Bmgt 411 week_9

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Bmgt 411 week_9

  1. 1. BMGT 411: Week #9 Kottler: Chapters 13 - Integrated Marketing Channels Chapter 14 - Retailing, Wholesaling, and Logistics Wood: Chapter 8 - Channel and Logistic Strategy 1
  2. 2. BMGT 411: Chapter 13 Designing and Managing Integrated Marketing Channels 2
  3. 3. Chapter Questions • What is a marketing channel system and value network? • What work do marketing channels perform? • What decisions do companies face in designing, managing, and integrating their channels? • What key issues do marketers face with e-commerce and m-commerce? 3
  4. 4. What is a Marketing Channel? • A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption. • The set of pathways a product or service follows after production, culminating in purchase and consumption of the final end user 4
  5. 5. Path to Supermarket http://www.youtube.com/watch? v=CAbFLBM6uHM 5
  6. 6. 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 • A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries 6
  7. 7. Push Strategy Example: Paying for Shelf Space http://www.youtube.com/watch? v=pDxSX-BAs0U 7
  8. 8. Pull Strategy Example: Advertising and Branding Apple iPhone and Carriers 8
  9. 9. Multi-Channel Marketing • When a single firm uses two or more marketing channels to reach customer segments • 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 9
  10. 10. Table 13.1 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 10
  11. 11. Figure 13.1 Marketing Flows 11
  12. 12. Figure 13.2 Consumer Markets 12
  13. 13. Figure 13.2 Consumer Markets 13
  14. 14. Figure 13.2 Consumer Markets 14
  15. 15. Figure 13.2 Industrial Markets 15
  16. 16. Reverse-Flow Channels 16
  17. 17. Designing a Marketing Channel System • Analyze customer needs: based on price, product assortment, and convenience, as well as shopping goals • Establish channel objectives: Maximizing the desired level of output while also reducing costs • Identify major channel alternatives: The types of intermediaries, the number needed, and terms and responsibilities of each • Evaluate major channel alternatives: Comparing the costs of each channel and customer expectations to decide on the best one 17
  18. 18. Identifying Channel Alternatives  Types of intermediaries:  Merchants or Retailers: Buy take title of goods and resell  Example: Mass Market Stores, Grocery Stores, etc  Agents, Brokers, Sales Agents: Negotiating on the producers behalf, but not taking ownership of the product  Travel agencies, Financial Consultants  Facilitators: Assist in getting the product to market, but do not take ownership nor assist in the sales  Trains, Trucking, Warehousing, etc  Number of intermediaries  Terms and responsibilities 18
  19. 19. Identifying Channel Alternatives  Number of intermediaries:  Exclusive: Severely limiting the intermediaries, controlling the service levels and outputs  Ex. Product’s like Tiffany, sold only in their stores  Selective: Gaining adequate market coverage by being selective about who carries your product  Ex. Whole Foods Vendors  Intensive Distribution: Offering product in as many places as possible, often in convenience goods  Ex. Soft Drinks  19
  20. 20. Figure 13.3 The Value- Adds versus Costs of Different Channels C B A 20
  21. 21. Channel-Management Decisions • Selecting channel members: Negative experience at intermediary can cause a negative reaction at the company • Training channel members: The power has shifted in most cases from producers to intermediaries • Evaluating channel members: Constant evaluation of most profitable intermediaries, reducing and adding intermediaries by Modifying channel members over time • Consolidation of stores • Shifting to direct selling 21
  22. 22. P&G eStore 22
  23. 23. Different Types of Companies and Intermediaries • Wal Mart • Starbucks • Amazon • Giant Eagle 23
  24. 24. Channel Conflict (Page 208) • What types of conflict arise in channels? • What causes conflict? • Goal incompatibility • Unclear roles and rights • Differences in perception • Intermediaries’ dependence on manufacturer • What can marketers do to resolve it? 24
  25. 25. E-Commerce • Pure Click: No Physical Stores • Brick and Click: Existing companies adding an online component • M-Commerce: Selling directly to customers on smartphones and tablets • Have any of you purchased something on your smartphone? 25
  26. 26. M Commerce Trends 26
  27. 27. M Commerce Trends 27
  28. 28. M Commerce Trends 28
  29. 29. BMGT 411: Chapter 14 Managing Retailing, Wholesaling, and Logistics 29
  30. 30. Chapter Questions • What major types of marketing intermediaries occupy this sector and what marketing decisions do they face? • What are the major trends with marketing intermediaries? • What does the future hold for private label brands? 30
  31. 31. Table 14.1 Major Retailer Types • Specialty store • Department store • Supermarket • Convenience store • Discount store • Off-price retailer • Superstore • Catalog showroom • Club • Drug Stores 31
  32. 32. Speciality Store Narrow Product Lines Lower Volume, Higher Margins 32
  33. 33. Department Stores Several Product Lines High Volume/High Margins (Depends on Store) 33
  34. 34. Grocery Store High Volume/Low Margin Often Regional due to Distribution Limitations 34
  35. 35. Drug Stores Lower Volume/Higher Margins Convenient Locations 35
  36. 36. Convenience Stores High Volume/Mixed Margins Gas = low Food = High 36
  37. 37. Superstore Mass Retailers Very High Sales, Very Low Margin, Low Price Sells Groceries + Everything Else 37
  38. 38. Superstore: Built on Distribution Systems Walmart distribution system 38
  39. 39. Supply Chain Management • Supply chain management starts before physical distribution and means strategically procuring the right inputs (raw materials, components, and capital equipment); converting them efficiently into finished products; and dispatching them to the final destinations. • Integrated Logistics Systems: An integrated logistics system (ILS) includes materials management, material flow systems, and physical distribution, aided by information technology. • http://www.youtube.com/watch?v=SUe-tSabKag 39
  40. 40. Market Logistics • Sales forecasting • Distribution scheduling • Production plans • Finished-goods inventory decisions • Packaging • In-plant warehousing • Shipping-room processing • Outbound transportation • Field warehousing • Customer delivery and servicing 40
  41. 41. Market Logistics Decisions • How should orders be handled? • Where should stock be located? • How much stock should be held? • How should goods be shipped? 41
  42. 42. Figure 14.1 Determining Optimal Order Quantity 42
  43. 43. Levels of Retail Service • Self service: Grocery stores, etc • Self selection: Customers can find their own goods, can ask for assistance • Specialty stores • Limited service: limited service based on needs • Full service: Service every step of the way (Most expensive) • Cars, Luxury items 43
  44. 44. Trends in Retailing: Growth of Non-Store Selling • Direct: Avon, • Direct: 1-800 flowers • Automatic Vending 44
  45. 45. Table 14.2 Major Types of Corporate Retail Organizations • Corporate chain store: Chain stores and wholesalers owned by the same company • Voluntary chain: A group of retailers owned by different companies that use one wholesaler (IGA Group) • Franchise organization: Independently owned, pay a fee to be part of the franchise system. Reduction in marketing costs because of scale (McDonald’s, Jiffy Lube) • Merchandising conglomerate: Combines several retailing lines under one central ownership group 45
  46. 46. Top Retailing Trends • Entering Urban Areas • Getting smaller • Temporary Stores, or pop up stores • Integrating technology into the experience • http://www.youtube.com/watch?v=qJWcX3huiZs 46
  47. 47. Urban Store Trend East Liberty Target/New York Aldi 47
  48. 48. Walmart - Getting Smaller? Walmart Express 48
  49. 49. Pop Up Stores Starbucks 49
  50. 50. Retailers’ Marketing Decisions • Target market • Product assortment • Procurement • Prices • Services • Store atmosphere • Store activities • Store experiences • Communications • Location 50
  51. 51. Store Atmosphere and Experiences Bass Pro Shops 51
  52. 52. Target Market Gap Inc 52
  53. 53. Private Label Brands • Private Label Brand: a brand that retailers or wholesalers develop • 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 53
  54. 54. Private Label Brands are Often Manufactured by the Same Company 54
  55. 55. Clean and Unique Style Target’s Up and Up Brand 55
  56. 56. Aldi - Only Sells Private Label 56
  57. 57. Wood Chapter 8: Key Take Aways 57
  58. 58. Multichannel Marketing • “Multichannel marketing” or OmniChannel puts the emphasis on providing a range of choices for customers who buy through different channels at different times or for different reasons. • http://www.lincoln.com/ concierge-about/ 58
  59. 59. BMGT 411: Preparing for Week 10 • Review Chapter Notes: • Kottler: • Chapters 15 - Managing Integrated Marketing Communications • Chapter 10 - Planning Metrics for Marketing 59

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