This document discusses marketing channels and distribution strategies. It begins by defining marketing channels as the set of organizations involved in making a product available for use. It then covers topics such as the different types of distribution channels, channel intermediaries, and channel management decisions. The document provides information on push and pull strategies, channel integration, managing channel members, and addressing channel conflict. It aims to explain the key considerations and decisions involved in effective marketing channel design and management.
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.
MANAGEMENT QUESTIONS THAT WOULD BE HELPFUL FOR UR EXAM PREPARATION................................................................................................................................................................................................................................................
A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, from the point of production to the point of consumption.
MANAGEMENT QUESTIONS THAT WOULD BE HELPFUL FOR UR EXAM PREPARATION................................................................................................................................................................................................................................................
A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, from the point of production to the point of consumption.
This is useful for educators and learners of MBA, which is made in lucid style for easier understanding and to be a handy tool before exams or while teaching.
The digital marketing industry is changing faster than ever and those who don’t adapt with the times are losing market share. Where should marketers be focusing their efforts? What strategies are the experts seeing get the best results? Get up-to-speed with the latest industry insights, trends and predictions for the future in this panel discussion with some leading digital marketing experts.
Is AI-Generated Content the Future of Content Creation?Cut-the-SaaS
Discover the transformative power of AI in content creation with our presentation, "Is AI-Generated Content the Future of Content Creation?" by Puran Parsani, CEO & Editor of Cut-The-SaaS. Learn how AI-generated content is revolutionizing marketing, publishing, education, healthcare, and finance by offering unprecedented efficiency, creativity, and scalability.
Understanding
AI-Generated Content:
AI-generated content includes text, images, videos, and audio produced by AI without direct human involvement. This technology leverages large datasets to create contextually relevant and coherent material, streamlining content production.
Key Benefits:
Content Creation: Rapidly generate high-quality content for blogs, articles, and social media.
Brainstorming: AI simulates conversations to inspire creative ideas.
Research Assistance: Efficiently summarize and research information.
Market Insights:
The content marketing industry is projected to grow to $17.6 billion by 2032, with AI-generated content expected to dominate over 55% of the market.
Case Study: CNET’s AI Content Controversy:
CNET’s use of AI for news articles led to public scrutiny due to factual inaccuracies, highlighting the need for transparency and human oversight.
Benefits Across Industries:
Marketing: Personalize content at scale and optimize engagement with predictive analytics.
Publishing: Automate content creation for faster publication cycles.
Education: Efficiently generate educational materials.
Healthcare: Create accurate content for patients and professionals.
Finance: Produce timely financial content for decision-making.
Challenges and Ethical Considerations:
Transparency: Disclose AI use to maintain trust.
Bias: Address potential AI biases with diverse datasets.
SEO: Ensure AI content meets SEO standards.
Quality: Maintain high standards to prevent misinformation.
Conclusion:
AI-generated content offers significant benefits in efficiency, personalization, and scalability. However, ethical considerations and quality assurance are crucial for responsible use. Explore the future of content creation with us and see how AI is transforming various industries.
Connect with Us:
Follow Cut-The-SaaS on LinkedIn, Instagram, YouTube, Twitter, and Medium. Visit cut-the-saas.com for more insights and resources.
AI-Powered Personalization: Principles, Use Cases, and Its Impact on CROVWO
In today’s era of AI, personalization is more than just a trend—it’s a fundamental strategy that unlocks numerous opportunities.
When done effectively, personalization builds trust, loyalty, and satisfaction among your users—key factors for business success. However, relying solely on AI capabilities isn’t enough. You need to anchor your approach in solid principles, understand your users’ context, and master the art of persuasion.
Join us as Sarjak Patel and Naitry Saggu from 3rd Eye Consulting unveil a transformative framework. This approach seamlessly integrates your unique context, consumer insights, and conversion goals, paving the way for unparalleled success in personalization.
5 big bets to drive growth in 2024 without one additional marketing dollar AND how to adapt to the biggest shifting eCommerce trend- AI.
1) Romance Your Customers - Retention
2) ‘Alternative’ Lead Gen - Advocacy
3) The Beautiful Basics - Conversion Rate Optimization
4) Land that Bottom Line - Profitability
5) Roll the Dice - New Business Models
When most people in the industry talk about online or digital reputation management, what they're really saying is Google search and PPC. And it's usually reactive, left dealing with the aftermath of negative information published somewhere online. That's outdated. It leaves executives, organizations and other high-profile individuals at a high risk of a digital reputation attack that spans channels and tactics. But the tools needed to safeguard against an attack are more cybersecurity-oriented than most marketing and communications professionals can manage. Business leaders Leaders grasp the importance; 83% of executives place reputation in their top five areas of risk, yet only 23% are confident in their ability to address it. To succeed in 2024 and beyond, you need to turn online reputation on its axis and think like an attacker.
Key Takeaways:
- New framework for examining and safeguarding an online reputation
- Tools and techniques to keep you a step ahead
- Practical examples that demonstrate when to act, how to act and how to recover
The session includes a brief history of the evolution of search before diving into the roles technology, content, and links play in developing a powerful SEO strategy in a world of Generative AI and social search. Discover how to optimize for TikTok searches, Google's Gemini, and Search Generative Experience while developing a powerful arsenal of tools and templates to help maximize the effectiveness of your SEO initiatives.
Key Takeaways:
Understand how search engines work
Be able to find out where your users search
Know what is required for each discipline of SEO
Feel confident creating an SEO Plan
Confidently measure SEO performance
Most small businesses struggle to see marketing results. In this session, we will eliminate any confusion about what to do next, solving your marketing problems so your business can thrive. You’ll learn how to create a foundational marketing OS (operating system) based on neuroscience and backed by real-world results. You’ll be taught how to develop deep customer connections, and how to have your CRM dynamically segment and sell at any stage in the customer’s journey. By the end of the session, you’ll remove confusion and chaos and replace it with clarity and confidence for long-term marketing success.
Key Takeaways:
• Uncover the power of a foundational marketing system that dynamically communicates with prospects and customers on autopilot.
• Harness neuroscience and Tribal Alignment to transform your communication strategies, turning potential clients into fans and those fans into loyal customers.
• Discover the art of automated segmentation, pinpointing your most lucrative customers and identifying the optimal moments for successful conversions.
• Streamline your business with a content production plan that eliminates guesswork, wasted time, and money.
Short video marketing has sweeped the nation and is the fastest way to build an online brand on social media in 2024. In this session you will learn:- What is short video marketing- Which platforms work best for your business- Content strategies that are on brand for your business- How to sell organically without paying for ads.
When most people in the industry talk about online or digital reputation management, what they're really saying is Google search and PPC. And it's usually reactive, left dealing with the aftermath of negative information published somewhere online. That's outdated. It leaves executives, organizations and other high-profile individuals at a high risk of a digital reputation attack that spans channels and tactics. But the tools needed to safeguard against an attack are more cybersecurity-oriented than most marketing and communications professionals can manage. Business leaders Leaders grasp the importance; 83% of executives place reputation in their top five areas of risk, yet only 23% are confident in their ability to address it. To succeed in 2024 and beyond, you need to turn online reputation on its axis and think like an attacker.\
Key Takeaways:
- New framework for examining and safeguarding an online reputation
- Tools and techniques to keep you a step ahead
- Practical examples that demonstrate when to act, how to act and how to recover
10 Video Ideas Any Business Can Make RIGHT NOW!
You'll never draw a blank again on what kind of video to make for your business. Go beyond the basic categories and truly reimagine a brand new advanced way to brainstorm video content creation. During this masterclass you'll be challenged to think creatively and outside of the box and view your videos through lenses you may have never thought of previously. It's guaranteed that you'll leave with more than 10 video ideas, but I like to under-promise and over-deliver. Don't miss this session.
Key Takeaways:
How to use the Video Matrix
How to use additional "Lenses"
Where to source original video ideas
Come learn how YOU can Animate and Illuminate the World with Generative AI's Explosive Power. Come sit in the driver's seat and learn to harness this great technology.
Financial curveballs sent many American families reeling in 2023. Household budgets were squeezed by rising interest rates, surging prices on everyday goods, and a stagnating housing market. Consumers were feeling strapped. That sentiment, however, appears to be waning. The question is, to what extent?
To take the pulse of consumers’ feelings about their financial well-being ahead of a highly anticipated election, ThinkNow conducted a nationally representative quantitative survey. The survey highlights consumers’ hopes and anxieties as we move into 2024. Let's unpack the key findings to gain insights about where we stand.
How to Use AI to Write a High-Quality Article that Ranksminatamang0021
In the world of content creation, many AI bloggers have drifted away from their original vision, resulting in low-quality articles that search engines overlook. Don't let that happen to you! Join us to discover how to leverage AI tools effectively to craft high-quality content that not only captures your audience's attention but also ranks well on search engines.
Disclaimer: Some of the prompts mentioned here are the examples of Matt Diggity. Please use it as reference and make your own custom prompts.
The What, Why & How of 3D and AR in Digital CommercePushON Ltd
Vladimir Mulhem has over 20 years of experience in commercialising cutting edge creative technology across construction, marketing and retail.
Previously the founder and Tech and Innovation Director of Creative Content Works working with the likes of Next, John Lewis and JD Sport, he now helps retailers, brands and agencies solve challenges of applying the emerging technologies 3D, AR, VR and Gen AI to real-world problems.
In this webinar, Vladimir will be covering the following topics:
Applications of 3D and AR in Digital Commerce,
Benefits of 3D and AR,
Tools to create, manage and publish 3D and AR in Digital Commerce.
Mastering Local SEO for Service Businesses in the AI Era is tailored specifically for local service providers like plumbers, dentists, and others seeking to dominate their local search landscape. This session delves into leveraging AI advancements to enhance your online visibility and search rankings through the Content Factory model, designed for creating high-impact, SEO-driven content. Discover the Dollar-a-Day advertising strategy, a cost-effective approach to boost your local SEO efforts and attract more customers with minimal investment. Gain practical insights on optimizing your online presence to meet the specific needs of local service seekers, ensuring your business not only appears but stands out in local searches. This concise, action-oriented workshop is your roadmap to navigating the complexities of digital marketing in the AI age, driving more leads, conversions, and ultimately, success for your local service business.
Key Takeaways:
Embrace AI for Local SEO: Learn to harness the power of AI technologies to optimize your website and content for local search. Understand the pivotal role AI plays in analyzing search trends and consumer behavior, enabling you to tailor your SEO strategies to meet the specific demands of your target local audience. Leverage the Content Factory Model: Discover the step-by-step process of creating SEO-optimized content at scale. This approach ensures a steady stream of high-quality content that engages local customers and boosts your search rankings. Get an action guide on implementing this model, complete with templates and scheduling strategies to maintain a consistent online presence. Maximize ROI with Dollar-a-Day Advertising: Dive into the cost-effective Dollar-a-Day advertising strategy that amplifies your visibility in local searches without breaking the bank. Learn how to strategically allocate your budget across platforms to target potential local customers effectively. The session includes an action guide on setting up, monitoring, and optimizing your ad campaigns to ensure maximum impact with minimal investment.
First Things First: Building and Effective Marketing Strategy
Too many companies (and marketers) jump straight into activation planning without formalizing a marketing strategy. It may seem tedious, but analyzing the mindset of your targeted audiences and identifying the messaging points most likely to resonate with them is time well spent. That process is also a great opportunity for marketers to collaborate with sales leaders and account managers on a galvanized go-to-market approach. I’ll walk you through the methods and tools we use with our clients to ensure campaign success.
Key Takeaways:
-Recognize the critical role of strategy in marketing
-Learn our approach for building an actionable, effective marketing strategy
-Receive templates and guides for developing a marketing strategy
Mastering Multi-Touchpoint Content Strategy: Navigate Fragmented User JourneysSearch Engine Journal
Digital platforms are constantly multiplying, and with that, user engagement is becoming more intricate and fragmented.
So how do you effectively navigate distributing and tailoring your content across these various touchpoints?
Watch this webinar as we dive into the evolving landscape of content strategy tailored for today's fragmented user journeys. Understanding how to deliver your content to your users is more crucial than ever, and we’ll provide actionable tips for navigating these intricate challenges.
You’ll learn:
- How today’s users engage with content across various channels and devices.
- The latest methodologies for identifying and addressing content gaps to keep your content strategy proactive and relevant.
- What digital shelf space is and how your content strategy needs to pivot.
With Wayne Cichanski, we’ll explore innovative strategies to map out and meet the diverse needs of your audience, ensuring every piece of content resonates and connects, regardless of where or how it is consumed.
2. Syllabus
3.1 Distribution Channels and Physical Distribution Decisions:
Nature, Functions, and types of distribution channels;
Distribution channel intermediaries;
Channel management decisions;
Retailing and Wholesaling
4. 7Ps & 7Cs
The 7 Ps The 7 Cs
Organisation Facing Customer Facing
Product = Customer/ Consumer
Price = Cost
Place = Convenience
Promotion = Communication
People = Caring
Processes = Co-ordinated
Physical Evidence = Confirmation
5. 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 ….?
5
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6. 6
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.
1/3/2013
7. 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
intermediaries
Application: 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.
7
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8. 8
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
10. 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
10
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14. 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
15. 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
15
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16. 16
Designing a Marketing Channel System-Decisions
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
1/3/2013
17. 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
17
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18. 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
18
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21. 21
Exclusive Distribution
Exclusive: 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 2000
Advantages: 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 brands
Disadvantages: Betting on one dealer in each market
• Only suitable for high price, high margin, and low volume products
22. 22
Intensive Distribution
Intensive: Distribute from as many outlets as possible to provide location
convenience
Ex: Newspapers, Most fast moving consumer goods you see in the
newsstand
• Photo processing shops
Advantages: Increased sales, wider customer recognition, and impulse
buying
Disadvantages: Characteristically low price and low-margin products
that require a fast turnover
• Difficult to control large number of retailers
23. 23
Selective Distribution
Selective: Appoint several but not all are retailers
Daewoo 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 service
Disadvantages: May not cover the market adequately
• Difficult to select dealers (retailers) that can match your requirement and goals
24. 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)
24
1/3/2013
29. Channel Integration and Systems
Fairly good
to good
Contracts
McDonald’s
Complete
One
company
ownership
Florsheim
Some to
good
Economic
power and
leadership
General
Electric
Characteristics
Type of channels
Little or
none
None
Typical “inde-
pendents”
Amount of cooperation
Traditional
1. Vertical marketing systems (VMS)
Administered Contractual Corporate
Control maintained by
Examples
29
1/3/2013
2. Horizontal (symbiotic) marketing systems: Two or more unrelated companies putting
together resources to exploit a marketing opportunity . Yugoka in Japan
3. Multichannel systems
31. 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
31
1/3/2013
32. 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
32
1/3/2013
33. 33
Managing Channel Conflict-Strategies
• 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
34. e-Commerce Marketing Practices
• Pure-click (only Web)
• Brick-and-click (Firm + Web)
• Brick-and-mortar (only firm)
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
34
35. E-Commerce: On-line Distribution
1/3/2013 35
The success depends on the characteristics of the consumers in
the market in terms of their disposition to e-commerce and
surfing habits
Eg. South Korea has the most dynamic Internet surfers in Asia.
They spend the least time—28 seconds—on a web page before
moving on
Australian surfers were the “stickiest”, clocking one minute per
page
(Source: March 2001 figures from Nielsen/NetRatings Globel Index)
36. The FUTURE:M-Commerce
Cell phones , PDAs, Smart phones
UMTS
Mobile commerce is going to be the next revenue stream once the killer
mobile-application is rolled out
The penetration of mobile data services is low in ASPAC (1%) compared to
the Western Europe (23%), Japan (21%) and the US (7%)
(Source: ARC Group, 2000)
Japan’s NTT DoCoMo's 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 36
38. 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?
39. 39
What is Retailing?
Retailing includes all the activities involved in
selling goods or services directly to final
consumers for personal, non-business use.
40. Types Of Retailers
Specialty Stores
Department Stores
Supermarkets
Convenience Stores
Off-Price Retailer
Superstores
Catalog Showroom
Wide Variety of Product Lines i.e. Clothing,
Home Furnishings, & Household Items
Wide Variety of Food, Laundry, & Household
Products
Limited Line of High-Turnover Convenience
Goods
Inexpensive, Overruns, Irregulars, and
Leftover Goods
Large Assortment of Routinely Purchased
Food & Nonfood Products, Plus Services
Broad Selection, Fast Turnover, Discount
Prices
Narrow Product Line, Deep Assortment
Store Type Length and Breadth of Product
Assortment
Discount Stores
Broad Product Line, Low Margin, High
Volume
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. Convenience
Product Selection
Fairness in Dealings
Helpful Information
Prices
Social Image
Convenience
Product Selection
Fairness in Dealings
Helpful Information
Prices
Social Image
Planning a Retailer’s Strategy
Key Features
Affecting
Consumers’
Retail Choice
Shopping Atmosphere
44. Low Price
Low Status
Low Margin
Mid Price
Mid Status
Mid Margin
High Price
High Status
High Margin
Wheel of Retailing
44
1/3/2013
46. 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
47. Conventional Retailers – Try to Avoid Price Competition
Conventional
Offerings
Single- &
limited-
line stores
Expanded
assortment
&/or reduced
margins &
service
Supermarkets,
disc. houses,
mass merch.,
super-, club-
Stores, +
Safeway, IKEA,
Home Depot,
Costco
Added conv.,
higher margins,
reduced
assortment
C-stores,
vending, door-
to-door, phone,
mail, some
e-tail
7-11, Pepsi
vending,
Avon, Lands’
End, QVC
Expanded
assortment,
reduced
margins, more
information
Internet
eBay, Amazon,
Zappos,
Netflix, Dell
Expanded
assortment
& service
Specialty
shops &
dept. stores
Ritz Camera,
Coach, Gap,
Macy’s
48. 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
Retailer Size and Profits
49. 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
Retailing and the Internet
50. 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
Mass-Merchandising Concept
51. 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
Examples of Scrambled Merchandising
54. What is a Franchising System?
A franchising system is a system of individual franchisees, a tightly
knit group of enterprises whose systematic operations are planned,
directed, and controlled by the operation’s franchisor.
55. 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.
Franchise Operations
56. 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
59. 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
60. 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
61. 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)
Some Trends in Retailing
62. 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)
63. 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)
65. 65
Retail Category Management
Define the category
Figure out its role
Set goals
Choose the audience
Implement the plan
Figure out tactics
Assess performance
66. 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
67. 16-67
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
68. 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
69. 69
Location decision-Indicators of Sales Effectiveness
Number of people passing by
% who enter store
% of those who buy
Average amount
spent per sale
70. 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
72. Marketing Debate
Does it matter where your products/
services are Sold?
(Channel Image Vs. Brand Image)
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73. 18-73
Wal-Mart has for the first time moved into the
number one position on Fortune magazine’s
“Fortune 500” list, passing up such companies
as GM and Exxon. How has their target market
identification helped put them into this
position? What can
Wal-Mart’s chief rivals,
K-Mart and Target, do
to try to close the gap?
74. Marketing Discussion
Think 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?
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75. Why are Wholesalers Used?
Wholesaler
Functions
Management
Services & Advice
Selling and
Promoting
Market
Information
Buying and
Assortment Building
Risk Bearing Bulk Breaking
Transporting
Financing Warehousing
75
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76. Wholesaling Functions
• Selling and promoting—sales
force help manufacturers reach
many small business customers
at a relatively low cost
• Buying and assortment
building—select items and
build the assortment their
customers need
• Bulk breaking—buy large
carload lots and breaking the
bulk into smaller units
• Warehousing—hold
inventories, and reduce
inventory costs and risks to
suppliers and customers
• Transportation—provide quicker
delivery to buyers because they are
closer to the buyers
• Financing—grant credit, and finance
suppliers by ordering early and
paying bills on time
• Risk bearing—absorb some risk by
taking title and bearing cost of theft,
damage, spoilage, and obsolescence
• Market information—supply
competitor activities, new products,
price developments, etc
• Management services and
counseling—training sales clerks,
helping with store layouts and
displays, etc.
78. 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
Manufacturer’s Sales Branches
82. 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
Merchant Wholesalers
83. Provide all of the wholesaling functions
Three major types:
• General merchandise wholesalers
• Single-line (or general-line) wholesalers
• Specialty wholesalers
Full-Service Merchant Wholesalers
84. 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
Some Limited-Function Merchant Wholesalers
86. 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
Manufacturers’Agents
87. 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
Brokers
88. 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
Agent Middlemen
89. Fewer, but larger, wholesalers
Use of computers to control inventory, order
processing
Closer relationships with customers
More selective in picking customers
Trends in Wholesaling
90. 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
91. What are Integrated Logistics Systems?
An integrated logistics system (ILS) includes
materials management, material flow systems,
and physical distribution, aided by information
technology.
92. 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
93. Inventory
When to order
How much to order
Just-in-time
Costs
Minimize Costs of
Attaining Logistics
Objectives
Warehousing
Storage
Distribution
Order Processing
Submitted
Processed
Shipped
Logistics
Functions
Transportation
Water, Truck,
Rail,
Pipeline & Air
Logistics Systems
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94. 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
94
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95. 95
Market Logistics Decisions
• How should orders be
handled?
• Where should stock be
located?
• How much stock should
be held?
• How should goods be
shipped?
98. Rail Piggyback
Nation’s largest carrier, cost-effective
for shipping bulk products
Truck Fishyback
Flexible 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
Transportation Modes
98
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100. 100
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
102. Marketing Discussion
Think 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?
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103. Reference
• Kotler, Kelly, Koshy and Jha (2009) Marketing Management: A South
Asian Perspective, 14th ed. Pearson Prentice Hall, pp.400-53