Marketing Management 3

MARKETING MANAGEMENT

What are Distribution Channels

Distribution Channels are a set of interdependent firms who facilitate in the process of Distributing / Selling / Promoting products to end users.

Why Distribution Channels

Channel

Create

Price Utility Time Utility Quantity Utility Assortment Utility Possession Utility

HOW CHANNEL MEMBERS ADD VALUE Physical possession Negotiating Financing Risk Risk Taking Taking

Ownership Promotion Risking Ordering Payment

Information Information

Financing Financing

Promotion Promotion

Physical Physical Distribution Distribution

Contact Contact

Negotiation Negotiation

Matching Matching

CHANNEL LEVELS 0-level channel Manufacturer Manufacturer

Consumer Consumer

1-level channel Manufacturer Manufacturer

Retailer Retailer

→ Consumer Consumer

Retailer Retailer

→ Consumer Consumer

Retailer Retailer

→ Consumer Consumer

2-level channel Mfg Mfg

→ Wholesaler Wholesaler

3-level channel Mfg Mfg

→ Wholesaler Wholesaler→

Jobber Jobber

→

DUAL DISTRIBUTION Dual Distribution is the use of Two or More marketing channels to distribute the same product to the same Target Market Eg: HLL using Wholesaler / Retailer Channel & also Multi Level Marketing

Channel-Design Decisions

Analyzing Consumers’ Desired Service Output Levels Establish Objectives Type / Number of Intermediaries Evaluating Major Channel Alternatives

Service Out put Demand Spatial convenience Waiting time Assortment Bulk Breaking Service backup

Channel Objectives Needs to be in terms of targeted customer service output levels Channel Objectives vary with Product characteristics Perishables – Direct Marketing Products with Installation –Direct / company franchisee

Channel-Type Decisions Intermediary type Merchants Buy, take title, and resell merchandise Agents Find customers, negotiate, do not take title to merchandise Facilitators Aid in distribution, do not negotiate or take title to merchandise

Number of Intermediaries

Intensive

Selective Channel Distribution Strategies

Exclusive

Number of Intermediaries Exclusive distribution : Severely limited distribution Selective distribution : Some intermediaries willing to carry good Intensive distribution : Product in as many outlets as possible.

Criteria for Channel Alternative Evaluation

Economic

Control Adaptive

Training

Selection Motivation

Evaluation

Modification

FEEDBACK FEEDBACK FEEDBACK FEEDBACK

Channel Development Process

Channel Dynamics Channel systems are constantly evolving and developing Vertical Marketing Systems Horizontal Marketing Systems Multi channel Marketing Systems

Vertical Marketing System Comprises the manufacturer ,wholesaler ,retailer acting as unified system where in one channel member controls the entire channel

Horizontal Marketing System Two or more unrelated companies put together programs to exploit an emerging marketing opportunity

Channel Conflict Types of conflict Vertical -Between different levels within the channel Horizontal – Between members at the same level Multi channel – Manufacturer establishes 2 or more channels to sell in the same market

Causes of conflict Goal conflict Perception conflict Role Conflict - Unclear roles and rights

Managing Channel Conflict

Mediation Arbitration Diplomacy Exchange People Between Channel Levels

TRANSPORTATION

Air

Pipeline

Rail

Transportation Transportation Modes Modes

Water

Truck

Choosing Transportation Modes 1. Speed 2. Dependability 3. Capability 4. Cost 5. Availability

PROMOTION

Integrated Marketing Communication (IMC) What is IMC Advertising Sales Promo. Direct Marketing Personal Selling Public Relation Objective : Clear Consistent Compelling Message Need for IMC

Developing Promotion Mix 1. Identify Target Audience 2. Determine Objectives -Awareness, Knowledge, Liking... 3. Design Message - Content , Structure ,Format 4. Select Channel - Personal Vs Non Personal channel 5. Establish budgets

- type of product ,plc , competition…

6. Promotion Mix

- Advertising , Sales Promo ,Selling

7. Measure Results - Sales , Message effectiveness 8. Manage Total communication Process

Advertising Paid form of Non Personal Communication by an identifiable sponsor to a target audience through media

5 M’s Mission Money Message Media Measurement

Objectives / Mission • AIDA ( Attention

Interest Desire Action )

• Hierarchy of effects DAGMAR • Compensation principle Inform

Persuade

Remind Reinforce

MONEY / BUDGETS • • • •

Affordable Method Percentage of Sales Competitor Parity Objectives & Tasks

Developing the Advertising Campaign

Message Message Generation Message Execution Style & Format Slice of life Lifestyle : Bacardi Fantasy : VIP Frenchie ad Mood or image : king fisher Musical: Airtel Personality symbol: Creates a character that personifies the product. FIDO DIDO Scientific evidence: This style is common in the over-the-counter drug category. Testimonial evidence: expert source endorsing the product. Example: Sunsilk, Hair expert Coleen

MEDIA Media Decision Reach Frequency Impact Media Types Print : Newspaper Magazine Broadcasting : Television Radio Outdoor : Hoardings Internet : Banners Pop Up

Print Ad Components Picture

Headline Copy

Signature

SALES PROMOTION

What is Sales Promotion Short term incentive given to a customer to buy the product now. Effectiveness of Sales Promotion Promotion alone

sales 100

P

sales

P

P

Advertising then Promotion

150

AP AP AP A

REASONS FOR RAPID GROWTH OF SALES PROMOTIONS • • • • • • • • •

Company – Quick Fix strategy Increasing Competition Customers – More Price Sensitive Immediate Positive Impact On Sales Insistence by Channels Advertising – More Expensive, Less Effective Introducing An Element Of Interest Impulse Buying Is Increasing Excess Stocks

Types of Promotions • • • • • • • • • • • • •

Sampling Coupons Price packs Rebates Continuity programs Contests Sweepstakes Tie-in promotion Financing incentives Special events Premiums Bonus packs Exchange offers

Sales Management

Personal Selling Face to face role played by the sale force with the potential buyers to inform & persuade them to buy the company’s product

Tasks performed by sales personnel • • • • • •

Prospecting Targeting Communicating Selling Servicing Information gathering

Designing Sales Force Sales force objectives Sales force strategy Sales force structure Sales force size Compensation

Managing the Sales Force Recruiting, selecting Training Supervising Motivating Evaluating

Principles of Personal Selling • • • • • • • •

Preparation Approach Diagnosis Solution generation Solution preparation Handling Objection Closing call Follow-up

Public Relations Involves a variety of programs designed to promote or protect a company’s image or its individual products 5 Functions Press Relations – presenting company news Product publicity – sponsoring efforts Corporate communications Lobbying- dealing with government Counseling - advising management about public issues