DISTRIBUTION AND PROMOTION

CHANNELs OF DISTRIBUTION

 Channel of distribution ( marketing channel)

- A sequence of marketing organizations that directs a product from producer to ultimate
user
 Middleman (marketing intermediary)
- A marketing organization that links a producer and user within a marketing channel:
o Merchant middleman: takes title to products by buying them
o Functional middleman: helps in the transfer of ownership f products but doesn’t
take title to the products
o Retailer: buys from the producer or other middlemen and sells to consumers
o Wholesaler middleman: sells products to other firms

CHANNELS FOR CONSUMER PRODUCTS

1. Producer to consumer ( direct channel)

- No intermediaries
- Used by all services and by few consumer goods
- Producers can control quality and price, do not have to pay for intermediaries, and can
be close to their customers
2. Producer to retailer to consumer
- Producers sell directly to retailers when retailers (Walmart) can buy in large quantities
- Most often used for bulky products for which additional handling would increase selling
costs, and for perishable or high fashion products that must reach consumers quickly
3. Producer to wholesaler to retailer to consumer
- Traditional channel
- Used when producers products carried out by s many retailers that the producer cannot
deal with them all
4. Producer to agent to wholesaler to retailer to consumer
- Agent: functional middleman that do not take title to products and are compensated by
commissions paid to producers
- Often used for inexpensive, f requently purchased items, for seasonal products and by
producers that dont have their own sales forces

 A manufacturer may use multiple channels

- To reach diff market segments
o When the same product is sold to consumers and bus
- To increase sales or capture a larger market scale

CHANNELS FOR BUSINESS PRODUCTS

1. Producer to business user

 - Usually used for heavy machinery, airplanes, major equipment
- Allows the producer to provide expert and timely services to customers

LEVELS OF MARKET COVERAGE

 Intensity of market coverage

1. Intensive distribution
- The use of all available outlets for a product to saturate the market
2. Selective distribution
- The use of only a portion of the available outlets for a product in each geographic area
3. Exclusive distribution
- The use of only single retail outlet for a product in a larger geographic area

WHOLESALERS

 Justifications for marketing intermediaries

- Intermediaries perform essential marketing services
- Manufacturers would be burdened with additional record keeping and maintaining
contact with number of retailers
- Costs for distribution would not decrease and could possibly increase due to the
marketing inefficiencies of producers

 Efficiency provided by intermediary

 CATEGORIES OF IN STORE RETAILERS

1. Independent retailer
- A firm that operates only 1 retail outlet
2. Chain retailer
- A company that operates more than 1 retail outlet
3. Department store:
- Retail stroe that:
o Different sections under one roof
o Sells at least home furnishing,appliances,family apparel and household linens
and dry goods, each in a different part of the store
4. Discount store
- A self – service, general-merchandise outlet that sells products at lower than usual
prices
5. Warehouse showroom
- A retail facility in large,low-cost building with large on-premises inventories and minimal
servie
- CTM?
6. Convenience store
- A small food store that sells a limited variety of products but remains open well beyond
normal bus hours
7. Supermarket
- A large self service store that sells primarily food and household products
8. Superstore
- A large retail store that carries not only food and nonfood products ordinarily food in
supermarkets but also additional product lines
9. Traditional speciality store
- A store that carries a narrow product mix with deep product lines
10. Category killer
- A very large speciality store that concentrates on a single product line and competes on
the basis of low prices and product availability

TYPES OF NON STORE RETAILING

 A type of retailing wherby consumers purchase products without visiting store

1. Direct selling
- The marketing products to consumers throuh fact to face sales presentations at home or
in workplace
2. Direct marketing
- The use of telephone, internet, non personal media to introduce products to customers,
who can then purchase them via mail, telephone or internet
3. Catalog marketing
 - An organisation provides a catalog from which customers make selections and place
orders by mail, telephone, internet
4. Direct-response marketing
- A seller advertises a product and makes it available, usually for a short period of time,
through mail, telephone or online orders
5. Telemarketing
- The performance of marketing – related act by telephone
6. Television home shopping
- Products are presented to television viewers, who can buy them by calling a toll-free
numnber and paying by credit card
7. Online retailing
- Makes products avaiable to buyers through computer connections
8. Automatic vending
- The use of machines to dispense products

SHPPING CENTRES

1. Lifestyle
2. Neighbourhood
3. Community
4. Regional

PHYSICAL DISTRIBUTION ( pages 375-377 not prescribed)

PRMOTIOM

WHAT IS INTEGRATED MARKETING COMMUNICATIONS?

 Coordination of promotion efforts to ensure max informational and persuasive impact on

customers
 Results in a consistent message to customers, long-term customer relationships and the efficient
use of promotional resources
- Mass media advertising has given way to targeted promotional tools ( cable tv, internet)
- Overall cost of maerketing communications has risen significantly, pressuring managers
to make the most efficient use of marketing resources

INTEGRATED MARKETING COMMUNICATION (IMC)

THE ROLE OF PROMOTIOM

 Promotion
- Commonly the object of 2 misconceptions
1. Promotional act make up the entire field of marketing
2. Promotional act are unnecessary and cause higher prices
 Role of promotion
- To facilitate exchanges directly / indirectly by informing individuals,groups,organisations
and influencing them to accept a frims products or to have more positive feelings about
the firm
o Convey product and service info directly to target market segments
o Provide info to interest groups, regulatory agencies,investors and general public
- To maintain positive relationships between company and various groups in marketing
enviro

THE PROMOTION MIX: AN OVERVIEW

 The particular combo of promotion methods a frim uses to reach a target market
1. Advertising
- A paid non-personal message communicated to a select audience through mass medium
2. Personal selling
- Personal communication aimed at informing customers and persuading them to buy a
firms products
3. Sales promotion
- The use of act or materials as direct inducements to customers or salespersona
4. Public relations
- Communication act used to create and maintain favourable relations between an org
and various public groups, both internal and external

ADVERTISING

TYPES OF ADVERTISING BY PURPOSE

1. Primary-demand advertising
- Used to increase demand for all brands of a product in a specific indistry
2. Institutional advertising
- Designed to enhance a firms image or build its reputation

ADVERTISING MEDIA

 The forms of communication through which advertising reaches its audience

1. Newspapers
- Relativley inexpensive and timely
 - Short life span
2. Magazines
- Reach specific market segment , more prestigious than newspapers
- High cost
- Lack of timeliness
3. Direct mail
- Most selective
- Effectivness can be measured
- Email
4. Yello pages advertising
- Print and online
- Local
- Purchased for 1 year
5. Out of home advertising
- Short promotional message on billboards,posters,signs and transportation vehicles
- Focuses on geographic area
- Fairly inexpensive
6. Television
- The primary medium for larger firms trying to reach national or regional markets
- Network time, local time
- Sponsering a show
- Spot time
- Product placement
- Infomercials
7. Radio
- Offer selectivily
- Most accessible medium
- Can be less expensive than other media
8. Internet
- Increasingly popular
- Banner and button ads
- Sponsorship ads
- Keyword ads
- Interstitials
9. Social media
- Increasinly popular, more personal connection
- Only reaches person at computer
- So new, uncertainty of best way to use it
- Large time commitment to monitor act

PERSONAL SELLING

 The most adaptable promotion method

 The most expensive promotion method

SALES PROMOTION

 Act or materials that are direct inducements to customers or salespersons

 Sales promotion objectives
- Attract new customers
- Encourage trial of new product
- Invigorate sales of mature brand
- Boost sales to current customers
- Reinforce advertising
- Increase traffic in retail stores
- Steady irregular sales patterns
- Build up reseller inventories
- Neutralize competitive promotional efforts
- Improve shelf space and displays

SALES PROMOTION METHODS

1. Rebate
- A return of part of purchase price of product
2. Coupon
- Reduces retail price of item by stated amount at time of purchase
3. Sample
- Free product given to customers to encpurage trial and purchase
4. Premium
- Gift a proucer offers to customer in return for buying product
5. Frequent – user incentives
- Program that rewards customers who engage in repeat purchases
6. Point of purchase displays
- Promotional material in retail store designed to infrom customers and encourage
purchases
7. Trade shows
- Industry-wide exhibits at which many sellers display their products
8. Buying allowance
- Temp price reduction to resellers for purchasing specified quantities of product
9. Cooperative advertising
- Manufacturer agrees to pay certain amount of retailers media cost for advertising the
manufacturers product

PUBLIC RELATIONS

 A broad set of communication act used to create and maintain favourable relationships between
an org and various groups of people both internal and external
 - Customers, employees,stockholders,suppliers,educators,the media, gov officials, society
in general
 Types of public relations tools
1. Written and spoken communications
- Brouchers,newsletters,company magazines,speeches
2. Event sponsorship
- Special events such as concerts and charity functions that the firm underwrited wholly
or partially
 Publicity
- Communication in news-story form about an orgm its products or both
1. News release
2. Feature article
3. Captioned foto
4. Press conference