Emotional Appeals

Moral Appeals

Message Format

Headline, Illustration,

Copy, & Color

Body Language

Interest

Action

Attention

Steps in Developing Effective Communication

Desire

Step 3. Designing a Message

  • AIDA model.

  • 1). Get attention 2). Hold interest

  • 3). Arouse desire 4). Obtain action

31


Appeals

Rational appeal Kroger -

a focus toward the consumer’s practical utility oriented needs

Emotional appeal -

a focus on psychological rather than utility needs

Appeals

Ego

Oriented

Humor

Fear

Sex

Comparative

(all appeals can be positive or negative

and should be meaningful, distinctive,

and believable to be effective)

Appeal - the creative attempt to motivate

consumers toward some form of activity,

or to influence attitudes toward a product or service

32

+ Morale Appeal:Social causes & Human Rights

Advertising Strategies


Structure format
Structure & Format Kroger

  • The marketing communicator needs a strong structure and format for the message.

  • 1). Three structure issues must be addressed:

    • a). Whether to draw a conclusion or leave it to the audience.

    • b). Whether to present a one-sided argument or a two-sided argument.

    • c). Whether to present the strongest arguments first or last.

33


Structure format continuous
Structure & Format Kroger(continuous)

  • 2). The message format decides on the headline, illustration, copy, and color.

  • 3). To attract attention the advertiser can use:

    • a). Novelty and contrast.

    • b). Eye-catching pictures and headlines.

    • c). Distinctive formats.

    • d). Message size and position.

    • e). Color, shape, and movement.

34


Steps in developing effective communication2

Personal Communication Kroger

Channels

Nonpersonal Communication

Channels

Steps in Developing Effective Communication

Step 4. Choosing Media

35


Issues in credibility
Issues in Credibility Kroger

  • Credibility of Informal Sources

    • E.g., Word-of-mouth

  • Credibility of Formal Sources

    • Differ. Between for profit vs nfp Org.

  • Credibility of Spokespersons and Endorsers

    • Importance of perceived competency and expertise

  • Message Credibility

    • Past experience with organization


SPONSORING Kroger

VERSUS

+

FOR-PROFIT Org.

VERSUS

-

ADVERTISING

-

NOT FOR PROFIT Org.

+

CREDIBILITY OF THE MEDIA CHANNELS

CREDIBILITY OF THE SOURCES


FOR-PROFIT Org. Kroger

NOT FOR PROFIT Org.

SPONSORING

+

++

VERSUS

ADVERTISING

--

-

VERSUS

CREDIBILITY OF THE MEDIA CHANNELS IN RELATION WITH THE SOURCES


Sales Effects Kroger

Is the Ad Increasing Sales?

Communication Effects

Is the Ad Communicating Well?

Advertising Program Evaluation

Campaign Evaluation


Setting the total promotion budget
Setting the Total Promotion Budget Kroger

Objective-and-Task

Based on Determining

Objectives & Tasks, Then

Estimating Costs

Percentage of Sales

Based on a Certain Percentage

of Current or Forecasted Sales

Competitive-Parity

Based on the Competitor’s

Promotion Budget

Affordable

Based on What the

Company Can Afford

One of the Hardest Marketing Decisions Facing a Company is How Much to Spend on Promotion.

40


Dr franck vigneron

Sales Promotion + PR Kroger

+ Advertising

Dr. Franck Vigneron

Chapter 16

41


What is sales promotion
What is Sales Promotion ? Kroger

  • Sales Promotion is a Mass Communication Technique That Offers Short-Term Incentives to Encourage Purchase or Sales of a Product or Service.

  • Offers Reasons to Buy Now.

  • Stimulate earlier or stronger market response.

42


Major consumer sales promotion tools 1

Savings when purchasing specified products Kroger

Reduced prices marked on the label or package

Goods offered free or low cost as an incentive to buy a product

Articles imprinted with an advertiser’s name given as gifts

Advertising

Specialties

Major Consumer Sales Promotion Tools/1

Price Packs

Premiums

Coupons

Sample

Cash Refunds

Trial amount of a product

Refund of part of the purchase price

43


Major consumer sales promotion tools 2
Major Consumer Sales Promotion Tools/2 Kroger

Consumers submit their names for a drawing

Cash or other rewards for the use of a certain product

Displays and demonstrations that take place at the point of sale

Presents consumers with something every time they buy

Sweepstakes

Patronage Rewards

Point-of-Purchase

Game

Contests

Consumers submit an entry to be judged

44


Major trade sales promotion tools 1

Persuade Retailers or Kroger

Wholesalers to Carry a Brand

Promote a Brand in

Advertising

Major Trade Sales Promotion Tools/1

Push a Brand to Consumers

Give a Brand Shelf Space

Trade-Promotion Objectives

45


Major trade sales promotion tools 2
Major Trade Sales Promotion Tools/2 Kroger

Discounts

Trade-Promotion Tools

a straight reduction in price on purchases during a stated period of time. Can be called price-off, off-invoice, or off-list.

46


Major trade sales promotion tools 3
Major Trade Sales Promotion Tools/3 Kroger

Allowances

  • Promotional money paid by manufacturers to retailers who agree to feature the manufacturer’s products in some way. Forms include:

  • a). An advertising allowance compensates retailers for advertising a product.

  • b). A display allowance compensates them for using displays.

  • c). Manufacturers may offer free goods, which are extra cases of merchandise, to resellers who buy a certain quantity or who feature a certain flavor or size.

  • d). Manufacturers may give retailers free specialty advertising items that carry the company’s name (such as pens).

Trade-Promotion Tools

47


Major business sales promotion tools

Business-Promotion Tools Kroger

Major Business Sales Promotion Tools

Generate Business Leads

Motivate Salespeople

Reward Customers

Stimulate Purchases

Sales Contests

Trade Shows

Conventions

Business-Promotion Objectives

48


Developing the sales promotion program
Developing the Sales Promotion Program Kroger

Determine How to Promote and

Distribute the Promotion Program

Determine the Length of the Program

Decide on the Size of the Incentive

Set Conditions for Participation

Evaluate the Program

49


What is public relations
What is Public Relations? Kroger

Public Relations Involves Building Good Relations With the Company’s Various Publics by Obtaining Favorable Publicity, Building Up a Good Corporate Image, and Handling or Heading Off Unfavorable Rumors, Stories, and Events.

50


Major public relations functions

Public Relations Departments May Perform Any of All of the Following Functions:

Major Public Relations Functions

Investor Relations

Public Affairs

Lobbying

Press Relations

Development

Product Publicity

51


Major public relations tools
Major Public Relations Tools Following Functions:

News

Web Site

Speeches

Public Service Activities

Special Events

Corporate Identity Materials

Written Materials

Audiovisual Materials

52


Major public relations decisions
Major Public Relations Decisions Following Functions:

Choosing the Public Relations Messages

and Vehicles

Evaluating Public Relations Results

Setting Public Relations Objectives

Implementing the Public Relations Plan

53


What is advertising
What is Advertising? Following Functions:

Advertising is Any Paid Form of Nonpersonal Presentation and Promotion of Ideas, Goods, or Services by an Identified Sponsor.

54


Media selection
Media Selection Following Functions:

  • Deciding on reach, frequency, and impact.

  • a).Reach is the percentage of people in the target market exposed to an ad campaign during a given period.

  • b).Frequency is the number of times the average person in the target market is exposed to an advertising message during a given period.

  • c).Media impact is the qualitative value of an exposure through a given medium.

55


6 major advertising media
6 major advertising media Following Functions:

  • Television

  • Radio

  • Magazines

  • Newspaper

  • Internet

  • And Outdoor (e.g., billboards)

56


Copy and Message Direction Following Functions:

Motivational

Source

Motivation = Association with Product Universe

Motivation = Product Performance

Perf. Is representation of product

Perf. is + than representation product

Copy of Message

Centered on Psyco

-socio of Product

Copy of Message

Centered on Product

Copy of Message

Centered on Results

from Product

1. Message on Product

2. Message on Resultats

3. Message on Universe

57


Chapter 18
Chapter 18 Following Functions:

  • Competitive Strategies: Attracting, Retaining, and Growing Customers

58


Customer relationship marketing
Customer Relationship Marketing Following Functions:

  • Traditional marketing theory and practice have focused on attracting new customers rather than retaining existing ones.

  • 1). The move today, however, is toward relationship marketing--creating,maintaining, and enhancing strong relationships with customers and other stakeholders.

  • 2). Beyond designing strategies to attract new customers and create transactions with them, companies are going all out to retain current customers and build profitable, long-term relationshipswith them.

  • 3). This new view is that marketing is the science and art of finding, retaining, and growing profitable customers.

59


PRODUCTS Following Functions:

NEEDS

STAGES

Adapt and

Deliver

the Products

to The Right

Target

Identify

The needs

to Satisfy

Retain Customer

By Maintaining Satisfaction

Create the Product

Satisfaying the Needs

60


Customer delivered value
Customer Delivered Value Following Functions:

61


Customer satisfaction
Customer Satisfaction Following Functions:

Product Falls Short of Expectations

Customer is Dissatisfied

Product Matches Expectations

Customer is Satisfied

Product Exceeds Expectations

Customer is Highly Satisfied or Delighted!

Expectations are Based on Customer’s Past Buying Experiences, the Opinions of Friends, & Marketer and Competitor Information and Promises.

62


Steps in analyzing competitors
Steps in Analyzing Competitors Following Functions:

= BENCHMARKING

Identifying the

company’s

competitors

Assessing competitor’s

objectives, strategies,

strengths and weaknesses,

and reaction patterns

Selecting which

competitors to

attack or avoid

63


Basic competitive strategies
Basic Competitive Strategies Following Functions:

Middle of

the Road

Overall Cost

Leadership

Focus

Differentiation

64


Competitive strategies value disciplines
Competitive Strategies: Value Disciplines Following Functions:

Operational Excellence

Alaska Airlines

Product Leadership

intel

Customer Intimacy

Ikea

Companies Gain Leadership Positions by Delivering Superior Value to their Customers Through These Strategies:

65


Competitive marketing strategies

Market Nicher Following Functions:

Market Challenger

Competitive Marketing Strategies

Market Follower

Market Leader

Firms Competing in a Given Target Market Differ in their Objectives and Resources so May Choose the Following Forms:

66


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