Class 1-2

Designing and Managing Distribution

Channels

Universityof Jaén
Marketing Management 3
Department of BusinessOrganisation, Marketing and Sociology
Visiting Professor:SergeyYablonsky
syablons@ujaen.es
CONTENT DESCRIPTION
ITEM 0. Intro
ITEM 1. THE DESIGN AND DISTRIBUTION CHANNEL CHOICE
ITEM 2. SPATIAL ORGANIZATION OF COMMERCIAL DISTRIBUTION
ITEM 3. INTERNAL RELATIONS IN THE DISTRIBUTION CHANNEL.
ITEM 4. MERCHANDISIG
ITEM 5. COMMERCIAL COMMUNICATION
ITEM 6. ADVERTISING
ITEM 7. THE PROMOTION OF SALES AND PUBLIC RELATIONS
ITEM 8. DIRECT MARKETING AND PERSONAL SALE
ITEM 9. NEW TRENDS IN COMMUNICATION
CLASSROOM TEACHING SCENARIO
Lectures
Practical activities
Development of 15 practical sessions
Evaluation test Format (face-to-face/
online synchronous or asynchronous
Description Percentage
Written, theoretical and practical exam - 50%
Practical works, cases and test - 50%
INTRO
WHAT IS MARKETING?
• Marketing is the management process involved in identifying,
anticipating and satisfying customer wants profitably.’ (Institute of
Marketing)
• The aim is to know and understand the customer so well that the
product or service sells itself.
• Exchange relationship.
 WHAT IS WHAT MARKETING IS
MARKETING? NOT?
• It is NOT just advertising and selling
• Delivering value through a set of
– these are just two of the marketing
marketing tools functions and often NOT the most
• To specify target customers in important ones.
specific target markets
• It is NOT about ‘telling and selling’
• So that the target group will in fact it is all about satisfying
choose your brand (product, customer needs.
service)
• Marketing is not just selling. It is
• At a cost that gives you a profit. about knowing and understanding
your customer,
THE ACTUAL ROLE OF MARKETING: FIND
CUSTOMER NEEDS AND SATISFY THEM
MARKETING MANAGEMENT BECOMES
MORE AND MORE COMPLEX
Gartner: Digital Marketing Transit Map
 < 5.000 parts > 15.000 parts
Technology ↑ Product complexity and functionality ↑ Marketing ↑
MARKETING PLANNING PROCESS AND KEY
QUESTIONS

Business mission,
vision & values
MARKETING PLANNING PROCESS AND KEY
QUESTIONS

Business mission,
vision & values
MARKETING PLANNING PROCESS AND KEY
QUESTIONS

• Business mission, vision and values:

- Is a statement of the purpose of a company, organization or person, and of its
reason for existing.
- Captures the uniqueness of your company and acts as a base line for quality,
Service and your marketing messages.
- Will attract and comforty our customers, and it will bring inspiration and drive to
your employees.

VIDEO

https://www.youtube.com/watch?v=8wem6FZAucw
Figure 1
Basic Elements of the Strategic Management Process
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
• SWOT analysis:
- Is the systematic analysis of the company‘s internal and external
environments.
a) Internal factors > strengths and weaknesses
Structures, organization, processes, systems

b) External factors > opportunities and threats

Economic, Political/legal, Physical, Social/cultural, Technological,
Ecological
SWOT analysis
SWOT analysis is used in strategic analysis for several key purposes:
1. Strategic Planning: SWOT analysis is a foundational element in strategic planning. It helps organizations identify their strengths to
leverage opportunities, understand weaknesses to address, and recognize external threats to mitigate. By analyzing these factors,
organizations can develop comprehensive strategies that align with their objectives and resources.
2. Decision Making: It aids in decision-making processes by providing a structured overview of the internal and external
environment. This overview helps in evaluating the viability of new projects, initiatives, or strategic shifts, ensuring decisions are
informed by both the organization's capabilities and the market landscape.
3. Competitive Analysis: SWOT is used to assess an organization's competitive position within its industry. By identifying strengths,
an organization can understand its competitive advantages, and by recognizing weaknesses, it can work on areas where it may be
at a disadvantage. Opportunities and threats provide insight into market dynamics and competitive pressures.
4. Problem-Solving: When facing specific challenges or problems, SWOT analysis can help pinpoint the internal and external factors
contributing to the issue. This makes it easier to develop targeted solutions that are realistic and effective, based on the
organization's actual capabilities and the external environment.
5. Goal Setting: By clearly laying out strengths, weaknesses, opportunities, and threats, SWOT analysis helps organizations set
achievable and strategic goals. It ensures that goals are informed by both the positive aspects that can be capitalized on and the
challenges that need to be overcome.
6. Resource Allocation: It assists in prioritizing where resources should be allocated to achieve the best outcomes. Strengths and
opportunities might indicate areas for investment and growth, while weaknesses and threats might highlight areas needing
support or risk management strategies.
7. Market Analysis: SWOT analysis is used to understand the market landscape better. It helps organizations identify trends, potential
markets, and customer needs that match their strengths, as well as external challenges that could impact their market position.
8. Organizational Assessment: Regularly conducting a SWOT analysis helps organizations maintain awareness of their operational
health and strategic direction. It encourages continual reassessment of strategies in light of changing internal dynamics and
external conditions.
In essence, SWOT analysis is a versatile tool used across various contexts within strategic analysis to guide decision-making, planning,
and goal setting by providing a clear picture of an organization's strategic position and the environment in which it operates.
Figure 2
SWOT matrix
What makes a good SWOT?
TESLA
Apple (SWOT analysis)
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
• Marketing strategy (MARKETING PLAN):
Forecasting under conditions of
uncertainty
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
4P: Promotion & Place
4P: Promotion & Place
PROMOTION

VIDEO

https://www.youtube.com/watch?v=BW8WoHP1fQY
PROMOTION
EXERCISE
Choose one company, product or brand…

1) What message and what information will activate customers?

2) How is the promotion to be designed in order to catch attention?
3) When is the best time to promote? Is there seasonality in the
market?
4) How do our competitors do their promotions? And how does that
influence your choice of promotional activity?
PLACE

VIDEO

https://www.youtube.com/watch?v=NrmMk1Myrxc
PLACE EXERCISE

5) Where do buyers look for your productor service?

6) If they look in a store, what kind? A specialist boutique or in a
supermarket, or both? Or online? Or direct, via a catalogue?
7) How can you differentiate from competitors?
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
MARKETING PLANNING PROCESS AND KEY
QUESTIONS
• Marketing controlling:
• Effectiveness: Determine if objectives are fulfilled
• Increase the overall efficiency and to avoid costly mistakes
• Evaluate alternative strategies (extreme: go back to start)
Understanding customers
• The whole marketing concept is built upon the customer. Marketers
must understand the behavior of customers in their buying process.

Who buys? (roles)

What need or problem desire to satisfy or resolve? (motivations)
What are their choice criteria?
Where do they buy ?
When do they buy?
What are they going to use the product for? Etc.
The customer buying decision process

Different roles in a buying process. Marketers must understand who is important.

• Initiator
• Influencer
• Decider
• Buyer
• User
Key environmental
variables
Understanding the target audience
• What are their choice criteria / buying motivations?
• A buying decision is influenced by many factors that marketers
must apply to the marketing mix.
• Technical
• Economic
• Cultural
• Social
• Political
• Personal, psychological
UNIT 1. THE DESIGN AND CHOICE OF THE
DISTRIBUTION CHANNEL
 INDEX
1.1. The commercial distribution: basic concepts (Introduction to distribution)

1.2. Market knowledge. Objectives of commercial distribution

1.3. Development of commercial distribution strategy
1.4. Functions of commercial distribution. Services provided (EACH
POINT IS
to end/final customers A STAGE)
1.5. Selection of distribution channels. Influential factors.
Selection criteria and methods
1.6. Evaluation and control of distribution channels
1.1. The commercial distribution:
Definition
• Set of activities that allow the transfer of products and services
from their final state of production to the acquisition or
consumption (final users).
1.1. The commercial distribution:
Most relevant features
• Strategic variable, modifiable to l/t:
• Use already established distribution channels.
• Use own channels (limited potential market).
• Variable that makes product control difficult on the part
manufacturer:
• The more length, the more difficulty.
• A more power of the producer, less difficulty.
• Variable of (4P) great importance in the final sale price one.
1.1. The commercial distribution:
Intermediaries and add value
• How channel members add value?
Intermediaries increase the amount contacts between producers
and consumers.
 1.1. The commercial distribution:
Main distribution (place) functions
1. Purchase and sale
2. Transportation and production diffusion
3. Fractionation
4. Storage
5. Services
6. Financing
7. Assumption of risks
1.1. The commercial distribution:
Main distribution functions
1. Purchase and sale. Activities:
i on
• Supplier Selection BUYER i at SELLER
ot
• Bid Analysis e g
N
• Establishing contacts and business relationships with suppliers
• Decision moment of purchase and quantity to buy
• Order placement
1.1. The commercial distribution:
Main distribution functions
2. Transportation and production diffusion. Activities:
• Selection of the type of transport (rental or purchase)
• Transport method
• Optimization quantities to transport
• Plotting of optimal routes
• Negotiation
1.1. The commercial distribution:
Main distribution functions
3. Fractionation. Activities:
• Stock handling
• Packaging
• Packing

Wholesaler & Retail &

Consumer
1.1. The commercial distribution:
Main distribution functions
4. Storage: the mission is to have at all times of products
needed to satisfy customer's claim. Do not mean the same as
having many products in the warehouse (cost).
• Terms:
• Reception area - Adequate facilities - Easy entry and exit -
Warehouse computerization - JIT

• Activities:
• How to order the warehouse - Optimize tours in the warehouse -
Warehouse Location
1.1. The commercial distribution:
Main distribution functions
5. Services
• Services linked to the sale: - Presentation and promotion of
products -Customer advice - Negotiation of the sale with the
client
• Services NOT linked to the sale: - Home delivery - Installation and
assembly at destination - Repair guarantee - Maintenance service
6. Financing
• It is produced when an intermediary pays to telling the goods, or in
a time bottom to which it takes to charge the customers or final
consumers
1.1. The commercial distribution: Main
distribution functions
7. Assumption of risks
• Risks associated with the exchange process:
• Payment or non-payment
• Losses and breaks
• Risk of not selling the product
• Obsolescence
• Risk in the use of payment cards
Example

https://www.youtube.com/watch?v=2qanMpnYsjk
1.1. The commercial distribution:
Comercial system concept

• Commercial system: Group of companies, people and organizations that,

acting as intermediaries between the offer and the demand, are dedicated to
the distribution of goods and services in a given geographical (or not) area. They
are as “bridge” between the supply and demand.

• Commercial distribution: Set of activities necessary to place the goods and

services produced by economic agents at available to final buyers who use
them to satisfy their needs and desires

• Distribution channel: Way followed by a product or service to go from the

production phase to the acquisition and consumption phase.
1.1. The commercial distribution:
Comercial system concept

carried out by shape

Commercial
Commercial system Distribution channel
distribution
1.1. The commercial distribution:
Comercial system structure
• Basic structure: Those organizations that in some time they come
to have possession and / or property of the product (they carry out
the purchase or sale, and / or activity productive-commercial).
• Producers Manufacturer / Producer

• Wholesalers Wholesale at origin

• Retailers
• Consumer Wholesale at destination

Retail commerce

CONSUMER
 1.1. The commercial distribution:
Comercial system structure
• Surface structure: other organizations or agents involved in the
distribution task, which facilitate and support the work of the
basic structure and that in most cases it does not have
possession and / or ownership of the products (they do not make
the purchase or sale). E.g.:
• Financial institutions
• Transport companies
• Insurance companies
1.1. The commercial distribution:
Comercial system structure
• Wholesalers: A firm that selling goods and services
those buying for resale or business use. Sales
activities of products and services to retailers or
other intermediary organizations, which once they
resell the merchandise to the consumer or to others
dealers. DO NOT SELL TO THE CONSUMER.

• Retailers: Activities associated with sales of

products offered to individuals or to organizations
for their final use or consumption.