Group

7 DISTRIBUTING
present AND PROMOTING
PRODUCT
Please Enjoy!
 MAIN TOPIC

DISTRIB PROMO
UTING TING
S TA RT PRODUC PRODU
T CT
TIMELIN
E
DISTRIBUTING
PRODUCTS
1
CHANNELS OF DISTRIBUTION

A. Direct Channel

Is the situation when a producer of a product deals

directly with customers.
 1 The advantages of a direct channel of
distribution are :
CHANNELS OF DISTRIBUTION

The full difference between the producer’s cost and the

price paid by the consumer goes to the producer.
The producer can easily obtain firsthand feedback on
the product, allowing for quick response to customer
complaints and the opportunity to quickly correct any
deficiencies.
 1 The disadvantages of a direct
channel of distribution are :
CHANNELS OF DISTRIBUTION

The producer must employ more salespeople.

The producer must provide all product
promotions (some intermediaries might be willing
to promote the products for producers).
The producer may have to provide credit to
customers and incur the risk of bad debt (some
intermediaries might be willing to incur this risk).
 1
B. One-Level Channel
CHANNELS OF DISTRIBUTION

• Is one marketing intermediary is between the producer

and the customer.
• Some marketing in intermediaries (called merchants).
Merchants is marketing intermediaries that become
owners of product and the resell them.
• Other marketing intermediaries, called agents. Agents
is marketing intermediaries that match buyers and
sellers of products without becoming owners.
 Producer : produces
products

Retail A Retail B Retail C

Customers Customers Customers

CHANNELS OF DISTRIBUTION 1

C. Two-Level Channel

Is two marketing intermediaries are between the

producer and the customer.
 Producer : produces
products
Delivers Product

Wholesaler :
Distributes Product

Retailer A Retailer B Retailer C

Customers Customers Customers

 One-Level
Direct Channel Channel Two-Level Channel

Producer
Producer Producer

Wholesalers

Retailer
Retailer

Customers Customers Customers

CHANNELS OF DISTRIBUTION 1

D. Factors That Determine the

Optimal Channel of Distribution

• Ease of transporting
• Degree of standardization
• Internet orders
2
SELECTING THE DEGREE
OF MARKET COVERAGE

Market coverage is the degree of product distribution among outlets.

2
A.Intensive Distribution
Is the distribution of a product across most or all possible
outlets.
• The advantage is : gives consumers easy access.
• The disadvantage is : many outlets will not accept some
products if consumers are unlikely to purchase those product
there.
 2
B. Selective Distribution
SELECTING THE DEGREE OF

Is the distribution of a product through selected outlets.

• The advantage is : the distribution is focused on outlets
MARKET COVERAGE

where there will be demand for the product and or

where employees have expertise to sell the product.
• The disadvantage is : since the distribution is selective,
the products are not as accessible as they would be is
intensive distribution were used.
 2
C. Exclusive Distribution
SELECTING THE DEGREE OF

Is the distribution of a product through only one a few outlets.

• The advantage is : since the distribution is focused on a
few outlets, the products are perceived as prestigious. Also
MARKET COVERAGE

the producer can ensure that the outlets where the product
are distributed are able to service the product properly.
• The disadvantage is : the product’s access to costomers is
limited.
 SELECTING THE
3
TRANSPORTATION USED TO
DISTRIBUTE PRODUCT

a. Truck
b. Rail
c. Air
d. Water
e. Additional Transportation Decisions
4

How to Accelerate the Distribution Process

a. Streamline the Channels of Distribution

b. Use of the Internet for Distribution
c. Integrate the Production and Distribution Processes
5 Background on Retailers

• Most retailers can be described by the following

characteristics :
a. Number of Outlets
• Independent Retail Store : is a retailer that has only one outlet.
• Chain : is a retailer that has more than one outlet.
b. Quality of Service
• Full-service retail store : is a retailer that generally offers much
sales assistance to customers and provides servicing if neeeded.
• Self-service retail store : is a retailer that does not provide sales
assistance or service and sells products that do not require much
expertise.
 5
c. Variety of Product Offered
BACKGROUND ON RETAILERS

• Specialty retail store : is a retailer that specializes in a

particular type of product.
• Variety retail store : is a retailer that offers numerous types of
goods.
d. Store versus Nonstrore
• Mail-Order Retailers.
• Websites.
• Vending Machines.
6 Background on Wholesalers

Wholesalers are intermediaries that purchase products from

manufacturers and sell them to retailers.
a. How Wholesalers Serve Manufacturers
• Wholeslers offer five key services to manufacturers :
 Warehousing.
 Sales expertise.
 Delivey to retailers.
 Assumption of Credit risk
 Information
 6

b. How Wholesalers Serve Retailers

• Wholesalers offer five key services to retailers :
Warehousing.
Promotin.
Displays.
Credit.
BACKGROUND ON

Information.
WHOLESALERS
7

Vertical Channel Integration

Is two or more levels of distribution are managed by a single firm.
 7

The strategy and potential benefits of

vertical channel integration.
VERTICAL CHANNEL

a. Vertical Channel Integration by Manufacturers

b. Vertical Channel Integration by Retailers
INTEGRATION
PROMOTING
PRODUCTS
In marketing we have strategies to improve the
quality and to inform about the product that we
sell to consumers.

• Creating & Pricing Products

• Distributing Products
• Promoting Products

PROMOTI
NG
PRODUCT
 Definition of Promoting
Promoting Products : The act of informing or
reminding consumers about a specific products
or brand that company sells.
The Function, Success & Failure
of Promoting
The Function :
• To make consumers aware that the product is exist
• Can give the information about the qualities & the
advantages
Success & Failure :
• Success will impact the increase of the product
• Failure will impact the decrease of the product or
maybe worse
 Promotion Mix
1. Advertising
2. Personal Selling
3. Sales Promotion
4. Public Relations
 Advertising
Forms of Advertising :
• Brand Advertising : A non personal sales presentation about a
specific brand
• Comparative Advertising : Persuade customers to purchase
specific product by demonstrating and compare it with the
other competitor
• Reminder Advertising : Intended to remind consumers about
the product existence
• Institutional Advertising : Non personal sales presentation
about a specific instituation
• Industry Advertising : Non personal sales presentation about a
specific industry
Types of Advertising :
• Newspapers
• Magazines
• Radio
• Television
• Internet
• E-Mail
• Direct Mail
• Telemarketing
• Outdoor Ads
• Transportation
• Specialty Ads
 Personal Selling

Salespeople conduct personal selling on :

• Retail Basis
• Industrial Basis
• Individual Basis
Steps in Personal Selling :
1. Identify the target market
2. Contact potential customers
3. Make the sales presentation
4. Answer question
5. Close the sale
6. Follow up
Managing Salespeople
Sales Manager : an individual who manages a group
of sales representatives
Skills for Sales Manager are :
- Able to motivate their representatives to sell
- They can resolve customers complaints
- Reprimand representatitves when necessary
 Sales
Promotion
Set of activities that is intended to influence consumers.
The following are the most common sales promotion strategies:

1. Rebates
2. Coupons
3. Sampling
4. Displays
5. Premiums
 Rebates
Rebate is a sales promotion technique in which certain part of the
purchase amount is returned to the buyer by the seller. It is usually
given on the purchase of a certain quantity or value, product and for a
limited period of time.
 BASIS FOR COMPARISON DISCOUNT
Meaning A deduction in the
purchase price given to the
buyer, by the seller for
various reasons, is known
as discount.
REBATE
The rebate is the amount of
the purchase price
refunded by the seller to
the buyer, when the
quantity purchased reaches
the specified limit.

Type of strategy Marketing strategy Sales promotion strategy

When is it provided? When advance is paid or At the time of making full

payment is made in time. payment.

Available to All the customers Specific customers

Given on Each item purchased by the Only if the value of goods
customer. or quantity purchased
reaches the specified limit.
 Coupons
A promotional tool in the form of a document or electronic graphic that
can be redeemed for a discount when purchasing goods or services.
Coupons are used in newspaper, magazines, and ads to encourage the
purchase of a product.
 Sampling
Sampling involves offering free sample to encourage consumers to try a
new brand or product.
 Displays
The displays are used to attract consumers who are in the store for
other reasons. Products are more likely to get attention if they are
located at a point of purchase.
 Premiums
A premium is a gift or prize provided free to consumers who purchase a
specific product.
PUBLIC RELATIONS
The term public relations refers to actions taken with the goal
of creating or maintaining a favourable public image.

Public relations can be used to:

• Enhance the image of a product or of the firm itself
• To clarify information in response to adverse publicity
Effective public relations seeks to communicate
information to:
• Launch new products and services.
• Create or increase interest in a product, service, or brand.
• Defend products or services that have suffered from negative press or
perception.
• Enhance the firm's overall image.
The following are the most common types of public
relatios strategies :
 Special events
 News release
 Press Conferences
Special events
 News/media/press
releases
A brief written announcement about a firm provided by that firm to the
media. It enables the firm to update the public about its product or
operations.
Some reasons why company may send a news/media/press release to the
media, are :
1. Relocation of office
2. Introductions of new products
3. Purchase of new buildings
4. Move to new premises
5. Changes in top personel
 Press Conference
An oral announcement about a firm provided by that firm to the media.
A press conference is more personal than a news release because an
employee of that firm makes the announcement directly to the media
and may even be willing to answer questions from media.
Reasons to hold a press conference include:
• Introducing a new product
• Unveiling a new advertising campaign
• Announcing a charity event
• Releasing company financial statements
DETERMINING OPTIMAL
PROMOTION MIX
Target Market
A target market is a group of consumers or organizations most
likely to buy a company’s products or services.

Promoting Method Advantages Disadvantages

Advertising Reaches a large number of customers
Personal Selling Provide personalized attention
Sales Promotion Offers various incentives for consumers to
purchase products
Public Relations Inexpensive method of enhancing the
image of the firm or its products
• Can be expensive
• Is not personalized
Difficult to reach a large number of
customers
May not reach as many consumers as
advertising
Provides only a limited amount of
promotion because news releases and
press conferences may not always be
covered by the media
 PULL PUSH
STRATEGY STRATEGY
PULL STRATEGY
A pull strategy involves motivating customers to seek out your brand in
an active process.
“Getting the customer to come to you”
PUSH STRATEGY
A push promotional strategy involves taking the product directly to the
customer via whatever means, ensuring the customer is aware of your
brand at the point of purchase.
“Taking the product to the customer”
 PULL PUSH
STRATEG
Manufacturer Promotion
STRATEG
Manufacturer
Y Y
Wholesalers Wholesalers

Retailers Retailers

Promotion Consumers Consumers

Promotion Budget
The amount of funds that have been set aside to pay for all promotion
methods over a specified period.

The promotion budget for a product is influenced by the following

characteristic :
1. Phase of the product life cycle
2. Competition
3. Economic Condition
Phase of the product life cycle
Firms use advertising not only as an aggressive strategy to increase
market share, but also as a defensive strategy to retain existing market
share.

Competition
Firms respond in different ways to favourable economic conditions

Economic Condition
Evaluating and Revising
Firms recognize that marketing can
have a major impact on sales, but
they also want to make sure that
their promotion efforts are worth the
cost. They view marketing as an
investment, not just an expense, and
they want to see result of that
investment.