This document contains slides from a marketing management class covering topics related to delivering value to customers. It discusses channel integration systems, including vertical and horizontal marketing systems. It also covers e-commerce marketing practices and key definitions. Finally, it discusses retailing, including the definition of retailing, types of retailers, marketing decisions for retailers, and trends in retailing such as the growth of private labels.
Theories of retailing, theories of retail development,
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An assignment on "Non Store Retail Format"
Includes definition, Types, Advantages and disadvantages of each, future expectation of Non Store Retail Format.
Theories of retailing, theories of retail development,
Retail Life Cycle, Environmental Theory, Cyclical Theory - Wheel of retailing, phases of retail development, Accordion theory
An assignment on "Non Store Retail Format"
Includes definition, Types, Advantages and disadvantages of each, future expectation of Non Store Retail Format.
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Session 27 MG 220 MBA - 15 Nov 10
1. MG 220 Marketing Management
MBA 10
Fall 2010
Muhammad Talha Salam, Asst. Professor
talha.salam@nu.edu.pk
Access it online: www.slideshare.net/talhasalam
Part 6:
Delivering Value
> Channel integration and systems: SKIM
> E-Commerce Marketing Practices: SKIM
> Retailing
> Private Labels
Class Presentation | Session 27 | 15 Nov 2010
2. Access it online: www.slideshare.net/talhasalam
Channel Integration and Systems
Vertical Marketing Systems (VMS)
VMS
• Conventional Marketing System: Independent producer, wholesaler, retailer
WHILE
• Vertical Marekting System: Producer, wholesaler, retailer acting as a unified system
• This concept is widely used in different forms: Corporate, Administered, Contractual
• VMS is all based on power of any one of the member of Marketing System (not
necessarily producer, but also retailer or wholesaler)
• Corporate VMS: combines successive stages of production, distribution and retailing
under single ownership. Companies buy from companies they own.
• Administered VMS: coordinates successive stages of production and distribution through
the size and power of one of members
• Contractual VMS: consists of independent firms at different level of production and
distribution integrating their programs on a contractual basis to obtain more economies
or sales impact than they could achieve alone
MG 220 Marketing Management 2
3. Access it online: www.slideshare.net/talhasalam
Channel Integration and Systems
Horizontal and Multichannel Marketing Systems
Horizontal Marketing Systems
• Two or more unrelated companies put together resources or programs to exploit an
emerging marketing opportunity
Multichannel Marketing Systems
• Occurs when a single firm uses two or more marketing channels to reach one or more
customer segments.
MG 220 Marketing Management 3
4. Access it online: www.slideshare.net/talhasalam
E-Commerce Marketing Practices
Key definitions
Internet has impacted channel strategies a lot and these are some relatively new trends
which are now strongly established.
E-business
• Use of electronic means and platforms to conduct a company’s business
E-Commerce
• Company (or its website) offers to transact or facilitate selling of products and services
online.
E-Purchasing
• Companies decide to purchase from online suppliers
E-Marketing
• Describes company efforts to communicate and promote their products online
PURE CLICK COMPANIES
• Companies which started and are operating only on internet i.e. as online or e-business
e.g. Amazon.com
BRICK-AND-CLICK COMPANIES
• Companies which existed otherwise and added online stores later. E.g. Walmart
MG 220 Marketing Management 4
5. Access it online: www.slideshare.net/talhasalam
Retailing
Definition | Types of Retailers | New Models for success
What is Retailing?
• All activities involved in selling goods or services directly to end consumer for personal, non-
business use. EXAMPLES?
Types of Retailers
• Based on Levels of Service:
– Self-service
– Self-selection
– Limited service
– Full service
• Matrix showing positioning strategies for retailers:
• Non-store retailing
– Direct Selling
– Direct Marketing
– Automatic Vending
– Buying Service
New Models for success
– Strong retail brand approach
– The showcase store
MG 220 Marketing Management 5
6. Access it online: www.slideshare.net/talhasalam
Retailing
Marketing Decisions
Key decisions to be taken by retailers
• Target Market
• Product Assortment
• Procurement
– Policies and procedures for procurement based on assortment
• Services:
– Deciding on services mix in terms or pre-purchase, post-purchase and ancillary
• Store Activities & Atmosphere
• Price
– Pricing strategies for retailers
• Communication
– All decisions related to communication i.e. promotion to generate traffic
• Location:
– Three keys to success in retailing are: Location, Location and Location!
MG 220 Marketing Management 6
7. Access it online: www.slideshare.net/talhasalam
Retailing
Trends in Retailing
Upcoming and relatively new trends in retailing
• New Retail forms and combinations
– Supermarkets having bank branches, bookshops having coffee shops
• Growth of intertype competition
– Different type of stores are competing for same consumer. E.g. Electronics retailer competing
with Hyperstar
• Competition between store and non-store retailing
– Non-store based retailing is taking business away from store-based retailing
• Growth of Giant retailers
– Through better information systems, logistical superiority, giant retailers offer better prices
• Decline of Middle Market Retailers
– Hour-glass approach i.e. growth is either at top or at bottom. Middle level retailers are shrinking
• Growing investment in technology
– For better conducting of business use of technology is increasing
• Global Presence of major retailers
– Many retailers from Europe and North America are now presence in almost all continents and are
constantly expanding globally
MG 220 Marketing Management 7
8. Access it online: www.slideshare.net/talhasalam
Private Labels
What is a Private Label?
• A brand developed by the retailers and wholesalers themselves
• This a challenge for manufacturers that retailers can offer private labels in
competition
• But there is a limit to how much private label can be used
• They might not be attractive as national brand and/or they might not be feasible
to produce ‘privately’
House Brands
• Why go for Private Labels
• First: They are more profitable. Intermediaries find low-cost producers and get
it developed and earn better margins themselves
• Second: It can be a differentiating factor for retailers
MG 220 Marketing Management 8
9. Access it online: www.slideshare.net/talhasalam
Private Labels
The Private Label Threat
• Generally retailers have advantage here.
• They can even charge extra fee from manufacturers for their shelf space
• Consumers’ being more price sensitive is also hurting national brands
• Manufacturers react to this threat by focusing more on consumer-driven
promotion to maintain strong brand preference
MG 220 Marketing Management 9
10. MG 220 Marketing Management
MBA 10
Fall 2010
Muhammad Talha Salam, Asst. Professor
talha.salam@nu.edu.pk
Access it online: www.slideshare.net/talhasalam
Part 6:
Delivering Value
> Covering balance from prev session
> Two topics from Part 6 to be covered:
> Wholesaling
> Market Logistics: SKIM
> Overall review of Part 7
Class Presentation | Session 28 | 22 Nov 2010