SHORT PRESENTATION ABOUT PLACEMENT BASICS

1. www.eoi.es
PLACEMENT STRATEGY
BLENDED EDUCATION
PROFESSOR
Antonio Fontanini

2. Marketing Strategy Planning Process
04/08/14
Customers
Needs and other
Segmenting
Dimensions
Company
Mission, Objectives,
& Resources
Competitors
Current &
Prospective
S.
W.
O.
T.
External Market Environment
Technology, Political & Legal, Social & Cultural, Economic
Targeting &
Segmentation
Positioning &
Differentiation
Narrowing down to focused strategy with quantitative and qualitative screening criteria

3. Marketing Channels are
sets of independent
organizations involved
in the process of
making a product or
service available for use
or consumption.

4. The importance of Channels
• Channels affect all other
marketing decisions.
• Channels cannot be
changed in the short
term.
• Push vs pull strategy

5. Advantages of a distribution system
• Key external resource
• Takes years to build
• Significant corporate
commitment to a large
numbers of firms
• Commitment to a set of
policies that nourishes
long term relationships

6. Caterpillar
50 Year worldwide leader in heavy
equipment for building and mining
+ 20B$ Revenues/ Year
+ 50% of his direct competitor
35% worldwide market share
+ 300 products to + 200 countries
SUCCESS FORMULA
High Quality products
Flexible and Efficient Production
Continuos Innovation
Market Oriented Organization

7. Caterpillar
211 DEALERS WORLDWIDE
Conocen el mercado local, a los clientes, dan todo
el servicio, acompañan al producto toda la vida
“Compre la maquina, obtenga la empresa”
PRINCIPLES
• Caterpillar No compite con sus canales
• 1 sola red mundial, con todos conectados:
desde cualquier sitio hay visibilidad total
• Servicio y disponibilidad 7/24
Mine in Indonesia (Free Port Mc Moran). Biggest
open sky copper and gold
500 equipos (Cargadores, Tractores, Camiones de
240 Tons y 2000 HP): each > 1M$
Service is key.

8. Caterpillar
Dealers rentability is guaranteed: Since 1925
+50 years same family; personal relationship
Mid `80s: worldwide crisis >1B$ losses
It did not loose any dealer
Extraordinary support to deliveries:
• 36 centros de distribución
• 1,500 Instalaciones de servicios
• 320,000 componentes en existencia
• 84,000 artículos expedidos/día
• Entrega de repuestos en 48 horas
• 80% pedidos: entrega inmediata
• 99% en el mismo día

9. Types of consume intermediaries
• Distributors
• Wholesalers
• Retailers
• Department stores

10. Different kind of Channels
• Direct Channels
• Indirect Channels
• Hybrid Channels
– E.g.: IBM
• For large accounts direct
sales executives
• For SMEs Telemarketing
• For Consumers Retailers

11. CASO: G.E. APPLIANCES (Electrodomésticos)
STATUS: Venta y saturación a los dealers para dejar menos
espacios para otras marcas; presión para vender un gran
stock: tenía problemas de fidelidad y competitividad.
GE CUSTOMER´S NET: + 8,000 DEALERS
Los dealers reciben on-line toda la información sobre
modelos, precios, plazos de entrega, benchmarking con el
mercado, .. Estado de los pedidos, inventario virtual, .. En las
tiendas hay sólo modelos en exhibición (muestras) con
teminales remotos para personalizarl los productos: 24 horas
de plazo de entrega.
Different kind of Channels

12. Different kind of Channels
Horizontal Channels (Lamar Saving Bank offices
in Safeway, McDonald´s in Wal Mart, Starbuck
Coffee in Barnes & Nobles, …)
q Creation of contact points inside the channel
q “P&G” has 100 people at Wal Mart HW for
process optimization
q “Western Publishing” created “Book´R Us”
inside “Toys´R Us”: “golden little books”
q “Sara Lee” has “dealer teams” inside “Target”
shops to optimize invenories and know
customers

13. Manufacturer or producer
Consumer
Procter &
Gamble
Del
Monte
NissanCitibank
Wholesaler
Wholesaler
Retailer
Wholesaler
RetailerRetailer
Four Examples of Basic Channels of Distribution
for Consumer Products

14. Why not going direct?
• Many distributors lack the
financial resources to direct
marketing
• Producers who can establish
their own channels can find a
higher return by increasing
investment in their main
business.
• In some cases direct marketing
is simply not possible.

15. Channel functions
• Gathers information on
customers, competitors and
other external market data
• Develop and disseminate
persuasive communication to
stimulate purchases
• Agreement on price and other
terms
• Placing orders with
manufacturers

16. Channel functions
• To finance inventories and the
market access
• Assume responsibility of all risks
of the trade
• Successive storage and
movement of products
• Helps buyers in getting their
payments through
• Oversee actual transfer of
ownership

17. INDUSTRY CHANNELS
INDIVIDUAL ACCESS
DIRECT
Subsidiaries (commercial rep, local company)
INDIRECT
Agents, Distributors,Vars
SHARED ACCESS
Piggy-back
Temporary Association
Joint Ventures
Trading Companies
Licence/Technology Licencing
FRANCHISING
Multinacionals
Off-Shores

18. producto precio comunicación distribución
VENTA
DIRECTA Bueno Bueno Bueno Suficiente
AGENTE Suficiente Suficiente Malo Malo
IMPORTADOR Suficiente Muy
malo Malo Malo
FIL IAL Bueno Bueno Bueno Bueno
AGRUPACION
EXPORT Bueno Suficiente Suficiente Suficiente
JOINT
VENTURE Bueno Suficiente Suficiente Suficiente
PIGGY-­‐BACK Suficiente Suficiente Regular Malo
CONTROL DEGREE IN THE MIX

19. MULTINATIONALS
Geografical diversification of enterprises
– Etnocentric/ Policentric/ Geocentric (global vision)
– Multiple bases
– Globalization of economic resources, organization,
technologies, planning and managements
– M&A, Holding, Associates, Participates.
– Programas integrales de compra, producción, ventas,
financiación y prestación de servicios a escala intl
– Programas de I+d de productos subvencionados con medios
estatales en los países filiales
– Holding in “off shore” (tax heaven) countries
– Earnings fiscal management through “transfer pricing”
technics, avoiding currency change risks
– Lobbying) at local governments.

20. Sigla Descripción
GRUPO E (Salida) EXW Ex Works
GRUPO F (Sin pago trans) FCA Free Carrier
FAS Free Along Ship
FOB Free On Board
GRUPO C (Con pago trans) CFR Cost and Freight
CIF Cost, Insurance and Freight
CPT Carriage Paid To
GRUPO D (Llegada) CIP Carriage and Insurance Paid to
DDU Delivered Duty Unpaid
DDP Delivered Duty Paid
INCOTERMS 2010

21. INCOTERMS
INCOTERM SIGLAS GTOS EN ORIGEN
1 2 3 4 5
GTOS INTERNAC.
6 7
GTOS EN DESTINO
8 9 10 11
M/T T/V
En Fábrica EXW V C C C C C C C C C C G S
Franco al Costado del Buque
Franco Transportista
Franco A Bordo
FAS
FCA
FOB
V V V V C
V V V V C
V V V V V
C C
C C
C C
C C C C
C C C C
C C C C
M
G
M
S
S
S
Coste y Flete
Transporte Pagado Hasta
Coste, Seguro y Flete
Transporte y Seguro Pagados
CFR
CPT
CIF
CIP
V V V V V
V V V V V
V V V V V
V V V V V
V C
V C
V V
V V
C C C C
C C C C
C C C C
C C C C
M
G
M
G
S
S
S
S
Entregada en Frontera
Entregada Sobre Buque
Entregada Sobre Muelle
Entregada Derechos No Pagados
Entregada Derechos Pagados
DAF
DES
DEQ
DDU
DDP
V V V V V
V V V V V
V V V V V
V V V V V
V V V V V
N N
V V
V V
V V
V V
C C C C
C C C C
V C C C
V C V V
V V V V
G
M
M
G
G
LL
LL
LL
LL
LL
GASTOS EN ORIGEN GTOS INTERNACIONALES GASTOS EN DESTINO
1. Embalaje y verificación
2. Recogida en fábrica/almacén
3. Transporte interior
4. Despacho exportación
5. Gastos de terminal
6. Transporte internacional
7. Seguro de transporte
8. Gastos de terminal
9. Despacho importación
10.Transporte interior
11.Entrega en fábrica/almacén
V: Vendedor/Exportador C: Comprador/Importador N: Negociable
M/T: Modalidad de Transporte (G: General, M: Marítimo)
T/V: Tipo de venta (S: a la salida, LL: a la llegada)

22. Channel Design Decisions
1. Analyzing customers desired service
output levels
2. Establishing objectives and
constraints
3. Identifying major channel
alternatives
4. Evaluating the major alternatives
5. Deciding your channel alternatives
(selective vs intensive distribution)

23. Channel Advantage is
gained when you are
able to switch
customers to lower-cost
channels, with no loss
of sales or deterioration
in service quality.

24. Channel Management Decisions
• Selecting Channel Members
• Selecting Channel Levels
(Accreditation)
• Training Channel Members
• Motivating Channel Members
• Evaluating Channel Members

25. What kind of distribution?
• Exclusive (Rolls Royce,
Rolex, Chanel)
• Selective (General
Electric)
• Intensive (Colgate,
Palmolive)

26. Terms and Responsibilities
• Rights and responsibilities
are drawn up
• Territorial rights are fixed
• Pricing policies and
conditions of sales are
fixed

27. Channel modification
• With time channels need to
change along with product as it
get older in the PLC
• Introduction – boutiques,
company showrooms
• Growth – chain stores,
departmental stores
• Maturity – Mass merchandisers
• Decline – ‘sales stores’, discount
stores

28. Adding channels
Advantages
• Increased market coverage
• Lower channel costs
• More customised selling
Disadvantages
• Increases selling costs
• Increases channel control
• Breeds channel conflict

29. The Canon Example
• Large and Public
Companies: Direct Sales
Force
• SMEs: Specialized dealers
in office equipment
• Consumer, small
companies and SCFW:
Retailers

30. Recommendations
• Be sure that you are offering
the right level of service with
the right channel.
• Be sure to define what is the
target group for each
channel.
• Be sure to consider what the
channel is good at

31. Handling the Channel
conflict

32. Channel conflict
• Interest of different business
interests do not necessarily
coincide
• Conflicts can occur at various
levels:
vertical
horizontal
multichannel

33. Conflict causes
• Goal
incompatibility
• Differences in
perception
• Great dependence

34. Legal and ethical issues
• Exclusive dealings
• Exclusive
territories
• Tying agreements
• Dealer rights

35. Total
Industry
Profit
+
-
$ 0
Market
Introduction
Market
Growth
Market
Maturity
Sales
Decline
Time
Total
Industry
Sales
Placement
Build
Channels
Maybe
selective
distribution
More of the
same, but
more
channel
outlets
available
Move toward
more
intensive
distribution
Find a way to
reach loyal
laggards
The Product Life Cycle

36. Retailing includes all
activities involved in
selling goods or
services directly to
final consumers.

37. Types of Retailers
• Self – service – discount stores (no
assistance)
• Self – selection – dept. store
(assistance is available if required)
• Limited service – counter sales men
are there
• Full service – Co. showrooms.
Salesmen are available to explain,
demonstrate, give technical help and
promote the products

38. The target market will define
• Assortment of goods to be
stocked
• Store atmospherics and
services
• Pricing decision
• Promotion decision
• Place decision

39. Retail sales effectiveness
• No. of people passing by
on an average day
• % who enter the store
(footfalls)
• % entering who buy
• Amount spent per buyer

40. Store Brands
• With the increase in size and
buying strength of retailers,
companies are forced to now
customize products for them.
• These are known as store
brands. They may compete at
the store with the company’s
own brands.

41. What is wholesaling?
• It includes all activities
involved in selling goods
and services for resale or
business use. They are the
intermediaries between
manufacturers and
retailers.

42. Characteristics of wholesalers
• Less attention to promotion,
atmosphere and location
• Transactions are usually large
and cover a wider geographical
area
• Could have different tax
implications, regulations,etc.
because of its status as a
wholesaler

43. Functions of a wholesaler
• Financing
• Risk bearing
• Market
information
• Management
services and
counselling
• Selling and
promoting
• Buying and
assortment
building
• Bulk breaking
• Warehousing
• Transportation

44. Market Logistics
• Involves the planning,
implementing and controlling the
physical flows of materials and
final goods from point of origin to
points of use to meet customer
requirements at a profit.
• It involves materials management,
distribution systems and IT
systems interlinked with one
another.

45. Logistics objective
• Getting the right goods at
the right place at the
right time for the least
cost
• ‘the last frontier for cost
economies’.

46. Market Logistics decisions
• Order processing
• Warehousing
• Inventory
• Transportation

47. Inventory vs Service levels
inventory
cost
Servicelevel
100%
Reorder point should balance
the risks of stockouts against
costs of overstocking
Company needs to balance ordering costs vs
inventory carrying costs

48. Logistics vs. Sales
• Objectives can be
conflicting
• Conflict resolution can
be done by trading off
costs vis -a- vis
customer satisfaction

49. Gracias, gracias,
gracias
fontanini@learning.eoi.es