This document discusses key principles of marketing, including distribution channels and intermediaries. It notes that intermediaries provide benefits like system-wide efficiency through functional specialization and managing discrepancies in quantity and assortment between producers and consumers. The document also covers topics like channel design decisions, managing channel conflict, the nature and importance of marketing logistics, mass marketing vs direct marketing, customer databases, forms of direct marketing, considerations for online marketing, issues around email marketing, and ideals around obtaining email permission.

1. Principles of Marketing
Place (Distribution)

2. Distribution Channels

3. Why intermediaries?
•System-wide efficiency
•Functional specialization
•Management of discrepancies:
•Discrepancy of Quantity
•Discrepancy of Assortment

4. System-wide efficiency

6. Discrepancy of Quantity
 Production Efficiency
 Transportation Efficiency

7. Discrepancy of Assortment
 Producers specialize
 Consumers generalize
 Direct contact is expensive
 Intermediaries offer value through
assortments

8. Channel Design Decisions
Analyzing Consumer Service Needs
Setting Channel Objectives & Constraints
Identifying Major Alternatives
Intensive Selective Exclusive
Distribution Distribution Distribution
Evaluating the Major Alternatives
Designing International Distribution Channels

9. Channel Conflict
Sources of channel conflict
 Goals
 Product line strategies
 Inherent channel design
 Length
 Variety
 Density

10. Managing Channel Conflict
Design Choice
Power and Dependency Management
Vertical integration

13. Nature and Importance of
Marketing Logistics
 Product, customers, place, time.
 Companies today place greater emphasis
on logistics because:
 service and satisfaction
 cost
 product variety
 information technology

14. Goals of the Logistics System
Higher Distribution Costs;
Higher Customer Service
Levels
Goal:
To Provide a Targeted Level of Customer Service
at the Least Cost.
Lower Distribution Costs;
Lower Customer Service
Levels

15. Major Logistics Functions
Order Processing
Order Processing
Materials Handling
Materials Handling Received
Received
Loading/Unloading
Loading/Unloading Processed
Processed
Fulfillment
Fulfillment Shipped
Shipped
Logistics
Transportation Warehousing
Warehousing
Rail, Truck, Water, Functions Storage
Storage
Pipeline, Air, Distribution
Distribution
Intermodal Automated
Automated
Inventory
Inventory
When to order
When to order
How much to order
How much to order
Just-in-time
Just-in-time

18. Customer Service
 Speed of delivery
 Dependability of delivery
 Accuracy of shipment
 Safety of shipment
Strategic Decision
 Segmentation variable

19. Mass Marketing and Direct
Marketing
Most Mass Marketing
Involves One-Way
Communications
Aimed At Consumers.
Direct Marketing
Involves Two-Way
Interactions With
Customers.

20. Benefits and Growth of Direct
Marketing
Buyers Benefits Sellers Benefits
Consumer
Convenient
Relationship Building
Easy & Private Reduces Costs
Product Access & Increases Speed &
Selection Efficiency
Abundance of
Provides Flexibility
Information
Interactive & Global Medium
Immediate

21. Mass Marketing Vs. One-to-
One Marketing (Tab. 17.1)
Mass Marketing One-to-One Marketing
Average Consumer
Average Consumer Individual Customer
Individual Customer
Customer Anonymity
Customer Anonymity Customer Profile
Customer Profile
Standard Product
Standard Product Customized Market Offering
Customized Market Offering
Mass Production
Mass Production Customized Production
Customized Production
Mass Distribution
Mass Distribution Individualized Distribution
Individualized Distribution
Mass Advertising
Mass Advertising Individualized Message
Individualized Message
Mass Promotion
Mass Promotion Individualized Incentives
Individualized Incentives
One-Way Message
One-Way Message Two-Way Messages
Two-Way Messages
Economies of Scale
Economies of Scale Economies of Scope
Economies of Scope
Share of Mind
Share of Mind Share of Customer
Share of Customer
All Customers
All Customers Profitable Customers
Profitable Customers
Customer Attraction
Customer Attraction Customer Retention
Customer Retention

22. Customer Databases
 Customer Databases
are an Organized
Collection of
Comprehensive Data
About Individual
Customers or Prospects
Including:
 Geographic,
 Demographic,
 Psychographic, and
 Behavioral Data.

23. Database Marketing
Database Marketing is the Process of Building,
Maintaining, and Using Customer Databases and
Other Databases for the Purposes of Contacting and
Transacting With Customers. How Companies Use
Their Databases:
Identifying Prospects
Identifying Prospects
Deciding Which Customers Should
Deciding Which Customers Should
Receive a Particular Offer
Receive a Particular Offer
Deepening Customer Loyalty
Deepening Customer Loyalty
Reactivating Customer Purchases
Reactivating Customer Purchases

24. Forms of Direct Marketing
Face-to-Face
Selling
Online
Telemarketing
Marketing
Kiosk Direct
Marketing Mail
Direct-Response
Catalog
TV Marketing

25. What to put on the Web Page
 Cues
 Predictive power: ability to predict quality
 Confidence: consumer understanding
 What do consumers want in a website?
 High confidence: free shipping, credit cards accepted,
“professional look,” product brand and information
 Low confidence: celebrity endorsers, company history, 3 rd party
ratings
 High predictivity: easy returns, free shipping, product brand and
information, shipment tracking
 Low predictivity: celebrities, company history, street address,
radio/tv/print ads.
 Best: free shipping, credit cards accepted, product brand and
information, easy returns.

26. Promise and Challenge of
Online Marketing
Limited Consumer Exposure and Buying
Limited Consumer Exposure and Buying
Skewed User Demographics and Psychographics
Skewed User Demographics and Psychographics
Chaos and Clutter
Chaos and Clutter
Security
Security
Ethical Concerns
Ethical Concerns

27. E-mail
 Spam
 Consumers
 ISPs
 E-mail ads
 E-commerce
 Employers

28. Responses to Spam
 Laissez faire
 Technology
 Third-party
 Legislation
 Permission schemes
 Implicit (opt-out)
 Deceptive (hidden box trick)
 Permission “creep”
 Permanence?

29. Ideal E-mail Permission
 Explicit process
 Verification
 Relationship
 Consumer access
 Consumer control
 Frictionless exit