Your SlideShare is downloading. ×
0
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Madhu place strategies
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Madhu place strategies

300

Published on

This is useful for educators and students of MBA/ Business studies. this is made in lucid style for easier understanding, exams preparation, and teaching and learning purpose.

This is useful for educators and students of MBA/ Business studies. this is made in lucid style for easier understanding, exams preparation, and teaching and learning purpose.

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
300
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • Five flows are illustrated in Figure 15.1 for the marketing of forklift trucks. If these flows were superimposed in one diagram, we would see the tremendous complexity of even simple marketing channels.
  • Transcript

    1. MARKETING MANAGEMENT Developing PLACE Strategies D.V. Madhusudan Rao Dept. MBA, School of Graduate Studies, Jigjiga University ETHIOPIA 1
    2. Chapter Questions• What is a marketing channel system and value network?• What work do marketing channels perform?• How should channels be designed?• What decisions do companies face in managing their channels?• How should companies integrate channels and manage channel conflict?• What are the key issues with e-commerce?• How will be the Future? Is it M-Commerce or ….? 1/3/2013 2
    3. What is a Marketing Channel?A marketing channel system is the particularset of interdependent organizations involvedin the process of making a product or service available for use or consumption. 1/3/2013 3
    4. Channels and Marketing Decisions• A Push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users Application: It is appropriate for low-brand loyalty products, impulse items, brand choice is made in stores products and products benefits are well understood.• A Pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediariesApplication: It is appropriate for high brand loyalty and high involvement products, consumers are able perceive differences between brands and when they choose the brand before they go to the store. 1/3/2013 4
    5. Buyer Expectations for Channel Integration• Ability to order a product online and pick it up at a convenient retail location• Ability to return an online- ordered product to a nearby store• Right to receive discounts based on total online and offline purchases 1/3/2013 5
    6. Marketing Flowsin the Marketing Channel 1/3/2013 6
    7. Categories of Buyers• Habitual shoppers—purchase from the same places in the same manner over time• High value deal seekers—know their needs and “channel surf” a great deal before buying at the lowest possible price• Variety-loving shoppers—gather information in many channels, regardless of price• High-involvement shoppers—gather information in all channels, make their purchases in a low-cost channel, but takes advantage of customer support from a high-touch channel 1/3/2013 7
    8. Consumer Marketing Channels 1/3/2013 8
    9. Industrial Marketing Channels 1/3/2013 9
    10. Increasing Efficiency 1/3/2013 10
    11. Types of Shoppers• Service/quality customers—care most about the variety and performance of products in stores as well as the service provided• Price/value customers—most concerned about spending their money wisely• Affinity customers—sought stores that suited people like themselves or the members of groups they aspired to join 1/3/2013
    12. Channel Member Functions• Gather information• Develop and disseminate persuasive communications• Reach agreements on price and terms• Acquire funds to finance inventories• Assume risks• Provide for storage• Provide for buyers’ payment of their bills• Oversee actual transfer of ownership 1/3/2013 12
    13. Designing a Marketing Channel System Analyze customer needs Establish channel objectives Identify major channel alternatives Evaluate major channel alternatives 1/3/2013 13
    14. Channel Service Outputs• Lot size—number of units the channel permits a typical customer to purchase on one occasion• Waiting/delivery time—average time customers of that channel wait for receipt of the goods• Spatial convenience—degree to which the marketing channel makes it easy for customers to purchase the product• Product variety—assortment breadth provided by the marketing channel• Service backup—add-on services (credit, delivery, installation, repairs) provided by the channel 1/3/2013 14
    15. Channel objectives• State in terms of targeted service output levels• Minimize total cost and still provide desired levels of service output• Channel Objectives vary with product characteristics – Perishable products—more direct marketing – Bulky products—minimize shipping distance – Nonstandard products—sold directly by sales representatives – Products requiring installation or maintenance service—sold and maintained by company or franchised dealers 1/3/2013 15
    16. Identifying Channel Alternatives Types ofintermediaries Number ofintermediaries Terms andresponsibilities 1/3/2013 16
    17. No. of Intermediaries: Strategies MarketIntensive Exposure Strategies Selective Selective = number of Exclusive outlets 1/3/2013 17
    18. Exclusive DistributionExclusive: Limiting the distribution to only one intermediary in the territory• LEICA was officially appointed Jebsen & Jebsen Marketing as the exclusive distributor for Singapore, Malaysia, Thailand, Indonesia and Brunei• A main factor in choosing J&J was its expertise in “high-quality technical products on the consumer market.” Source: Smartinvestor, Singapore Ed. June 2000Advantages: Maximize control over service level/output• Enhance product’s image & allow higher markups• Promotes dealers loyalty, better forecasting, better inventory and merchandising control• Restricts resellers from carrying competing brandsDisadvantages: Betting on one dealer in each market• Only suitable for high price, high margin, and low volume products 18
    19. Intensive DistributionIntensive: Distribute from as many outlets as possible to provide location convenienceEx: Newspapers, Most fast moving consumer goods you see in the newsstand• Photo processing shopsAdvantages: Increased sales, wider customer recognition, and impulse buyingDisadvantages: Characteristically low price and low-margin products that require a fast turnover – Difficult to control large number of retailers 19
    20. Selective DistributionSelective: Appoint several but not all are retailersDaewoo has 2 distributors in Singapore• “Starsauto, part of a larger Indonesian group, represents Daewoo’s traditional line of sedans.• Homegrown family-owned JTA Motors market Daewoo’s offroad vehicles like the Musso and Korando, and an upmarket model called the Chairman. (Source: BT, Motoring, Feb4/1999)Advantages: Better market coverage than exclusive distribution – More control and less cost than intensive distribution – Concentrate effort on few productive outlets – Selected firms capable of carrying full product line and provide the required serviceDisadvantages: May not cover the market adequately – Difficult to select dealers (retailers) that can match your requirement and goals 20
    21. Terms and Responsibilities of Channel Members• Price policy—price list and schedule of discounts and allowances that intermediaries see as equitable and sufficient• Condition of sale —payment terms and producer guarantees• Distributors’ territorial rights—distributors’ territories and the terms under with the producer will enfranchise other distributors• Mutual services and responsibilities (e.g., McDonald’s provide franchisees with a building, promotion support, recordkeeping system, training, and general administrative and technical assistance; franchisees are expected to satisfy company standards for the physical facilities, cooperate with new promotion programs, furnish requested information, and buy supplies from specified vendors) 1/3/2013 21
    22. The Value-Adds Vs. Costs of Different Channels 1/3/2013 22
    23. Break-Even Chart for the Choice Between A Company Sales Force and Manufacturer’s Sales Agency 1/3/2013 23
    24. Channel-Management Decisions Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members 1/3/2013 24
    25. Channel Power• Coercive--threat• Reward—extra benefit• Legitimate--contract• Expert--knowledge• Referent—proud to be associated 1/3/2013 25
    26. Channel Integration and Systems Type of channelsCharacteristics 1. Vertical marketing systems (VMS) Traditional Administered Contractual Corporate Little or Some to Fairly goodAmount of cooperation none Complete good to good Economic One None power and Contracts companyControl maintained by leadership ownership Typical “inde- GeneralExamples McDonald’s Florsheim pendents” Electric2. Horizontal (symbiotic) marketing systems: Two or more unrelated companies puttingtogether resources to exploit a marketing opportunity . Yugoka in Japan3. Multichannel systems 1/3/2013 26
    27. Producers or Middlemen May Be Channel Captains 1/3/2013 27
    28. What is Channel Conflict?• Channel conflict occurs when one member’s actions prevent another channel from achieving its goal.• Types of channel conflict – Vertical – Horizontal – Multichannel 1/3/2013 28
    29. Causes of Channel Conflict• Goal incompatibility—manufacturer want rapid penetration with low prices but dealers want high margins and pursue short-run profitability• Unclear roles and rights—company’s sales force competing with dealers• Differences in perception—manufacturers optimistic about short-term economic outlook and want dealers to carry higher inventory than dealers want to carry because they are pessimistic• Intermediaries’ dependence on manufacturer—dealers affected by manufacturer’s product and pricing decisions 1/3/2013 29
    30. Managing Channel Conflict• Adoption of superordinate goals — jointly seeking goals• Exchange of employees• Joint membership in trade associations• Cooptation--efforts by one organization to win the support of the leaders of another organization by including them in advisory councils, boards of directors, etc• Diplomacy--each side sends a person or group to meet with its counterpart to resolve a conflict• Mediation--resorting to a neutral third party to conciliate two parties interest• Arbitration--two parties agree to present arguments to one or more arbitrators and accept the arbitration decision• Legal recourse 1/3/2013 30
    31. e-Commerce Marketing Practices E-business describes the use of electronic means and platforms to conduct a company’s business. E-commerce means, the company site offers to transact selling of products and services online. E-purchasing, E-mktg • Pure-click (only Web) • Brick-and-click (Firm + Web) • Brick-and-mortar (only firm) 31
    32. E-Commerce: On-line DistributionThe success depends on the characteristics ofthe consumers in the market in terms of theirdisposition to e-commerce and surfing habitsEg. South Korea has the most dynamic Internetsurfers in Asia. They spend the least time—28seconds—on a web page before moving onAustralian surfers were the “stickiest”, clockingone minute per page (Source: March 2001 figures from Nielsen/NetRatings Globel Index) 1/3/2013 32
    33. The FUTURE:M-CommerceCell phones , PDAs, Smart phonesUMTSMobile commerce is going to be the next revenuestream once the killer mobile-application is rolledoutThe penetration of mobile data services is low inASPAC (1%) compared to the Western Europe(23%), Japan (21%) and the US (7%) (Source: ARC Group, 2000)Japan’s NTT DoCoMos recently launched i-Mode,a data communications service rather like Wap,and signed up several million customers (Source: Intelligent Enterprise Asia, July 2001) 1/3/2013 33
    34. Retailing and WholesalingStarbucks Hear Music Coffeehouse 34
    35. Chapter Questions• What major types of marketing intermediaries occupy this sector?• What marketing decisions do these marketing intermediaries make?• What are the major trends with marketing intermediaries?
    36. What is Retailing?Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, non-business use. 36
    37. Planning a Retailer’s Strategy Convenience Product Selection Fairness in DealingsKey FeaturesAffecting Helpful InformationConsumers’Retail Choice Prices Social Image Shopping Atmosphere
    38. Types Of Retailers Store Type Length and Breadth of Product Assortment Specialty Stores Narrow Product Line, Deep Assortment Wide Variety of Product Lines i.e.Department Stores Clothing, Home Furnishings, & Household Items Wide Variety of Food, Laundry, & Household Supermarkets Products Limited Line of High-Turnover ConvenienceConvenience Stores Goods Broad Product Line, Low Margin, High Discount Stores Volume Inexpensive, Overruns, Irregulars, and Off-Price Retailer Leftover Goods Large Assortment of Routinely Purchased Superstores Food & Nonfood Products, Plus Services Broad Selection, Fast Turnover, DiscountCatalog Showroom Prices 1/3/2013 38
    39. Wheel of Retailing Mid Price Mid Status Mid MarginLow PriceLow StatusLow Margin High Price High Status High Margin 1/3/2013 39
    40. Figure 18.1:RetailPositioningMap 40
    41. Levels of Retail Service• Self service—many customers will to locate- compare-select process to save money• Self selection—customers find their own goods, although they can ask for assistance• Limited service—retailers carry more shopping goods and services such as credit and merchandise-return privileges• Full service—salespeople are ready to assist in every phase of the locate-compare-select process
    42. Non-store Retailing• Direct selling —multilevel selling and network marketing selling door-to-door, or at home sales parties• Direct marketing —direct mail, catalog marketing, telemarketing, television direct-response marketing, electronic shopping• Automatic vending —variety of merchandise, impulse goods, hosiery, cosmetics, hot food, etc.• Buying service —storeless retailer servicing a specific clientele—usually employees of a large organization— who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership
    43. Major Types of Corporate Retail Organizations• Corporate chain store —two or more outlets owned and controlled, employing central buying and merchandising, and selling similar lines of merchandise (GAP)• Voluntary chain —wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising (Independent Grocers Alliance)• Retailer cooperative —independent retailers using a central buying organization and joint promotion efforts (ACE Hardware)• Consumer cooperative —retail firm owned by its customers. Members contribute money to open their own store, vote on its policies, elect a group to manage it, and receive dividends• Franchise organization —contractual association between a franchisor and franchisees (McDonald’s)• Merchandising conglomerate —corporation that combines several diversified retailing lines and forms under central ownership, with some integration of distribution and management (Allied Domeq PLC with Dunkin’ Donuts and Baskin-Robbins, plus a number of British retailers and a wine and spirits group
    44. Conventional Retailers – Try to Avoid Price Competition Expanded Specialty Ritz Camera, assortment shops & Coach, Gap, & service dept. stores Macy’s Expanded Supermarkets, Safeway, IKEA, assortment disc. houses, Home &/or reduced mass merch., margins & super-, club- Depot, Costco Single- & service Stores, +Conventional limited-Offerings line stores C-stores, 7-11, Pepsi Added conv., vending, door- higher margins, vending, reduced to-door, phone, mail, some Avon, Lands’ assortment e-tail End, QVC Expanded eBay, Amazon, assortment, reduced Internet margins, more Zappos, Netfli information x, Dell
    45. Retailer Size and Profits Large retail stores do most of the business – Only about 11% of stores sell over $5 million annually but they account for almost 70% of retail sales – Yet, some small retailers control "their" market Larger stores enjoy economies of scale Corporate chain stores also enjoy economies of scale – Account for about half of all retail sales (and much higher in some product categories) – Continuing to grow Independent retailers form chains – Cooperative chains are retailer sponsored – Voluntary chains are wholesaler sponsored
    46. Retailing and the Internet Growing fast, but still in very early stages Convenience not defined by location of product assortment More information of some types but not others – More technical detail – Less touch and feel Generally requires more advance planning – Delivery takes time and adds costs Competitive effects impact other retailers New types of specialists and intermediaries will continue to develop
    47. Mass-Merchandising Concept Retailers should offer low prices to get faster turnover and greater sales volume—by appealing to larger markets Started with supermarkets in 1930s Really caught on with mass-merchandisers – large stores – self-service oriented – Examples: Wal-Mart, Target Competition among mass-merchandisers has heated up Limited-line mass-merchandisers (“category killers”) grew rapidly, but growth has subsided
    48. Examples of Scrambled Merchandising Videotapes and DVDs at grocery stores Microwave popcorn at video rental stores Computer software at bookstores Clothing and fashion accessories at a motorcycle dealership One-hour prints from digital pictures at drugstores
    49. An Example of a Large Retail Chain
    50. Department Store Model: The Showcase Store 50
    51. What is a Franchising System? A franchising system is a system of individualfranchisees, a tightly knit group of enterprises whose systematic operations are planned, directed, and controlled by the operation’s franchisor.
    52. Franchise Operations The franchiser develops a good marketing strategy and the retail franchise holders carry out the strategy in their own units. Strong legal contracts govern the relationship. Franchisers have been successful with newcomers. – especially popular with service operations Franchise sales account for about half of all retail sales.
    53. Characteristics of Franchises• The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments• The franchisee pays for the right to be part of the system• The franchisor provides its franchisees with a system for doing business
    54. Advantages of Franchising
    55. Disadvantages of Franchising
    56. New Retail Environment• New retail forms and combinations• Growth of intertype competition• Competition between store-based and non- store-based retailing• Growth of giant retailers• Decline of middle market retailers• Growing investment in technology• Global profile of major retailers
    57. New Retail Forms and Combinations• Combination retailers—some supermarkets includes bank branches; bookstore feature coffee shops, etc.• Pop-ups —lt retailers promote brands, reach seasonal shoppers for a few weeks in busy areas and create buzz (JC Penney unveiled designer Chris Madden’s home, bath, and kitchen line in a 2,500-square-foot Rockefeller Center space for one month only.• Showcase stores—Some stores not only sell other companies’ brands but get the vendors of the brands to take responsibility for stock, staff, and even the selling space. The vendors then hand over a percentage of the sales to the store’s owner
    58. Some Trends in Retailing Growth of Internet merchants and online retailing Electronic retailing (kiosks, TV, etc.) In-home shopping (catalogs, etc.) More price competition Vertical integration More chains and franchises – chains becoming larger, more powerful More and better information (for example, scanner data)
    59. Retailers’ Marketing Decisions• Target market—profile of customer• Product assortment—breadth and depth• Procurement—merchandise sources• Prices—decided in relation to the target market• Services—pre-purchase, post- purchase, ancillary (click next slide)
    60. Retailers’ Marketing Decisions (cont.)• Store atmosphere (click next slide)• Store activities—brick-and-mortar and e-commerce• Communications—advertisement, special sale, money-saving coupons, etc.• Location decision (click next slide)
    61. Store Atmosphere• Walls• Lighting• Signage• Product placement• Floors• Surface space• Music
    62. Retail Category Management Define the category Figure out its role Assess performance Set goals Choose the audience Figure out tactics Implement the plan 62
    63. Retailer Services Mix• Pre-purchase services —accepting telephone and mail orders, advertising, window and interior display, fitting rooms, shopping hours, fashion shows, and trade-ins• Post-purchase services —shipping and delivery, gift wrapping, adjustments and returns, alterations and tailoring, installations• Ancillary services —general information, check cashing, parking, restaurants, repairs, interior decorating, credit, rest rooms, and baby- attendant service
    64. Location Decision• General business districts—downtown• Regional shopping centers—large suburban malls containing 40 to 200 stores, typically featuring one or two nationally known anchor store, such as JC Penney or Lord & Taylor• Community shopping centers—smaller malls with one anchor store and between 20 and 40 smaller stores• Strip malls strips—cluster of stores, usually housed in one long building, serving a neighborhood’s needs for groceries, hardware, laundry, shoe repair, and dry cleaning– Location within a larger store—certain well- known retailers—McDonald’s, Starbucks, Nathan’s, Dunkin’ Donuts—locate new, smaller units as concession space within larger stores or operations, such as airports, schools, or department stores 16-64
    65. Tips for Increasing Sales in Retail Space• Keep shoppers in the store• Don’t make them hunt• Make merchandise available to the reach and touch• Note that men do not ask questions• Remember women need space• Make checkout easy
    66. Location decision-Indicators of Sales Effectiveness Number of people passing by % who enter store % of those who buy Average amount spent per sale 66
    67. Private Label Brands• Private labels (reseller, store, house, or distributor brand) is a brand that retailers and wholesalers develop are ubiquitous• Consumer accepts private labels• Private-label buyers come from all socioeconomic strata• Private labels are not a recessionary phenomenon• Consumer loyalty shifts from manufacturers to retailers
    68. Private Labels 68
    69. Marketing DebateDoes it matter where your products/ services are Sold? (Channel Image Vs. Brand Image) 1/3/2013 69
    70. Wal-Mart has for the first time moved into thenumber one position on Fortune magazine’s“Fortune 500” list, passing up such companiesas GM and Exxon. How has their target marketidentification helped put them into thisposition? What canWal-Mart’s chief rivals,K-Mart and Target, doto try to close the gap? 18-70
    71. Marketing DiscussionThink of your favourite retailers.How have they integrated their channel system?How would you like their channels to be integrated?Do you use multiple channels from they? Why? 1/3/2013 71
    72. Why are Wholesalers Used? Management Selling and Services & Advice Promoting Market Buying and Information Wholesaler Assortment Building FunctionsRisk Bearing Bulk Breaking Financing Warehousing Transporting 1/3/2013 72
    73. Wholesaling Functions• Selling and promoting—sales • Transportation—provide quicker delivery to buyers because they are force help manufacturers closer to the buyers reach many small business • Financing—grant credit, and customers at a relatively low finance suppliers by ordering early cost and paying bills on time• Buying and assortment • Risk bearing—absorb some risk by building—select items and taking title and bearing cost of build the assortment their theft, damage, spoilage, and customers need obsolescence• Bulk breaking—buy large • Market information—supply carload lots and breaking the competitor activities, new products, price developments, etc bulk into smaller units • Management services and• Warehousing—hold counseling—training sales clerks, inventories, and reduce helping with store layouts and inventory costs and risks to displays, etc. suppliers and customers
    74. Wholesalers’ Marketing Decisions Target market Product assortment Price Promotion Place 74
    75. Manufacturer’s Sales Branches Separate business that producers set up away from their factories to handle wholesaling functions. Represent only about 4.3 percent of all wholesalers Handle 28.4 percent of total wholesale sales – Sales high because they are placed in best markets True operating costs may be difficult to determine
    76. Types of Wholesalers
    77. U.S. Wholesale Trade by Type of Wholesale Operation
    78. Major Wholesaler Types Merchant Full-service Limited-serviceBrokers and agents Manufacturers Specialized 78
    79. Merchant Wholesalers Take title to (own) the products they sell About 88.3% of wholesalers are merchant wholesalers Handle about 61.2% of total wholesale sales Two basic types: – Full-service wholesalers – Limited-function wholesalers
    80. Full-Service Merchant Wholesalers Provide all of the wholesaling functions Three major types: – General merchandise wholesalers – Single-line (or general-line) wholesalers – Specialty wholesalers
    81. Some Limited-Function Merchant Wholesalers  Cash and carry wholesalers—operates like service customers except must pay cash  Drop-shippers—take title to products they sell but do not stock or deliver them  Truck wholesalers—typically deliver perishable items  Rack jobbers—usually display products on their own racks  Catalog wholesalers—sell out of catalogs
    82. Agent Middlemen Are Strong on SellingManufacturer’s BrokersAgents Types of Agent MiddlemenAuctionCompanies Selling Agents
    83. Manufacturers’ Agents Sell similar products for several noncompeting producers Work on a commission basis Basically are independent, aggressive sales reps Especially helpful to small producers and producers whose customers are very spread out
    84. Brokers Main purpose is to bring buyers and sellers together Usually have a temporary relationship with buyer and seller while the deal is negotiated Earn a commission—from either the buyer or seller—depending on who hired them Especially common with seasonal products and products sold infrequently
    85. Agent Middlemen Wholesalers who do not own the products they sell Main purpose is to help with buying and selling Usually operate at relatively low cost Usually provide fewer functions than merchant wholesalers Often specialize not only by product-type, but also by customer type
    86. Trends in Wholesaling Fewer, but larger, wholesalers Use of computers to control inventory, order processing Closer relationships with customers More selective in picking customers
    87. Market Logistics Planning• Deciding on the company’s value proposition to its customers• Deciding on the best channel design and network strategy• Developing operational excellence• Implementing the solution
    88. What are Integrated Logistics Systems? An integrated logistics system (ILS)includes materials management, material flow systems, and physical distribution, aided by information technology.
    89. Market Logistics• Sales forecasting • In-plant warehousing• Distribution scheduling • Shipping-room• Production plans processing• Finished-goods • Outbound inventory decisions transportation• Packaging • Field warehousing • Customer delivery and servicing
    90. Logistics Systems Costs Order Processing Minimize Costs of Submitted Attaining Logistics Processed Objectives Shipped Logistics FunctionsTransportation WarehousingWater, Truck, Storage Rail, DistributionPipeline & Air Inventory When to order How much to order Just-in-time 1/3/2013 90
    91. Goals of the Logistics System• Provide a Targeted Level of Customer Service at the Least Cost.• Maximize Profits, Not Sales. Higher Distribution Costs/ Higher Customer Service Levels Lower Distribution Costs/ Lower Customer Service Levels 1/3/2013 91
    92. Market Logistics Decisions • How should orders be handled? • Where should stock be located? • How much stock should be held? • How should goods be shipped? 92
    93. Determining Optimal Order Quantity 93
    94. Transportation Factors • Speed • Frequency • Dependability • Capability • Availability • Traceability • Cost 94
    95. Transportation Modes Rail Piggyback Nation’s largest carrier, cost-effective for shipping bulk products Truck FishybackFlexible in routing & time schedules, efficient for short-hauls of high value goods Water Trainship Low cost for shipping bulky, low-value goods, slowest form Pipeline Ship petroleum, natural gas, and chemicals from sources to markets Air Airtruck High cost, ideal when speed is needed or to ship high-value, low-bulk items 1/3/2013 95
    96. Containerization 96
    97. Market Logistics– Organizational Lessons • Companies should appoint a senior vice president of logistics to be the single point of contact for all logistical elements • The senior vice president of logistics should hold periodic meetings with sales and operations people to review inventory, etc. • New software and systems are the key to achieving competitively superior logistics performance in the f 97
    98. Marketing DebateShould National Brand Manufacturers also supply Private Brand Labels? 1/3/2013 98
    99. Marketing DiscussionThink of your favourite stores.What do they do that encourages your loyalty?What do you like about the in-store experience?What further improvements could they make? 1/3/2013 99
    100. Reference• Kotler, Kelly, Koshy and Jha (2009) Marketing Management: A South Asian Perspective, 14th ed. Pearson Prentice Hall, pp.400-53

    ×