Session 27 MG 220 MBA - 15 Nov 10


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Session 27
MG 220 Marketing Management
MBA 10

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Session 27 MG 220 MBA - 15 Nov 10

  1. 1. MG 220 Marketing Management MBA 10 Fall 2010 Muhammad Talha Salam, Asst. Professor Access it online: 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. 2. Access it online: 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. 3. Access it online: 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. 4. Access it online: 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. BRICK-AND-CLICK COMPANIES • Companies which existed otherwise and added online stores later. E.g. Walmart MG 220 Marketing Management 4
  5. 5. Access it online: 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. 6. Access it online: 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. 7. Access it online: 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. 8. Access it online: 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. 9. Access it online: 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. 10. MG 220 Marketing Management MBA 10 Fall 2010 Muhammad Talha Salam, Asst. Professor Access it online: 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