INTRODUCTION TO MARKETING MANAGEMENT

Review for Quiz 3 Chapters: 12, 13 14,15, and 17

Dr. Franck VIGNERON CSUN – College of Business & Economics 1

Chapter 13

Distribution Channels and Logistics Management

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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.

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They are: Risk Taking Financing Physical Distribution Negotiation Matching 4 Information Promotion Contact .Distribution Channel Functions Members of the marketing channel perform many key functions.

Channel 1 M Direct Channel Indirect Channel C Channel 2 M R C Channel 3 M W R C Channel 4 M W J R C 5 .Number of Channel Levels Channel Level = Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer.

• When this doesn’t happen. each channel member’s role must be specified and conflict must be managed. i. – Vertical Conflict occurs between different levels of the same channel. wholesaler to retailer.Channel Behavior & Conflict • For the channel to perform well. i. 6 .e.e retailer to retailer. conflict occurs: – Horizontal Conflict occurs among firms at the same level of the channel.

a Vertical Marketing System Conventional Marketing Channel Manufacturer Vertical Marketing System Manufacturer Wholesaler Wholesaler Retailer Consumer Retailer Consumer 7 .Conventional Marketing Channel Vs.

H/R Inn 8 . McDo/Bking.Types of Vertical Marketing Systems Vertical Marketing Systems (VMS) Corporate VMS Contractual VMS Administered VMS Wholesaler Sponsored Voluntary Chain Retailer Cooperatives Franchise Organizations 40% of Retail Sales ManufacturerSponsored Retailer Franchise System Ford + dealers ManufacturerSponsored Wholesaler Franchise System Coca-Cola Service-FirmSponsored Franchise System Hertz/Avis.

. Outside US Néstlé selling General Mills cereals Hybrid Marketing System A Single Firm Sets Up Two or More Marketing Channels to Reach One or More Customer Segments.Innovations in Marketing Systems Horizontal Marketing System Two or More Companies at One Channel Level Join Together to Follow a New Marketing Opportunity. Catalogs. and Sales Force 9 . Example: Banks in Grocery Stores Competitors helping each other E.g. Example: Retailers.

Analyzing Consumer Service Needs 2. Identifying Major Alternatives Intensive Distribution Fast Moving C. Setting Channel Objectives & Constraints 3. Control. Designing International Distribution Channels 10 . Selective Distribution Maytag Exclusive Distribution Rolls-Royce 4.Channel Design Decisions 1. G. Evaluating the Major Alternatives Review Economic. and Adaptive Criteria 5.

Push and Pull Strategies Push Strategy Producer Wholesalers Retailers Customers Pull Strategy Producer Wholesalers Retailers Customers Push/Pull Strategies Producer Wholesalers Advertising and Promotion 11 Distribution Strategies Retailers Customers .

Intermodal Transportation Functions Inventory Warehousing Storage Distribution Automated When to order How much to order Just-in-time 12 . Pipeline. Water. Air. Truck.Major Logistics Functions Costs Order Processing Received Processed Shipped Minimize Costs of Attaining Logistics Objectives Logistics Rail.

final goods. implementing. and related information from points of origin to points of consumption to meet customer requirements at profit.Marketing Logistics • Involves planning. and controlling the physical flow of materials. • INBOUND + OUTBOUND = Market Logistics • Supply Chain + value chain management 13 .

efficient for short-hauls of high value goods Low cost for shipping bulky. and chemicals from sources to markets High cost. piggyback Rail Flexible in routing & time schedules. non perishable goods. low-value. ideal when speed is needed or distance markets have to be reached 14 Truck Water Pipeline Air . slowest form Ship petroleum. cost-effective for shipping bulk products. natural gas.Transportation Modes Nation’s largest carrier.

Availability (area served) 4. Dependability (meet schedules) 3. Speed (door-to-door time) 2.Choosing Transportation Modes Checklist for Choosing Transportation Modes 1. Costs (per ton-distance) 5. Flexibility(ability to handle various products) 15 .

Franck VIGNERON CSUN – School of Business & Economics 16 .INTRODUCTION TO MARKETING MANAGEMENT Chapter 14 Distribution Strategies Dr.

those firms engaged primarily in wholesaling activity. Nonbusiness Use.What is Retailing? Includes all the activities Involved in Selling Goods or Services Directly to Final Consumers for Their Personal. 17 . Retailers .

Product Assortment and Services Decisions • Width and Depth of Assortment Product Assortment • Quality of Products • Product Differentiation Strategies Key Tool of Nonprice Competition for Setting One Store Apart From Another • Physical Layout Services Mix Store’s Atmosphere 18 • “Feel” That Suits the Target Market and Moves Customers to Buy .

or Contractual Ownership Organization Self-Service. Corporate.Classification of Retailing Independent. Limited-Service and Full-Service Retailer Depth/Length and Breadth of the Product Assortment Pricing Structure that is Used by the Retailer 19 Retail Organizations Amount of Service Product Line Relative Prices .

Depth of Merchandise Lines Breadth: Number of different product lines Men’s Clothing Shoes Appliances CDs Depth: Number of items within each product line Nike running shoes Florsheim dress shoes Top Sider boat shoes Adidas tennis shoes Amana refrigerator Sony TV sets JVC videocassette recorders General Electric dishwashers Sharp microwave ovens Classical Rock Jazz Country Western Suits Ties Jackets Overcoats Socks Shirts 20 .Breadth vs.

e.g. & Household Products i.e. Kroger Limited Line of High-Turnover Convenience Goods i. The Limited or Athlete’s Foot Wide Variety of Product Lines i. 7-Eleven Large Assortment of Routinely Purchased Food & Nonfood Products i.e. + What is an Hypermarket? Store Specialty Stores Department Stores Supermarkets Convenience Stores Superstores Discount Stores Off-Price Retailers Warehouse Clubs Description Narrow Product Line. Maxx Limited Selection of Brand-Name Grocery Items.e.e. Sam’s Club 21 ..J. Wal-Mart Changing Collection of Higher-Quality Goods at a Reduced Price i. Clothing. Saks Fifth Avenue Wide Variety of Food. Laundry. Toys R Us Standard Merchandise at Lower Prices i. T. Appliances. Home Furnishings.e.e.Classification of Retailing: Product Line E. i.e. Etc. Deep Assortment i.

What is Wholesaling? All the activities involved in selling goods and services to those buying for resale or business use. •Wholesalers buy mostly from producers and sell mostly to: –Retailers. and –Other wholesalers. •Wholesaler . 22 . –Industrial consumers.those firms engaged primarily in wholesaling activity.

Why are Wholesalers Used? Wholesalers are Often Better at Performing One or More of the Following Channel Functions: Management Services & Advice Market Information Risk Bearing Financing Transportation Selling and Promoting Buying and Assortment Building Bulk Breaking Wholesaler Functions Warehousing 23 .

Types of Wholesalers
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.

They Don’t Take Title to the Goods, and They Perform Only a Few Functions.
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Brokers/ Agents

Trends in Wholesaling
Consolidation within the Industry is Reducing # of Wholsalers

Distinction Between Large Retailers and Wholesalers Blurs

Wholesalers Will Continue to Increase the Services Provided

Wholesalers Are Beginning to Go Global
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Chapter 15
Integrated Marketing Communication Strategy

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The Promotional Mix PR Advertising Sales Promotion Direct MKG Personal Selling Product Place Price Advertising Strategies Promotion 4P’s (Distribution) Place 27 .

Setting Advertising Objectives Informative Advertising Inform Consumers or Build Primary Demand i.e Sony CD Players Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time Advertising Objective Comparison Advertising Compares One Brand to Another i.e.e.e CD Players Persuasive Advertising Build Selective Demand i. Coca-Cola 28 . Avis vs. Hertz Reminder Advertising Keeps Consumers Thinking About a Product i.

Informal Selective Exposure Individuals Target Audience Intermediary Audience Unintended Audiences Sender (Source) Symbols Pictures Words Images Messag e Channel (Medium ) Receiver (Consumer) Mediated by: Involvement Mood Experience Personal Charac. Unpaid Print.Figure 9. Impersonal Responds Appropriately ? No Miscomprehends ? No Yes Yes Pretests to Ensure Message Will be Received Posttests to Ensure Message Was Received Feedback 29 . Broadcast. Emotional Formal vs. Electronic Personal vs. 2-sided Individual Factual vs.3 Comprehensive Communication Model Commercial Verbal vs. Nonverbal Non-Profit 1-sided vs. Decodes Paid vs.

Determining the Communication Objectives Buyer Readiness Stages Awareness Knowledge Liking Preference Conviction Purchase 30 . Identifying the Target Audience Step 2.Steps in Developing Effective Communication Step 1.

Arouse desire 2). Hold interest 4). Obtain action 31 . Illustration. Designing a Message Message Content Rational Appeals Emotional Appeals Moral Appeals Message Structure Draw Conclusions Argument Type Argument Order Headline. Copy. Get attention 3). & Color Body Language Message Format • AIDA model. 1).Steps in Developing Effective Communication Step 3.

distinctive. and believable to be effective) Ego Oriented 32 Humor Advertising Strategies Fear Sex Comparative + Morale Appeal: Social causes & Human Rights .the creative attempt to motivate consumers toward some form of activity. or to influence attitudes toward a product or service Rational appeal a focus toward the consumer’s practical utility oriented needs Emotional appeal a focus on psychological rather than utility needs (all appeals can be positive or negative and should be meaningful.Appeals Appeal .

33 . – c). – b). Whether to present the strongest arguments first or last. • 1). Whether to present a one-sided argument or a two-sided argument.Structure & Format • The marketing communicator needs a strong structure and format for the message. Whether to draw a conclusion or leave it to the audience. Three structure issues must be addressed: – a).

shape. copy. 34 . d).Structure & Format (continuous) • 2). Eye-catching pictures and headlines. illustration. Color. e). Novelty and contrast. The message format decides on the headline. b). Distinctive formats. and movement. To attract attention the advertiser can use: – – – – – a). Message size and position. • 3). c). and color.

Steps in Developing Effective Communication Step 4. Choosing Media Personal Communication Channels Nonpersonal Communication Channels 35 .

• Credibility of Spokespersons and Endorsers – Importance of perceived competency and expertise • Message Credibility – Past experience with organization .. Word-of-mouth • Credibility of Formal Sources – Differ.g.Issues in Credibility • Credibility of Informal Sources – E. Between for profit vs nfp Org.

CREDIBILITY OF THE MEDIA CHANNELS SPONSORING VERSUS ADVERTISING + CREDIBILITY OF THE SOURCES - FOR-PROFIT Org. - + 37 . VERSUS NOT FOR PROFIT Org.

SPONSORING + ++ VERSUS ADVERTISING -- - 38 . VERSUS NOT FOR PROFIT Org.CREDIBILITY OF THE MEDIA CHANNELS IN RELATION WITH THE SOURCES FOR-PROFIT Org.

Campaign Evaluation Advertising Program Evaluation Communication Effects Is the Ad Communicating Well? Sales Effects Is the Ad Increasing Sales? .

Setting the Total Promotion Budget One of the Hardest Marketing Decisions Facing a Company is How Much to Spend on Promotion. Then Estimating Costs Based on the Competitor’s Promotion Budget Competitive-Parity 40 . Affordable Percentage of Sales Based on What the Company Can Afford Based on a Certain Percentage of Current or Forecasted Sales Objective-and-Task Based on Determining Objectives & Tasks.

Franck Vigneron Chapter 16 Sales Promotion + PR + Advertising 41 .Dr.

 Offers Reasons to Buy Now.  42 .  Stimulate earlier or stronger market response.What is Sales Promotion ? Sales Promotion is a Mass Communication Technique That Offers Short-Term Incentives to Encourage Purchase or Sales of a Product or Service.

Major Consumer Sales Promotion Tools/1 Sample Coupons Trial amount of a product Savings when purchasing specified products Refund of part of the purchase price 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 43 Cash Refunds Price Packs Premiums Advertising Specialties .

Major Consumer Sales Promotion Tools/2 Patronage Rewards Point-of-Purchase Contests Sweepstakes Game Cash or other rewards for the use of a certain product Displays and demonstrations that take place at the point of sale Consumers submit an entry to be judged Consumers submit their names for a drawing Presents consumers with something every time they buy 44 .

Major Trade Sales Promotion Tools/1 Trade-Promotion Objectives Persuade Retailers or Wholesalers to Carry a Brand Give a Brand Shelf Space Promote a Brand in Advertising Push a Brand to Consumers 45 .

Major Trade Sales Promotion Tools/2 Trade-Promotion Tools a straight reduction in price on purchases during a stated period of time. Discounts 46 . Can be called priceoff. or off-list. off-invoice.

which are extra cases of merchandise.Major Trade Sales Promotion Tools/3 Trade-Promotion Tools • Promotional money paid by manufacturers to retailers who agree to feature the manufacturer’s products in some way. A display allowance compensates them for using displays. d). 47 . to resellers who buy a certain quantity or who feature a certain flavor or size. Manufacturers may offer free goods. c). Manufacturers may give retailers free specialty advertising items that carry the company’s name (such as pens). An advertising allowance compensates retailers for advertising a product. Allowances b). Forms include: a).

Major Business Sales Promotion Tools Business-Promotion Objectives Generate Business Leads Stimulate Purchases Reward Customers Motivate Salespeople Business-Promotion Tools Conventions Trade Shows Sales Contests 48 .

Developing the Sales Promotion Program Decide on the Size of the Incentive Set Conditions for Participation Determine How to Promote and Distribute the Promotion Program Determine the Length of the Program Evaluate the Program 49 .

Stories. 50 .What is Public Relations? Public Relations Involves Building Good Relations With the Company’s Various Publics by Obtaining Favorable Publicity. and Handling or Heading Off Unfavorable Rumors. and Events. Building Up a Good Corporate Image.

Major Public Relations Functions Press Relations Product Publicity Public Affairs Lobbying Public Relations Departments May Perform Any of All of the Following Functions: Investor Relations Development 51 .

Major Public Relations Tools News Web Site Public Service Activities Corporate Identity Materials Written Materials 52 Speeches Special Events Audiovisual Materials .

Major Public Relations Decisions Setting Public Relations Objectives Choosing the Public Relations Messages and Vehicles Implementing the Public Relations Plan Evaluating Public Relations Results 53 .

What is Advertising? Advertising is Any Paid Form of Nonpersonal Presentation and Promotion of Ideas. Goods. or Services by an Identified Sponsor. 54 .

Media Selection Deciding on reach. and impact. Reach is the percentage of people in the target market exposed to an ad campaign during a given period. • b). • a). frequency. • c). 55 . Frequency is the number of times the average person in the target market is exposed to an advertising message during a given period. Media impact is the qualitative value of an exposure through a given medium.

6 major advertising media • • • • • • Television Radio Magazines Newspaper Internet And Outdoor (e.. billboards) 56 .g.

Message on 57 Universe . Message on Resultats 3. 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. Is representation of product Perf. Message on Product 2.Copy and Message Direction Motivational Source Motivation = Product Performance Motivation = Association with Product Universe Perf.

Chapter 18 Competitive Strategies: Attracting. Retaining. and Growing Customers 58 .

retaining. companies are going all out to retain current customers and build profitable. and growing profitable customers. The move today. Beyond designing strategies to attract new customers and create transactions with them. and enhancing strong relationships with customers and other stakeholders. 59 . This new view is that marketing is the science and art of finding.Customer Relationship Marketing • Traditional marketing theory and practice have focused on attracting new customers rather than retaining existing ones. is toward relationship marketing-creating. long-term relationships with them.maintaining. 1). 3). 2). however.

Satisfaying the Needs Create the Product Identify The needs to Satisfy STAGES NEEDS PRODUCTS Retain Customer By Maintaining Satisfaction Adapt and Deliver the Products to The Right Target 60 .

Customer Delivered Value 61 .

Product Falls Short of Expectations Customer is Dissatisfied Product Matches Expectations Customer is Satisfied Product Exceeds Expectations Customer is Highly Satisfied or Delighted! 62 . & Marketer and Competitor Information and Promises. the Opinions of Friends.Customer Satisfaction Expectations are Based on Customer’s Past Buying Experiences.

strengths and weaknesses. and reaction patterns Selecting which competitors to attack or avoid 63 .Steps in Analyzing Competitors Identifying the company’s competitors = BENCHMARKING Assessing competitor’s objectives. strategies.

Basic Competitive Strategies Overall Cost Leadership Focus Differentiation Middle of the Road 64 .

Competitive Strategies: Value Disciplines Companies Gain Leadership Positions by Delivering Superior Value to their Customers Through These Strategies: Product Leadership intel 65 Operational Excellence Alaska Airlines Customer Intimacy Ikea .

Competitive Marketing Strategies Firms Competing in a Given Target Market Differ in their Objectives and Resources so May Choose the Following Forms: 66 .

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